scholarly journals Financial Regulations, Profit Efficiency, and Financial Soundness: Empirical Evidence from Commercial Banks of Pakistan

2017 ◽  
Vol 56 (2) ◽  
pp. 85-103
Author(s):  
Shumaila Zeb ◽  
Abdul Sattar .
Keyword(s):  
Data Envelopment Analysis ◽  
Commercial Banks ◽  
Financial Stability ◽  
Jel Classification ◽  
Data Envelopment ◽  
Z Score ◽  
Profit Efficiency ◽  
Differential Effects ◽  
Financial Regulations ◽  
Financial Soundness

The purpose of this paper is threefold. First, it measures profit efficiency and financial stability of commercial banks of Pakistan. Second, it empirically estimates the effect of the already implemented financial regulations on the profit efficiency and financial stability of banks. Third, it examines the differential effect of financial regulations on profitability and financial soundness across bank size. To carry out the empirical analysis, a balanced bank-level panel data covering the period 2008-2014 is used. To gauge the profit efficiency of commercial banks, Data Envelopment Analysis (DEA) is utilised, while, to proxy the financial soundness, the Z-score is calculated for each bank. The panel regression approach is used to examine the effects of financial regulations on the profit efficiency and financial soundness of banks. We find that the financial regulations enforced by State Bank of Pakistan (SBP) have significant impacts on the profit efficiency and financial stability of banks. The results indicate that the non-performance loans to assets ratio (NPLL) and the reserve ratio (RR) impact positively, whereas, the liquidity ratio (LIQR) and the loans to deposits ratio (LODEPOSIT), significantly and negatively affect the profit efficiency of banks. However, only LR and RR are positively and significant related to the financial stability. The results also suggest that the financial regulations have significant differential effects on the profit efficiency and financial soundness of banks across bank size. JEL Classification: C23, E44, G21, G28 Keywords: Profit Efficiency, Financial Soundness, Financial Regulations, Data Envelopment Analysis, Z-Score, Differential Effects

scholarly journals Financial Efficiency Evaluation of Indian Scheduled Commercial Banks

2019 ◽  
Vol 8 (1) ◽  
pp. 51-64
Author(s):  
Aparna Bhatia ◽  
Megha Mahendru
Keyword(s):  
Data Envelopment Analysis ◽  
Cost Efficiency ◽  
Commercial Banks ◽  
Data Envelopment ◽  
Efficiency Evaluation ◽  
Financial Efficiency ◽  
Profit Efficiency ◽  
Nonparametric Approach ◽  
Cost Inefficiency ◽  
High Level

The main objective of the article is to analyze and evaluate cost, revenue and profit efficiency scores of Indian scheduled commercial banks (SCBs) in India during 1991–1992 till 2012–2013 by the application of data envelopment analysis (DEA)—a nonparametric approach. The results show that Indian SCBs have profit, revenue and cost efficiency of less than 1 during both the reformatory as well as post-reformatory era depicting that banks are not able to maximize their revenues and minimize their costs simultaneously in order to enhance their net effect. During reformatory and post-reformatory era, SCBs are more efficient in generating revenues and profits rather than in using their resources efficiently reflecting a high level of cost inefficiency. Overall, the results depict that Indian SCBs exhibit higher efficiency scores in reformatory era than in post-reformatory era.

Penilaian Efisiensi Bank dengan Data Envelopment Analysis pada 10 Bank Berperingkat Besar di Indonesia

2015 ◽  
Vol 2 (02) ◽  
pp. 113-126
Author(s):  
J.M.V. Mulyadi
Keyword(s):  
Data Envelopment Analysis ◽  
Detailed Analysis ◽  
Jel Classification ◽  
Financial Ratios ◽  
Data Envelopment ◽  
Bank Efficiency ◽  
Efficiency Assessment ◽  
Production Approach

