scholarly journals Credit Portfolio Management in Nepalese Commercial Banks

2018 ◽  
Vol 10 (1) ◽  
pp. 101-109
Author(s):  
Buddhi Kumar Malla
Keyword(s):  
Financial Institutions ◽  
Portfolio Management ◽  
Commercial Banks ◽  
Quantitative Methods ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Credit Portfolio ◽  
Credit Portfolio Management

Credit portfolio management is a key function for banks (and other financial institutions, including insurers and institutional investors) with large, multifaceted portfolios of credit, often including illiquid loans (Nario, Pfister, Poppensieker & Stegemann, 2016). After global financial crisis of 2007-2008, the credit portfolio management function has become most crucial functions of the bank and financial institutions. The Basel III, third installment of Basel accord was developed after crisis to strengthen bank capital requirements by increasing bank liquidity and decreasing bank leverage that encourages banks to measure credit risk of bank's portfolios. The Basel committee also raises an issue concerning the application of the risk weights used in the capital adequacy framework to determine exposure to risk assets for the purpose of determining large credit exposure (Morris, 2001).The portfolio management of the Nepalese banking sector has been improved remarkably during last 10 years due to the strict regulation of Nepal Rastra Bank. This journal will try to describe the present credit portfolio management practice of Nepalese commercial banks by using qualitative and quantitative methods. In this study, concentration of banks for credit portfolio management has been studied by analyzing security wise loan, product wise loan and sector wise concentration of loan where the researcher has found assorted outcomes. This research also aims to provide some suggestions to overcome with problems associated with credit portfolio.The Journal of Nepalese Business Studies Vol. X No. 1 December 2017, Page: 101-109

scholarly journals Evaluating the Processes of Management of Credit Portfolio of JSC CB «PrivatBank»

2020 ◽  
Vol 10 (513) ◽  
pp. 325-332
Author(s):  
N. P. Pohorelenko ◽  
◽  
A. Y. Yurchenko ◽  
Keyword(s):  
Portfolio Management ◽  
Banking Sector ◽  
Analytical Data ◽  
Bank Lending ◽  
Financial Indicators ◽  
The Status ◽  
Credit Portfolio ◽  
Research Period ◽  
Credit Portfolio Management

The article is aimed at studying the status and structure of the credit portfolio of JSC CB «PrivatBank», also evaluating the processes of management of the bank’s credit portfolio through the computation of the coefficient of credit portfolio management efficiency. While analyzing financial indicators, a consideration and a research of the status of bank lending in modern conditions of the national economy of Ukraine were carried out. The reasons for reducing the proportion of the credit portfolio in the GDP structure during the research period are summarized. The fundamental principles of the credit portfolio management of JSC CB «PrivatBank» were analyzed in accordance with the «Regulation on credit policy». As a result of the research, the analysis of the main analytical indicators of credit portfolio management was accomplished, the structure of the credit portfolio and the structure of the bank’s portfolio credit quality during 2016-2019 were determined. On the basis of analytical data, the coefficient of efficiency of management of the bank’s credit portfolio was computed. Actual problems affecting the process of management of the bank’s credit portfolio were considered. The indicators of the efficiency of credit portfolio management of JSC CB «PrivatBank» for 2016-2019 are computed. It is determined that the key challenges for both the researched bank in particular and the banking sector in general remain a high proportion of non-performing loans. Decisive actions on the part of the management of JSC CB «PrivatBank» will help to improve the structure of the credit portfolio and reduce the amount of troubled debts of the bank. Ways to solve problems of improvement and enhancing the quality of credit activity of the bank are prospects for further research.

scholarly journals Ketahanan Bank Umum Syariah di Indonesia Terhadap Fluktuasi Makroekonomi dalam Negeri dan Suku Bunga Dana Federal Reserve

2021 ◽  
Vol 1 (2) ◽  
pp. 349-361
Author(s):  
Donna Sita Soraya Kristanti Jatmiko ◽  
Djoni Djatnika ◽  
Setiawan Setiawan
Keyword(s):  
Interest Rates ◽  
Federal Reserve ◽  
Commercial Banks ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Capital Adequacy ◽  
Return On Equity ◽  
Vector Error Correction ◽  
The Global Financial Crisis ◽  
Internal And External Factors

The development of banking in a country cannot be separated from internal and external factors that can influence it. The monetary crisis in 1998 and the global financial crisis in 2008 are some examples that show that the banking sector can be affected by the surrounding economic conditions, both from within and outside the country. The purpose of this study is to determine the resilience of Islamic commercial banks in Indonesia if there are shocks that occur in macroeconomics, in this case, namely inflation, exchange rates, Bank Indonesia benchmark interest rate (BI rate), SBIS yields (rSBIS) and Federal Reserve funds interest rates. (FFR). This study uses the Vector Autoregression (VAR) and Vector Error Correction Model (VECM) methods. The conclusion of this study is that Non-Performing Financing (NPF) and Return on Assets (ROA) in Islamic commercial banks in Indonesia tend to be more resistant to fluctuations that occur in domestic macroeconomics and FFR. The Capital Adequacy Ratio (CAR) is relatively stable in responding to a shock, while the Return on Equity (ROE) and Financing Deposit Ratio (FDR) have fluctuated in the long term in other words, they are more vulnerable to shocks and fluctuations that occur in domestic macroeconomic variables and FFR.

