scholarly journals Non-Performing Loan and Financial Stability of Banking Industry in Pakistan

2020 ◽  
Vol 9 (4) ◽  
pp. 347-356
Author(s):  
FAZLI RAHMAN KHAN ◽  
MUHAMMAD NISAR KHAN ◽  
SAIMA UROOGE
Keyword(s):  
Commercial Banks ◽  
Financial Stability ◽  
Secondary Data ◽  
Panel Data Models ◽  
Leverage Ratio ◽  
Common Effect ◽  
Effect Model ◽  
Banking Stability ◽  
The Common ◽  
The Stability

The objectives of this study to assess the state of financial stability of commercial banks in Pakistan and then estimate how good, bad and worst economic conditions would influence the stability. Our design of the study is a mix of techniques. Pakistan have not experienced financial crisis due to some shocks, therefore stress events and its effects not included in design. This study examines the effect of non-performing loans on financial stability empirically. Based on the above premise, this thesis investigates the association of financial stability with non-performing loans for all commercial banks of Pakistan for the period of 2014-2018. The study used the 27 commercial banks having 162 bank year observations. The study measured of financial stability (FS) through the financial leverage ratio and liquidity ratio using the common effect model. For the non-performing loans this study uses the non-performing loan ratio. Using secondary data that is panel in nature and applying panel data models for analysis, the study finds out that non-performing loans negatively associated with financial stability of commercial banks in Pakistan. Keywords: Loan, Finance, Banking, Stability, Pakistan.

scholarly journals PENGARUH HARGA PROPERTI RESIDENSIAL DAN KEBIJAKAN FINANCING TO VALUE TERHADAP STABILITAS PERBANKAN SYARIAH DI INDONESIA

2021 ◽  
Vol 7 (2) ◽  
Author(s):  
Ahmad Fatoni
Keyword(s):  
Commercial Banks ◽  
Time Series Data ◽  
Secondary Data ◽  
Series Data ◽  
Residential Property ◽  
Correction Model ◽  
Property Price ◽  
Banking Stability ◽  
The Stability

This study aims to analyze the effect of residential property prices and Financing to Value policies on the stability of Islamic Commercial Banks in Indonesia. This study uses secondary data, namely time series data from all Islamic Commercial Banks in Indonesia during the period March 2010 to December 2020. The model used in this study is the Error Correction Model (ECM). The results of the study found that the Residential Property Price Index of small and medium types in the long term has an influence on the stability of Islamic Commercial Banks. However, each of them supports a different hypothesis, namely the collateral value hypothesis and the deviation hypothesis. Meanwhile, it was found that in the long and short term the Financing to Value policy had an influence on the stability of Islamic Commercial Banks in Indonesia. Keywords: Islamic Banking Stability, Property Price, Financing to Value

scholarly journals Non-performing Loans and Banks’ Financial Stability in Kenya; Evidence from Commercial Banks

2020 ◽  
pp. 44-52
Author(s):  
Loice Koskei
Keyword(s):  
Significant Relationship ◽  
Commercial Banks ◽  
Financial Stability ◽  
Inflation Rate ◽  
Global Financial Crisis ◽  
Secondary Data ◽  
Multiple Regression Model ◽  
Vital Role ◽  
Banking Stability ◽  
Loan Growth

The size of non-performing loans plays a vital role in banking stability of any given economy. The paper investigates the resilience and stability of banks amidst the deteriorating quality of its assets since the last Global financial crisis. This study examined the effect of non-performing loans on banks financial stability in Kenya’s commercial banks using secondary data for the period January 2015 to December 2019. A multiple regression model was utilised in analysing the data. Non-performing loans as measured by non-performing ratio had a positive and statistically significant relationship with banks financial stability as measured by Z a-score. The results implied that non-performing loans in Kenya’s commercial banks affects the banks financial stability. Loans to deposit ratio results specified a positive and non-statistically insignificant relationship with banks financial stability. The results inferred that loan to deposit ratio do not affect the banks financial stability. Inflation rate results had a positive but statistically significant relationship with banks’ financial stability indicating that inflation rate affects banks’ financial stability. The results for loan growth had a negative but statistically significant relationship with banks financial stability. The study recommended implementation of measures that curb increase in non-performing loans as they threaten banking financial stability.

