scholarly journals PENGARUH MANAJEMEN RISIKO KREDIT TERHADAP KINERJA PERBANKAN DI BURSA EFEK INDONESIA

2018 ◽  
Vol 10 (2) ◽  
Author(s):  
Herry Hutabarat ◽  
Sarton Sinambela
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Capital Adequacy ◽  
Operational Cost ◽  
Credit Risk Management ◽  
Income Loss ◽  
Return On Equity ◽  
Operating Income ◽  
Independent Variables ◽  
Dependent Variables

<span lang="EN-ID"><em>This study aim is to test the effect of credit risk management (independent variable) on Return on Asset (ROA) and on Return on Equity (ROE) (dependent variables). Credit risk management is projected with capital adequacy ratio (CAR), non performing loan (NPL), operational cost to operating income, loss reserves, and interest margin (IM). The results showed that from five independent variables and two dependent variables, only 3 independent variables had significant effect on ROA or ROE, which are; Non-performing loan, operational cost to operating income and interest rate. Capital adequacy variable only has significant effect on ROE. The reserve loss variable only has a significant effect on ROA.</em></span>

scholarly journals Effect of Credit Risk Management on Financial Performance of Nigerian Listed Deposit Money Banks

2019 ◽  
Vol 5 (6) ◽  
pp. 53 ◽  
Author(s):  
KAJOLA Sunday Olugboyega ◽  
ADEDEJI Samuel Babatunji ◽  
OLABISI Jayeola ◽  
BABATOLU Ayorinde Tobi
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Performance ◽  
Capital Adequacy ◽  
Financial Health ◽  
Credit Risk Management ◽  
Return On Equity ◽  
Risk Parameters ◽  
And Control ◽  
Risk Measurements

<p>Deposit money banks are concerned with the provision of credit facilities in form of loans and advances to customers. These loans and advances are expected to be repaid by customers in line with the agreement reached with their bankers. Customers’ default in the repayment of loans and advances at the agreed period may lead to bad and doubtful debts and this can affect the financial health, profitability and going concern status of the bank. This study empirically explored the effect of credit risk management on the financial performance of ten listed deposit money banks in Nigeria for the period, 2005-2016. Credit risk management, the independent variable, was surrogated by three parameters- Non-performing Loan to total Loan Ratio (NPLLR); Non-performing Loan to total Deposit Ratio (NPLDR) and Capital Adequacy Ratio (CAR). Return on asset (ROA) and Return on equity (ROE) was used as proxies for financial performance. Using the Random effects generalised least squares (GLS) regression as data estimation technique, the study revealed that all the three credit risk parameters have a significant relationship with ROA and ROE (p&lt; 0.05).Based on the findings, the study recommended that the management of deposit money banks should develop rigorous and robust credit policies that will enable banks to effectively assess the creditworthiness of their customers. The regulatory agencies should also come up with modern credit risk measurements, identification and control. Prompt and necessary action should also be taken against the management of any bank that flouts their credit risk guidelines in order to avoid unpleasant distress in the financial system.     </p>

scholarly journals PENGARUH MANAJEMEN RISIKO LIKUIDITAS TERHADAP KINERJA PERBANKAN DI BURSA EFEK INDONESIA

2018 ◽  
Author(s):  
Herry Cornelius Hutabarat
Keyword(s):  
Risk Management ◽  
Key Words ◽  
Liquidity Risk ◽  
Operating Costs ◽  
Return On Assets ◽  
Return On Equity ◽  
Reserve Requirements ◽  
Operating Income ◽  
Independent Variables ◽  
Dependent Variables

<pre>The study aims to examine the effect of liquidity risk management on Return on Assets / ROA and on Return on Equity / ROE. Risk management is proxies by operating costs on operating income (BOPO), non-performing loans (NPL), and Reserve Requirements (RR). The results showed that the independent variables BOPO and RR had a significant effect on the dependent variable Y1, and simultaneously independent variables had a significant effect on the dependent variables Y1 and Y2.</pre><p><strong> </strong></p><p><strong>Key words : BOPO, NPL, RR, ROA and ROE</strong></p>

Prediction of Return on Equity Using Capital Adequacy Ratio in Commercial Banks: An ANOVA Table Analysis

2014 ◽  
Vol 4 (2) ◽  
Author(s):  
Meenakshi Chaturvedi
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
News Media ◽  
Commercial Banks ◽  
Banking Sector ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Credit Risk Management ◽  
Return On Equity ◽  
The Impact

The purpose of this study is to predict the impact of Credit Risk Management on Profitability of Commercial Banks in India. Data is obtained from different news media, publication and sample banks to describe present scenario of banking sector in India. To analyze the profitability and credit risk management of banks after implementing the Basel II standard, we collected secondary data of ten years (2003 to 2013) from the annual report of banks. Few bar-diagrams have been drawn to compare the performance among six banks. While, to fulfill the research objective, ROE, and CAR is calculated to evaluate the Credit Risk of the Banks. Using these two ratios, researcher constructed the regression model statistics.

