scholarly journals Role of macroeconomic factors predicting financial performance of commercial banks in Nepal

2021 ◽  
Vol 6 (1) ◽  
pp. 39-52
Author(s):  
Prakash Kumar Gautam ◽  
Tenish Gautam
Keyword(s):  
Financial Performance ◽  
Unemployment Rate ◽  
Commercial Banks ◽  
Empirical Studies ◽  
Random Effect ◽  
Random Effect Model ◽  
Secondary Data ◽  
Macroeconomic Factors ◽  
Macroeconomic Variables

Purpose: This study analyzes the effect of macroeconomic indicators such as domestic products, interest rate, inflation rate, and unemployment rate on the financial performance of commercial banks in Nepal. Design/Methodology: Five top commercial banks based on the financial performance were selected with stratified sampling, with secondary data of ten years. Hausman test was used to examine the endogeneity issue in the predictor variables and the effect of predicators on financial performance were estimated using OLS estimation (random effect model). Findings: The study result revealed significant influence of macroeconomic factors except the unemployment rate for estimating ROE of commercial banks in Nepal while no significant impact was revealed for ROA. Among the significant variables, GDP contributes more in predicting the financial performance of commercial banks in Nepal. Implication: As the study found significant role of macroeconomic variables to estimate ROE, bank administrators, government officials, and investors can focus in such variables, especially in GDP for competitive financial performance. They need to develop products based on macroeconomic variables. Besides, this study finds and tries to mitigate the gap in findings of previous empirical studies. Originality/value: This study contributes to the literature on macroeconomic determinants predicting financial performance of banks, more specifically in finding the gap in determining ROA and ROE within the country specific issue.

scholarly journals Bank Profitability Determinants: Firm-Level Observations in the ASEAN-5 Markets

2021 ◽  
Vol 12 (3) ◽  
pp. 77
Author(s):  
Nur Diyana Athirah Binti Adnan ◽  
Wei-Theng Lau ◽  
Siong-Hook Law
Keyword(s):  
Banking Sector ◽  
Random Effect ◽  
Random Effect Model ◽  
Ordinary Least Squares ◽  
Capital Adequacy ◽  
Loan Loss ◽  
Bank Profitability ◽  
Macroeconomic Factors ◽  
Macroeconomic Variables ◽  
Effect Model

This paper aims to investigate the bank-specific characteristics and macroeconomic factors affecting the profitability performance of the Southeast Asian banking sector. The sample markets cover the five original members of ASEAN, i.e. Indonesia, Malaysia, Philippines, Singapore, and Thailand, whereas the sample period encompasses the years between 2010 and 2017. While a healthy financial system is important for the economic sustainability and growth, there are still limited studies to understand how banks generally perform in this region. Our findings largely support the existing hypotheses about the importance of certain micro- and macro variables while contributing new empirical evidence to the current literature. The bank size, loan to assets, loan loss provision, non-interest incomes and expenses, and capital adequacy remain relevant in influencing bank profitability in the ASEAN-5 region. Macroeconomic variables of inflation, interest rate, market concentration and GDP per capita play considerable roles in profitability when they are assessed separately from the bank-specific factors. It is worth noting that the bank-level factors remain important and outplay the macroeconomic factors when they are considered at the same time. The result robustness is of a certain level of satisfaction because comparisons have been performed across individual countries and across different regression models of pooled ordinary least squares model, random effect model, and fixed effect model for all the tentative tests. Both the return on assets and return on equity are examined. Combining both micro- and macroeconomic variables in the regressions also indicates an overall improvement in the r-squared under the same models.

scholarly journals Financial inclusion and it’s effect on poverty in Indonesia

2021 ◽  
Vol 16 (1) ◽  
pp. 97-108
Author(s):  
Thomas Andrian ◽  
Nurbetty Herlina Sitorus ◽  
Irma Febriana MK ◽  
Stefanus Willy Chandra
Keyword(s):  
Economic Growth ◽  
Random Effect ◽  
Random Effect Model ◽  
Secondary Data ◽  
Poverty Rate ◽  
Financial Inclusion ◽  
Analysis Method ◽  
Macroeconomic Variables ◽  
Effect Model ◽  
The Impact

This study aims to analyze and determine the impact of Financial Inclusion in Indonesia and other macroeconomic variables on poverty rate in Indonesia. This study uses secondary data. Analysis method with the Random Effect Model (REM) approach. The results of this study indicate that the variable Bank Service Offices per 1,000 km2 , Ratio of DPK, Ratio CRD have a negative and significant effect on poverty rate in 33 provinces in Indonesia in 2014-2018, and Unemployment Rate (UMP) has a positive and significant effect on poverty rate in 33 provinces in Indonesia in the 2014-2018 period. However, the variable Economic Growth and Inflation (INF) did not have a significant effect on poverty in 33 provinces in Indonesia in the 2014-2018 period. Measuring this dimension is still difficult to do and currently several international institutions were concerned about the development of financial inclusion. Keywords: Financial inclusion, Poverty rate, Economic growth

scholarly journals The Moderating Role of Capital Adequacy in the Effect of Liquidity on the Profitability of Islamic Banking