A B S T R A C T Bank efficiency are important in the assessment of the health of banks. Data Envelopment Analysis is a model of efficiency assessment bank that is widely used because it provides a more detailed analysis of the results compared to financial ratios. Analysis carried out by the production approach, intermediation, revenues and profits. This study assesses the 10 major banks in Indonesia. The results showed that of the 10 large banks are still found inefficiencies. DEA resulted in a recommendation that development can be done bank to achieve optimum efficiency. Based on the recommendation expected the bank to maximize the desired profit through efficiency. A B S T R A K Efisiensi bank merupakan hal penting dalam penilaian kesehatan bank. Data Envelopment Analysis adalah model penilaian efisiensi bank yang banyak digunakan karena memberikan hasil analisis yang lebih detil dibandingkan rasio keuangan. Analisi dilakukan dengan pendekatan produksi, intermediasi, pendapatan dan laba. Penelitian ini melakukan penilaian pada 10 bank besar di Indonesia. Hasil penelitian menujukkan bahwa dari 10 bank besar tersebut masih ditemukan inefisiensi. DEA menghasilkan rekomendasi pengembangan yang dapat dilakukan bank untuk mencapai efisiensi optimum. Berdasarkan rekomendasi tersebut diharapkan bank dapat memaksimumkan profit yang diinginkan melalui efisiensi. JEL Classification: G29, O33

The impact of credit risk on the financial stability of commercial banks in Vietnam

2021 ◽  
Vol 11 (2) ◽  
pp. 67-80
Author(s):  
Nguyen Quoc Anh ◽  
Duong Nguyen Thanh Phuong
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Financial Stability ◽  
Dynamic Panel Data ◽  
Z Score ◽  
Return On Equity ◽  
Score Analysis ◽  
Negative Effect ◽  
The Difference ◽  
The Impact

This study investigates the impact of credit risk on the financial stability of Vietnamese commercial banks. The paper uses the Z-score to proxy the financial stability of banks. We use the data of 27 Vietnamese commercial banks on BankScope, during 2010 - 2019. The paper applied a dynamic panel data approach; the selected method is the difference GMM (DGMM). The key question discussed is which factor impacts on Z-score. Analysis results show the negative effect of non-performing loans on the financial stability of banks. When commercial banks have higher non-performing loans, the lower the financial stability is. Additionally, bank-specific variables such as equity on asset ratio, the return on equity, the size of the bank and set of macroeconomic variables affect the bank’s financial stability. Based on the analysis results, we imply relevant policies for the State Bank of Vietnam and commercial banks.

scholarly journals Cost efficiency of the Czech and Slovak banking sectors: an application of the data envelopment analysis

2016 ◽  
Author(s):  
Iveta Palecková
Keyword(s):  
Data Envelopment Analysis ◽  
Cost Efficiency ◽  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Returns To Scale ◽  
Data Envelopment ◽  
Cost Efficient ◽  
The Cost ◽  
Variable Returns To Scale

The aim of the paper is to estimate the cost efficiency of the Czech and Slovak commercial banks within the period 2010-2014. For empirical analysis the Data Envelopment Analysis input-oriented model with variable returns to scale is applied on the data of the commercial banks. The intermediation approach is adopted to define the inputs and outputs. The Czech commercial banks are more cost efficient than Slovak commercial banks. The development of average cost efficiency is similar in the Czech and Slovak banking industry. The most efficient Czech banks are Ceská sporitelna and Sberbank in the Czech banking sector, the most efficient Slovak bank is Privatbanka with 100% efficiency.

scholarly journals Bad Debt and Cost Efficiency in Vietnamese Commercial Banks

2015 ◽  
Vol 22 (1) ◽  
pp. 125-140
Author(s):  
Vinh Nguyen Thi Hong
Keyword(s):  
Data Envelopment Analysis ◽  
Cost Efficiency ◽  
Commercial Banks ◽  
Direct Relationship ◽  
Data Envelopment ◽  
Dea Method ◽  
Two Stages ◽  
The Cost ◽  
The Relationship ◽  
Bad Debt

The paper aims at exploring the relationship between bad debt and cost efficiency in Vietnamese commercial banks in the years 2007 – 2013. The research includes two stages: (i) Measuring the cost efficiency of banks by non-parameter Data Envelopment Analysis (DEA) method suggested by Coelli (2005); and (ii) Applying the Tobit model to identify two-way effects of bad debt and bank cost efficiency. The results show that the cost efficiency in Vietnamese commercial banks is 52.6% and there exists a direct relationship between bad debt and cost efficiency.

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