MODELING THE INFLUENCE OF THE STRUCTURE AND QUALITY OF ASSETS ON THE PROFITABILITY OF A COMMERCIAL BANK

2021 ◽  
pp. 10-18
Author(s):  
Alena S. Kudriavtseva ◽  
Olga G. Arkadeva
Keyword(s):  
Economic Analysis ◽  
Commercial Banks ◽  
Financial Stability ◽  
Banking System ◽  
Factors Affecting ◽  
Correlation And Regression Analysis ◽  
The Stability ◽  
Classical Economic ◽  
Sound Management

In modern conditions, the methods of classical economic analysis are not enough to solve the problem of bank stability. This requires the development of methods and tools to analyze the current situation in the bank and to develop sound management decisions aimed at ensuring the stability of the bank. The article notes that the analysis of the influence of the structure and quality of assets on the profitability of commercial banks is an important step for assessing the financial position and reliability of a bank, and a method is proposed for constructing a model of the dependence of bank’s profitability on the factors that determine it. The scientific sources were the works of Russian and foreign researchers in the field of modeling and characteristics of the banking system, financial stability of credit institutions, assessment of the creditworthiness of potential borrowers, system organization and information technology. The article uses the methods of economic analysis, differential calculus and mathematical statistics, as well as the achievements of the main scientific schools dealing with the problems of economic and mathematical modeling and economic analysis of banking. In order to determine the most significant economic factors affecting the profitability of commercial banks, generalization of the theoretical, methodological and applied aspects of studies devoted to the study of the influence of the structure and quality of assets on the profitability of commercial banks was carried out, and a correlation and regression analysis was made. The model presented in the article can be used to predict changes in the profitability of Russian commercial banks and to predict promising directions for growth in profit and profitability of the bank.

Risk Behavior, Country Governance, and Bank Stability in Pakistan

2021 ◽  
pp. 185-203
Author(s):  
Hafiz Waqas Kamran ◽  
Abdelnaser Omran
Keyword(s):  
Economic Growth ◽  
Credit Risk ◽  
Risk Behavior ◽  
Commercial Banks ◽  
Financial Stability ◽  
Operational Risk ◽  
Bank Stability ◽  
Regression Methods ◽  
The Stability ◽  
Control Of Corruption

Keeping risk behavior and country governance in observation, this study has investigated the trends in financial stability for a sample of 22 commercial banks in Pakistan while controlling the effect of economic growth. Over the period of 2007 to 2016, the authors have applied OLS, FE, and RE regression methods to investigate which risk and governance factors are influencing the stability measures of the banks. It is found that financial stability in overall banks is affected by credit risk, operational risk, country risk, and financial crisis risk while control of corruption is also affecting ZROA in an adverse way.

scholarly journals FINANCIAL STABILITY OF A BANK - FACTOR OF STABILITY OF BANKING SYSTEM

2018 ◽  
pp. 5-11
Author(s):  
Andrii Ramskyi ◽  
Inna Budnichenko
Keyword(s):  
Commercial Banks ◽  
Financial Stability ◽  
Banking System ◽  
Development Program ◽  
Financial Sustainability ◽  
Internal Factors ◽  
Financial Condition ◽  
Stage Of Development ◽  
Banking Institutions ◽  
The Stability

The article is devoted to the analysis of the financial stability of Ukrainian banks at the present stage of development and the identification of the main factors of influence that are associated with it. The main tendencies of development of the banking system of Ukraine are considered. The present state of the banking system of Ukraine is determined. Financial stability plays a significant role in planning the activities of commercial banks. In general, its indicators reflect the level of riskiness of the functioning of the entity of the banking system. Managing financial sustainability has a significant impact on the functioning of banks. That is why it is necessary to create special control departments in banking institutions. The research of financial stability of banks is based on financial sustainability indicators developed and used by the IMF and the World Bank as the basis for the "Integrated Financial Sector Development Program until 2020". The necessity of applying different methods for evaluating the financial stability of commercial banks has been established in order to identify a wider range of problems related to the efficiency of the functioning of the banking system. The description of  two main groups of factors, under the influence of which the financial stability of banks  undergoes changes, is presented. It was revealed that external factors have a more significant impact on the financial stability of a bank. In particular, the factors of mega environment have become more important when banks enter the international financial space. Internal factors lie mostly in the management plane, and it is just the inefficient management of the bank that leads to the disruption of its stable financial condition. Specific features of management of financial stability and methods of its evaluation are considered. The analysis of economic standards of the banking system of Ukraine is carried out. The measures are proposed to minimize the risks and maintain the stability of banking institutions at the required level for normal functioning in modern conditions. It has been proved that providing, supporting, analyzing and evaluating the financial stability of commercial banks is a driving force in the development of the banking system, and hence the entire Ukrainian economy.