2020 ◽  
Vol 3 (2) ◽  
pp. 115-125
Author(s):  
Rury Diwira Registanaranti Yastika ◽  
Maria Rio Rita ◽  
Imanuel Madea Sakti
Keyword(s):  
Commercial Banks ◽  
Random Effect ◽  
Random Effect Model ◽  
Efficiency Factor ◽  
Capital Adequacy ◽  
Return On Assets ◽  
Bank Profitability ◽  
Effect Model ◽  
The Relationship

This study aims to examine the effect of liquidity on profitability with capital adequacy as a moderating variable in Islamic commercial banks in Indonesia. The research sample was 14 Islamic commercial banks during the 2016 - 2018 observation period. The dependent variable is profitability measured using Return On Assets (ROA), the independent variable is liquidity measured using the Financing to Deposit Ratio (FDR), the moderating variable is measured using the Capital Aquendency Ratio (CAR), and several control variables. Non Performing Financing (NPF), Operational Efficiency (BOPO), and Bank Size (SIZE). Hypothesis testing uses multiple linear regression with a random effect model. The results showed that bank liquidity was not proven to increase bank profitability and capital adequacy was not proven to moderate the relationship between the two. The results indicated that the efficiency factor and problematic financing The results indicate that the efficiency factor and non-performing financing are the main factors in influencing bank profitability.

scholarly journals Effect of Inflation and Economic Growth on The Rate of Unemployment

2021 ◽  
Vol 7 (4) ◽  
pp. 609-617
Author(s):  
Azaluddin Azaluddin ◽  
Lia Hanifa
Keyword(s):  
Economic Growth ◽  
Data Analysis ◽  
Linear Regression ◽  
Unemployment Rate ◽  
Quantitative Research ◽  
Random Effect ◽  
Random Effect Model ◽  
Secondary Data ◽  
Research Data ◽  
Effect Model

This study aims to determine the effect of inflation and economic growth on the unemployment rate in Indonesia. This research is a quantitative research. Data analysis in this study used multiple linear regression with a random effect model, which was processed using the EViews 10 application. The population in this study was all provinces in Indonesia in 2016-2018. The sample in this study was 34 provinces in Indonesia. The data used in this study is secondary data obtained from the Central Statistics Agency. The results of this study indicate that inflation and economic growth have a negative and insignificant effect on the unemployment rate in Indonesia. Based on the F test and t test, inflation and economic growth variables have no significant effect on the unemployment rate in Indonesia, either partially or simultaneously.

scholarly journals EVALUATING BANKS FINANCIAL PERFORMANCE USING FINANCIAL RATIOS: A CASE STUDY OF KUWAIT LOCAL COMMERCIAL BANKS

2019 ◽  
Vol 4 (2) ◽  
pp. 56-68
Author(s):  
Abuzarqa Rawan
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Random Effect ◽  
Random Effect Model ◽  
Balance Sheet ◽  
Financial Ratios ◽  
Book Value ◽  
The Difference ◽  
And Performance ◽  
Retained Earnings

This study investigates the effect of Leverage, Total deposit to total assets, Total loans to total assets, Retained earnings to total assets, and Tangible book value per share ratios on banks’ financial performance for Return on Assets (ROA) as the dependent variable. The data were obtained from the financial statement (Income statement and Balance sheet) of the selected banks. The results were found by analyzing the financial ratios of five commercial banks in Al-Kuwait throughout five years (2013–2017). We used analytical methods which led us to the presented results. MANOVA and ANOVA analysis were used to show the difference between banks in their financial situation and performance, and then the panel regression model used to study relationships among variables. The Hausman test was applied to compare fixed and random effect models which were shown that the random effect model gives the better result. Our findings show that the independent variables “Total deposit” to “total assets” and “Retained earnings” to “total assets” have a strong significant impact on our dependent variable ROA. “Leverage” and “Total loans” to “total assets” have a less significant effect on the banks’ financial performance (ROA) while Tangible book value per share does not affect the ROA.

scholarly journals The Influence of Financial Performance against Stock Prices in Companies Listed in LQ45 Index 2012 - 2016 Period

2018 ◽  
Vol 7 (4.34) ◽  
pp. 270
Author(s):  
John Henry Wijaya ◽  
Gusni . ◽  
Kartika .
Keyword(s):  
Financial Performance ◽  
Stock Prices ◽  
Stock Price ◽  
Trading Volume ◽  
Random Effect ◽  
Random Effect Model ◽  
Secondary Data ◽  
Sampling Technique ◽  
Coefficient Of Determination ◽  
Independent Variables