scholarly journals Banking sector reforms in Kenya: Progress and challenges

2012 ◽  
Vol 10 (1) ◽  
pp. 88-96
Author(s):  
Sheilla Nyasha ◽  
Nicholas M. Odhiambo
Keyword(s):  
Central Bank ◽  
Financial Institutions ◽  
Commercial Banks ◽  
Banking Sector ◽  
Banking System ◽  
Capital Adequacy ◽  
Financial Systems ◽  
African Countries ◽  
High Interest Rate ◽  
The Past

This paper gives an overview of the banking sector in Kenya; it highlights the reforms since the country‟s independence in 1963; it tracks the growth of the banking sector in response to the reforms implemented over the past four decades; and finally, it highlights the challenges facing the banking sector in Kenya. The country‟s banking sector consists of more than 40 commercial banks, with the Central Bank of Kenya, which is the country‟s central bank, at the apex. Since the 1980s, the Kenyan government has implemented a number of banking sector reforms – in order to safeguard and improve the banking sector. The response to these reforms by the banking sector has been varied. As a result of these reforms, there has been a shift in the dominance from the State-owned banks to the private commercial banks. There has also been an improvement in the Central Bank‟s oversight of the financial institutions, and an enforcement of the banks‟ capital-adequacy requirements. By the standards of African countries, Kenya currently has one of the most developed banking systems in Africa. The country has enjoyed a substantial bank-based financial sector development over the years, and its institutional framework has also grown stronger. However, like many other developing countries‟ financial systems, the Kenyan banking system still faces wide-ranging challenges, such as high interest rate spreads and financial inclusion challenges

scholarly journals Financial Inclusion and Bank Stability of Commercial Banks Listed in Nairobi Securities Exchange, Kenya

2020 ◽  
Vol 2 (1) ◽  
pp. 64-81
Author(s):  
Daisy Wairimu Kinyua ◽  
Job Omagwa
Keyword(s):  
Service Delivery ◽  
Central Bank ◽  
Customer Service ◽  
Financial Institutions ◽  
Commercial Banks ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Financial Inclusion ◽  
Capital Adequacy ◽  
Bank Stability

Following the global financial crisis of 2007-2009, policy makers, regulators and financial institutions have heavily invested in initiatives and reforms aimed at improving the financial stability of the banking sector. However, despite these initiatives, many of the listed commercial banks in the recent past have continued to report dismal performance. Additionally, the stability levels of the banks remain low despite implementation of financial inclusion policies which raises concern. The study sought to determine the effect of financial inclusion on bank stability of Commercial banks listed in Nairobi Securities Exchange, Kenya. The specific objectives were to establish the effect of financial availability, financial accessibility, financial usage, and service delivery on bank stability. The study employed a descriptive research design and targeted 11 commercial banks listed in Nairobi Securities Exchange, Kenya. The period scope was year 2014 to year 2018 and purposive sampling was applied in picking a sample of 55 respondents. Primary data was collected using questionnaires while secondary data was gathered utilizing a document review guide. Multiple regression analysis, correlation analysis, and descriptive statistics were applied in the data analysis. The study found that financial availability (p=0.033), financial accessibility (p=0.015), financial usage (p=0.039) and service delivery (p=0.023) all had significant effects on bank stability of commercial banks listed in Nairobi Securities Exchange, Kenya. The study concludes that financial availability, financial accessibility, financial usage, and service delivery play a crucial role in fostering stability of listed commercial banks in Kenya. The study recommends that central bank should ensure compliance on Central Bank of Kenya policies that govern capital adequacy to avert risks associated with Non-Performing Loans. Commercial banks listed in Nairobi Securities Exchange are recommended to embrace latest technologies in service provision. In addition, financial institutions need to invest in customer service by first providing employees with the right skills and technology to provide exceptional customer service. Further, banks are recommended to put in place strong lending policies as well as debt recovery measures which will improve their stability levels.

Managing Bad Debts in Commercial Banks of the Republic Of Uzbekistan

GIS Business ◽  
2019 ◽  
Vol 14 (4) ◽  
pp. 9-15
Author(s):  
Abdikarimova Dinara Rustamxanovna
Keyword(s):  
Developing Countries ◽  
Portfolio Management ◽  
Commercial Banks ◽  
Banking Industry ◽  
Early Years ◽  
Upward Trend ◽  
The Republic ◽  
Credit Portfolio ◽  
Credit Portfolio Management

The problem of collectability of loans in commercial banks exists in the banking industry of many developing countries. In the Republic of Uzbekistan, since the early years of independence, commercial banks have been experiencing many issues concerning bad and/or doubtful debts. These types of loans appeared because of either poor and inaccurate collateral assessment or bad credit portfolio management. However the share of bad and doubtful debts in state owned banks is higher than private commercial banks. This paper studies the origin of the issue related to bad debts and answers why state owned banks have had an upward trend in the amount of those debts for the last 5 years. In addition, it develops the ways of addressing those issues.