scholarly journals Company Size Moderates the Effect of Real Earning Management and Accrual Earning Management on Value Relevance

ETIKONOMI ◽  
2019 ◽  
Vol 18 (1) ◽  
Author(s):  
Sistya Rachmawati
Keyword(s):  
Predictive Value ◽  
Value Relevance ◽  
Secondary Data ◽  
Fixed Effect Model ◽  
Earning Management ◽  
Company Size ◽  
Real Earning ◽  
Common Effect ◽  
Effect Model ◽  
Value Model

The purpose of the study was to determine the effect of real earning management and accrual earning management on the relevance of values proxied by predictive value, feedback value and timeliness. Furthermore, whether the influence of real earning management and accrual earning management on value relevance can be strengthened by the company size variable. This study uses secondary data from 2014 to 2016 with 61 companies so that there are 183 observations. Data is processed by multiple regression for predictive value model and feedback value model using fixed effect model while timeliness uses common effect model. Before the regression test, normality and classical tests were carried out which included multicollinearity test, heteroscedasticity test and autocorrelation test. The results showed that the effect of real earning management and accrual earning management on predictive value, feedback value was not significant, while the timeliness was only accrual earning mamagement that had significance. On the other hand, company size has been proven to strengthen the effect of real earning management and accrual earning management on predictive value, whereas in the feedback value and timeliness model only accrual earning management can be strengthened by the size of the company

scholarly journals A Study on China’s Deleveraging and Financial Stability Under the Background of Financial Globalization

2021 ◽  
Vol 13 (8) ◽  
pp. 8
Author(s):  
Zhimin Zhang ◽  
Xin Kai
Keyword(s):  
Financial Stability ◽  
Financial Globalization ◽  
Financial Policies ◽  
Leverage Ratio ◽  
Relevant Variables ◽  
The 2008 Financial Crisis ◽  
The Stability ◽  
The Impact ◽  
The Relationship ◽  
Positive Effect

This paper studies the impact of financial globalization and leverage ratio on China’s financial stability. After the 2008 financial crisis, maintaining the stability of the financial system is China’s core task. However, due to the increasing degree of China’s opening up policy, the risk of foreign shock is increasing. Meanwhile the domestic policy of deleverage is implemented, so the superposition of domestic and foreign situations aggravates the uncertainty of financial stability. Therefore, this paper selects the relevant variables to empirically study the real impact of financial globalization and leverage ratio on China’s financial stability through VAR model. The results show that the indicators of financial stability are most affected by their own inertia, and the deepening of financial globalization and the increasing of leverage ratio will have a positive effect on financial stability at the beginning, but in the later stage it fluctuates a lot. Based on the findings, the China government should put more emphasis on dealing with the relationship between leverage ratio, foreign risks and financial stability when making domestic financial policies.

scholarly journals ANALISIS FAKTOR YANG MEMPENGARUHI RETURN SAHAM PADA BANK UMUM YANG TERDAFTAR DI BURSA EFEK INDONESIA

2021 ◽  
Vol 5 (1) ◽  
pp. 42-55
Author(s):  
Mulia Andirfa ◽  
Eka Chyntia ◽  
Iva Septarina ◽  
Maryana
Keyword(s):  
Stock Returns ◽  
Commercial Banks ◽  
Stock Exchange ◽  
Secondary Data ◽  
Fixed Effect Model ◽  
Financial Reports ◽  
Effect Model ◽  
Panel Data Regression ◽  
Data Regression ◽  
Positive Effect