scholarly journals The Impact of Credit Risk Management on the Commercial Banks Performance in Nigeria

2014 ◽  
Vol 3 (5) ◽  
pp. 295-306
Author(s):  
Idowu Abiola ◽  
Awoyemi Samuel Olausi
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Commercial Banking ◽  
Capital Adequacy ◽  
Credit Risk Management ◽  
Financial Reports ◽  
Return On Equity ◽  
Management Indicators ◽  
The Impact

Credit risk management in banks has become more important not only because of the financial crisis that the industry is experiencing currently, but also a crucial concept which determine banks’ survival, growth and profitability. The aim of this study is to investigate the impact of credit risk management on the performance of commercial banks in Nigeria. Financial reports of seven commercial banking firms were used to analyze for seven years (2005 – 2011). The panel regression model was employed for the estimation of the model. In the model, Return on Equity (ROE) and Return on Asset (ROA) were used as the performance indicators while Non-Performing Loans (NPL) and Capital Adequacy Ratio (CAR) as credit risk management indicators. The findings revealed that credit risk management has a significant impact on the profitability of commercial banks’ in Nigeria.

scholarly journals Effects of Basel III Framework on Capital Adequacy of Commercial Banks in Kenya

2016 ◽  
Vol 1 (1) ◽  
pp. 61
Author(s):  
Kevin Kombo ◽  
Dr. Amos Njuguna
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Financial Stability ◽  
Safety Net ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Basel Iii ◽  
Credit Risk Management ◽  
Management Staff

Purpose:The purpose of the study was toassess the effects of Basel III framework on capital adequacy requirement in commercial banks in Kenya. The study sought to address the following research questions: why are capital adequacy regulations important in commercial banks in Kenya? What challenges are commercial banks facing in the implementation of capital adequacy requirement? What measures have commercial banks taken to ensure compliance with the capital adequacy requirement?Methodology:A descriptive survey design was applied to a population of 43 commercial banks operating in Kenya. The target population composed of the 159 management staff currently employed at the head offices of the various commercial banks in Kenya. The population was composed of Senior, Middle and Junior or Entry level Management staff. A sample of 30% was selected from within each group.Primary data was gathered using questionnaires which were dropped off at the bank’s head offices and picked up later when the respondents had filled the questionnaires. Descriptive analysis was used to analyze quantitative data while content analysis was used to analyze qualitative data.Results:The findings show that capital adequacy requirement is important in commercial banks because it leads financial stability in the Kenyan economy, improves credit risk management techniques as poor credit risk management requires more capital and leads to reduced vulnerability to liquidity shocks due to the sound capitalization policies being implemented under the Basel III framework. Findings also revealed that capital adequacy affected the balance sheet structure of the commercial banks in Kenya.Unique contribution to theory, practice and policy: The study recommends that banks should continue the pursuit of various strategies to ensure that they are in compliance with Basel III requirements and the Central Bank of Kenya’s Prudential Guidelines. The staff of this committee should be drawn from mainly the finance, legal, compliance and treasury departments. Compliance with the capital requirements will lead to a safety net for all commercial banks as the additional capital will act as a cushion that absorbs losses in case of distress in the commercial banking sector.

scholarly journals The Effect of Credit Risk and Capital Adequacy on the Profitability of Rural Banks in the Philippines

2017 ◽  
Vol 64 (1) ◽  
pp. 83-96 ◽  
Author(s):  
Rufo Mendoza ◽  
John Paolo R. Rivera
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Internal Control ◽  
Management Practices ◽  
The Philippines ◽  
Capital Adequacy ◽  
Control Measures ◽  
Credit Risk Management ◽  
Bank Profitability ◽  
Regulatory Bodies

Abstract This paper examines the credit risk and capital adequacy of the 567 rural banks in the Philippines to investigate how both variables affect bank profitability. Using the Arellano-Bond estimator, we found out that credit risk has a negative and statistically significant relationship with profitability. However, empirical analysis showed that capital adequacy has no significant impact on the profitability of rural banks in the Philippines. It is therefore necessary for the rural banks to examine more deeply if capital infusion would result in higher profitability than increasing debts. The study also implies that it is imperative for the banks to understand which risk factors have greater impact on their financial performance and use better risk-adjusted performance measurement to support their strategies. Rural banks should establish credit risk management that defines the process from initiation to approval of loans, taking into consideration the sound credit risk management practices issued by regulatory bodies. Moreover, rural banks need to enhance internal control measures to ensure the strict implementation of internal processes on lending operations.

scholarly journals Does Credit Risk Management affect the Financial Performance of Commercial Banks in Kosovo?