This study aims to determine the effect of financial performance of each variable on stock price of the companies listed in the LQ45 Index in 2012 – 2016. This type of research used in this research is explanatory research with descriptive research method and correlation. This study used secondary data. The research population comprised LQ45 companies in 2012-2016 consisting of 45 companies. The sample was selected by the purposive sampling technique and 21 companies were included in the research sample. The data analysis technique was panel data regression using the random effect model. The results of the study showed that earnings per share had a significant effect on stock price. Cash position had a significant effect on stock price. Trading volume had a significant effect on stock price. While return on equity, debt to asset ratio and firm size did not have significant effect on stock price. The results of research F-test showed that the model in regression equation is just right. The coefficient of determination (R2) in this study was 0.758096. This means that the contribution of all independent variables was explained the dependent variable was 75.8%, while the remaining 24.2% was explained by independent variables outside the model.  

scholarly journals A study on Factors affecting Financial performance of Indian Banking Sector

2020 ◽  
Vol 7 (2) ◽  
pp. 9-16
Author(s):  
Ritu Bajaj ◽  
Anshu .
Keyword(s):  
Financial Performance ◽  
Interest Rates ◽  
Commercial Banks ◽  
Banking Sector ◽  
Performance Indicator ◽  
Research Work ◽  
Exploratory Research ◽  
Factors Affecting ◽  
Macroeconomic Variables

In India there are different sectors which play the major role of accelerator in the growth of Indian economy. In this study, the area of focus is financial transactions sector specially banking sector which plays a momentous role in the economic growth by regulating and controlling the demand for and supply of money. The Indian banking sector supports the fastest growing economy of the world but it is grappling with multiple challenges. This research work analyzes the different variables that affect the financial performance of scheduled commercial banks in India and establish the relationship between selected macroeconomic variables and financial performance indicator. It also highlights the role of banking in changing economic scenario of India. The present study is empirical by nature. Descriptive cum exploratory research design has been used in this study. It has been found that GDP, CPI, exchange rate and lending interest rates are significant macroeconomic variables for determining the financial performance of scheduled commercial banks in India. It has been revealed that long term relationship exists between the selected macroeconomic variables and financial performance variables.

Analisis Kinerja Keuangan Bank Umum Syariah Melalui Pendekatan Islamicity Performance Index

2021 ◽  
Vol 7 (2) ◽  
Author(s):  
Safaah Restuning Hayati ◽  
Mutiah Hanifah Ramadhani
Keyword(s):  
Financial Performance ◽  
Commercial Bank ◽  
Performance Index ◽  
Commercial Banks ◽  
Secondary Data ◽  
Sampling Technique ◽  
Descriptive Research ◽  
Index Approach ◽  
Principles Of Justice ◽  
Quantitative Descriptive

This study aims to determine how the financial performance of Islamic commercial banks in Indonesia through the islamicity performance index approach for the period 2013-2017, by the principles of justice, halalness, and purification. This study using quantitative descriptive research. The number of banks sampled are five Islamic commercial banks in Indonesia that have been selected, through a purposive sampling technique first. These banks are BRI Syariah, BNI Syariah, Mandiri Syariah, BCA Syariah, and Victoria Syariah. The type of data used is secondary data taken from the financial statements of each islamic commercial bank that is sampled. Through the islamicity performance index approach, the results of this study indicate that the financial performance of islamic commercial bank is unsatisfactory, based on the average of the variables that have been processed in accordance with predicate valuation standards.

THE EFFECT OF THE SHARIA SUPERVISORY BOARD AND THE BOARD OF COMMISSIONERS ON THE FINANCIAL PERFORMANCE OF SHARIA COMMERCIAL BANKS IN INDONESIA

2021 ◽  
Vol 3 (1) ◽  
pp. 60-73
Author(s):  
Ahmad Fauzul Hakim Hasibuan ◽  
Fuadi Fuadi ◽  
Angga Syahputra
Keyword(s):  
Data Analysis ◽  
Financial Performance ◽  
Commercial Banks ◽  
Supervisory Board ◽  
Secondary Data ◽  
Sampling Technique ◽  
Islamic Banks ◽  
Purposive Sampling ◽  
Islamic Bank

This study aims to determine the influence of the Sharia Supervisory Board and the Board of Commissioners on the Financial Performance of Islamic Banks in Indonesia. This study used secondary data from 12 banks.The sampling technique used is the purposive sampling technique. The method of data analysis used is multiple linear regression.The results partially show that the sharia supervisory board and board of commissioners positively and significantly influence the financial performance of Islamic banks in Indonesia. Simultaneously,the board of commissioners and the sharia supervisory board positively and significantly influence the financial performance of Islamic bank

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