This study aims to analyze the effect of ROE, CAR, NPL, BOPO, and DER simultaneously on stock returns in  commercial banks listed on the Indonesia Stock Exchange. The data used in this study are secondary data in the form of financial reports at PT. Bank Rakyat Indonesi Tbk, PT. Bank Negara Indonesia Tbk, PT. Bank Mandiri Tbk, PT. Bank Central Asia Tbk, and PT. Bank Mega Tbk. from 2014-2019. The data analysis method used is panel data regression analysis, namely the Fixed Effect Model (FEM). The results showed that: ROE theoretically and statistically affect stock returns in commercial banks listed on the Indonesia Stock Exchange. CAR is theoretically and statistically insignificant to stock returns in Commercial Banks listed on the Indonesia Stock Exchange. BOPO has a theoretical effect but does not have a statistical and significant effect on stock returns in  commercial banks listed on the Indonesia Stock Exchange. NPL and DER have no effect on stock returns in Commercial Banks listed on the Indonesia Stock Exchange. ROE, CAR, NPL, BOPO and DER simultaneously have a positive effect on stock returns in) Commercial Banks listed on the Indonesia Stock Exchange. ROE, CAR, NPL, BOPO and DER have the ability to explain their effect on stock returns in Commercial Banks listed on the Indonesia Stock Exchange of 44.09%. The remaining 55.01% is influenced by other variables outside this research model.

scholarly journals The Effect of CEO on Bank Efficiency: Evidence From Private Commercial Banks

2021 ◽  
Vol 12 ◽  
Author(s):  
Israr Khan ◽  
Wang Mansi ◽  
Kuen-Lin Lin ◽  
Chi-Fang Liu ◽  
Kwanrat Suanpong ◽  
...  
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Secondary Data ◽  
Chief Executive ◽  
Fixed Effect Model ◽  
Financial Return ◽  
Education Experience ◽  
Effect Model ◽  
Augmented Dickey Fuller ◽  
White Test

The main purpose of this study was to analyze the effects of Chief Executive Officer (CEO) Key attributes on the financial performance of banks. Current literature gives little attention to the important characteristics of CEOs, therefore, this paper investigates the effects of characteristics of CEOs, such as education, experience, nationality, military background (MTB), and political connectedness (PC), on the financial (return on assets) performance of listed private commercial banks in Pakistan. This research sample included 20 private commercial banks of Pakistan and used Secondary data that was derived from 2011 to 2020, which contained 200 sample observations. This paper used the Fixed effect model, Normality test, Breush–Pagan, white test, multi-collinearity, and Augmented Dickey–Fuller test to investigate the study hypotheses. The main results revealed that CEO MTB and PC significantly and positively affected the financial performance of the bank. It is also found that the CEO's education and Experience have a significant and positive relationships with bank profitability. In contrast, the nationality of the CEO has no significant relationship with the financial performance of the bank.

scholarly journals DAMPAK INKLUSI KEUANGAN TERHADAP STABILITAS SISTEM KEUANGAN DI ASIA

2016 ◽  
Vol 18 (4) ◽  
pp. 409-430 ◽  
Author(s):  
Azka Azifah Dienillah ◽  
Lukytawati Anggraeni
Keyword(s):  
Financial Stability ◽  
Pearson Correlation ◽  
Financial System ◽  
Fixed Effect Model ◽  
Financial Inclusion ◽  
Gdp Per Capita ◽  
Asian Countries ◽  
Effect Model ◽  
Per Capita ◽  
The Stability

Financial inclusion is one of strategy to increase inclusive growth in Asian countries. However, it may cause either stability or instability in the financial system. Therefore, this research aimed to analyze the relationship between financial inclusion and financial stability and to analyze factors that affect the stability of the financial system in seven Asian countries in the periode of 2007-2011. The methods used are Pearson correlation and Fixed Effect Model. The results show that there is negative correlation at 5% significant level between financial inclusion and financial stability. Factors that significantly affect the financial stability are financial inclusion, financial stability in the previous period, non-FDI capital flows to GDP, the ratio of current assets to deposits and Short-term funding, and GDP per capita. Thus the increase in financial inclusion, current assets of banking, GDP per capita, and the portfolio investment can become the strategies to improve the financial stability (Bank z score) on the determined and future year.

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