2018 ◽  
Vol 7 (2) ◽  
pp. 49-57
Author(s):  
Rrustem Asllanaj
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Performance ◽  
Multiple Regression ◽  
Commercial Banks ◽  
Multiple Regression Model ◽  
Capital Adequacy ◽  
Regression Equations ◽  
Credit Risk Management ◽  
The Impact

This study analyses the impact of credit risk management on financial performance of commercial banks in Kosovo, and comparing the relationship between the determinants of credit risk management and financial performance by using CAMEL indicators. Panel data of 85 observations from 2008 to 2012 of ten commercial banks was analysed using multiple regression model. Findings through multiple regression analysis are presented in forms of tables and regression equations. The study also elaborates whether capital adequacy, asset quality, management efficiency, earnings and liquidity have strong or weak relationship with financial performance of commercial banks. The study concludes that CAMEL model can be used as a system of assessment and rating of credit risk management by commercial banks in Kosovo.

scholarly journals The commercial banks’ credit risk efficiency: Empirical evidence from Kosovo

2021 ◽  
Vol 8 (2) ◽  
pp. 240-254
Author(s):  
Arbana Sahiti ◽  
Arben Sahiti
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Capital Adequacy ◽  
Data Envelopment Analysis Model ◽  
Negative Consequences ◽  
Analysis Model ◽  
Tobit Regression ◽  
Credit Risk Management ◽  
Positive Effects

Commercial banks' credit risk management is a function that focuses on events that may affect the achievement of objectives. Improper management will result in negative consequences or results. Therefore, banks usually pay more attention to events with a higher probability and impact of a direct loss of revenue and capital than events that may result in positive effects. This research adopts secondary data and seeks to analyze credit risk management of commercial banks in Kosovo through a developed DEA (Data Envelopment Analysis) model. The study covers seven commercial banks in Kosovo for the period 2008-2016 and uses Tobit regression to determine credit risk efficiency. The estimation results show a statistically significant positive relationship between bank efficiency, capital adequacy, and loans.  Moreover, the study found that banks' efficiency factors, including profitability, deposits, costs, banks size, GDP growth, and inflation, are not statistically significant.

scholarly journals Risk management and profitability of commercial banks of Western Balkans countries of Kosovo, Albania, North Macedonia, and Serbia

2021 ◽  
Vol 8 (1) ◽  
pp. 81-88
Author(s):  
Sevdie Alshiqi ◽  
Arbana Sahiti
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Statistical Significance ◽  
Significant Activity ◽  
Western Balkans ◽  
Credit Risk Management ◽  
Return On Assets ◽  
Positive Dependence ◽  
Return On Equity

Due to their importance, commercial banks currently play a very important role in national financial systems. The profitability of commercial banks depends on how they manage their loans, and credit risk management is thus crucial in the banking system, risk management is significant activity of commercial bank. The main purpose of this study is to observe the extent to which bank profitability is dependent on credit risk management, with a focus on commercial banks in the Western Balkans (Kosovo, Albania, North Macedonia and Serbia). The results reveal a certain assured correlation among credit risk as well as the profitability of banks, where the ratio of non-performing loans (NLPR) has a positive effect on return on equity (ROE) and return on assets (ROA). Capital Insufficiency (CAR) shows that positive dependence is without any statistical significance on return on equity (ROE) and return on assets (ROA).  

scholarly journals Analysis of Credit Risk, Intellectual Capital and Financial Performance of Listed Deposit Money Banks in Nigeria

2021 ◽  
Vol 06 (12) ◽  
Author(s):  
Rislanudeen Muhammad ◽  
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Capital Adequacy ◽  
National Bureau ◽  
Credit Risk Management ◽  
Loan Loss ◽  
Management Culture ◽  
Capital Adequacy Ratio

This paper examined the effects of credit risk, intellectual capital as well as credit risk moderated by intellectual capital on financial performance of fifteen listed deposit money banks in Nigeria (DMBs) from 2007 to 2016. Data were sourced from annual reports of banks and Nigerian National Bureau of Statistics and analysed using Generalised Method of Moments (GMM). The study finds that credit risk index by loan loss ratio negatively affects financial performance of the sampled banks; while capital employed efficiency, loan loss provision moderated by intellectual capital, capital adequacy ratio, income and diversification have positive relationship with banks’ financial performance. Thus, the study recommends that banks should strengthen their credit risk management culture to ensure prompt repayment of loans. The banks should operate within the required capital adequacy ratio to serve as buffer against loan loss provisions provided by the Central Bank of Nigeria. A strong credit risk management culture should be embedded within intellectual capital structure of banks, where all persons at all levels appreciate and understand the banks’ risk management policies as well as strategies and incorporate same into decision-making and business processes.

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