scholarly journals Resilience of commercial banks of Bangladesh to the shocks caused by COVID-19 pandemic: an application of MCDM-based approaches

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ratan Ghosh ◽  
Farjana Nur Saima
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Stock Exchange ◽  
Multiple Criteria Decision Making ◽  
Capital Adequacy ◽  
Negative Effects ◽  
Content Type ◽  
Economic Event ◽  
Low Performance ◽  
Credit Portfolio

PurposeThe purpose of this study is to analyze and forecast the financial sustainability and resilience of commercial banks of Bangladesh in response to the negative effects of COVID-19 pandemic.Design/methodology/approachEighteen publicly listed commercial banks of Dhaka Stock Exchange (DSE) have been taken as a sample for this study. To measure the riskiness of banks' credit portfolio, nine industries of DSE have been considered to determine probable loss of revenue arising from the COVID-19 pandemic shock. Moreover, two commonly used multiple-criteria-decision-making (MCDM) tools namely TOPSIS method and HELLWIG method have been used for analyzing the data.FindingsBased on the performance scores under TOPSIS and HELLWIG method, banks are categorized into three groups (six banks each) namely top resilient, moderate resilient and low resilient. It is found that EBL and DBBL are the most resilient banks, and ONEBANK is the worst resilient bank in Bangladesh in managing the COVID-19 pandemic shock.Research limitations/implicationsThis study concludes that banks with low capital adequacy, low liquidity ratio, low performance and higher NPLs are more vulnerable to the shocks caused by the COVID-19 pandemic. The management of commercial banks should emphasize on maintaining higher capital base and reducing default loans.Originality/valueResilience of the Bangladeshi banking sector under any adverse economic event has been examined by only using stress testing approach. This study is empirical evidence where both TOPSIS and HELLWIG MCDM methods have been used to make the result conclusive.

scholarly journals The Efficiency of Credit Portfolio Management in Pakistan’s Banking Sector

2016 ◽  
Vol 4 (2) ◽  
pp. 51-72 ◽  
Author(s):  
Syed M. Waqar Azeem Naqvi ◽  
Tahseen M. Khan ◽  
Sayyid Salman Rizavi
Keyword(s):  
Portfolio Management ◽  
Banking Sector ◽  
Foreign Banks ◽  
Aggregate Level ◽  
Managerial Decision ◽  
Nonperforming Loans ◽  
Public Banks ◽  
Credit Portfolio ◽  
Over Time ◽  
Credit Portfolio Management

This study highlights the differences in performance of commercial banks operating in Pakistan in the context of credit portfolio management. Specifically, we look at their credit allocation policies and outcomes in the shape of nonperforming loans (NPLs). We categorize a sample of 34 banks into four major groups: public, private, Islamic and foreign banks. The study tests several hypotheses related to the overall efficiency of banks’ credit portfolio management over time as well as the drivers of NPLs and priority sectors for lending across these four categories. The findings broadly suggest that public banks tend to suffer most from NPLs, whereas Islamic and foreign banks manage their portfolios more efficiently. NPLs are highest in the priority lending sectors across all types of banks, which underscores the inefficiency of managerial decision-making when managing credit portfolios. Over time, at an aggregate level, all four types of banks have become less efficient, as reflected by the increase in NPLs as a percentage of gross credit and assets.

scholarly journals Resistance of commercial banks to the crisis caused by the COVID-19 pandemic: the case of Poland

Equilibrium ◽  
2020 ◽  
Vol 15 (2) ◽  
pp. 205-234 ◽  
Author(s):  
Zbigniew Korzeb ◽  
Paweł Niedziółka
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Value Added ◽  
Capital Adequacy ◽  
System Stability ◽  
Linear Ordering ◽  
Economic Sectors ◽  
Diagnostic Features ◽  
Credit Portfolio ◽  
The Impact

Research background: The analysis allows to assess the impact of the industry structure of the credit portfolio on the resistance of commercial banks to the crisis resulting from the COVID-19 pandemic. It uses two independent methods to measure the impact of the pandemic on industry risk and the methodology allowing to prioritize industries in terms of potential negative effects of the crisis. Purpose of the article: The aim of the research is to assess the resilience of commercial banks operating in the Polish banking sector to the potential effects caused by the COVID-19 pandemic. The diagnostic features of 13 commercial banks were selected for its implementation. Methods: Two linear ordering methods were used, namely the Hellwig method and the TOPSIS method. The following were used as the criteria for parametric assessment of the resilience of commercial banks: capital adequacy, liquidity level, profitability of business activity, share in the portfolio of exposures with recognized impairment and the resilience of the bank's credit portfolio to the risk resulting from the exposure in economic sectors. These sectors were classified according to the level of risk associated with the effects of the crisis caused by the COVID-19 pandemic. Findings & Value added: The study allows to conclude that the largest banks conducting their operations in Poland are the most resistant ones to the consequences of the pandemic. At the same time, the banks most vulnerable due to the crisis were identified. The conclusions can be used, inter alia, in the process of managing the financial system stability risk and contribute to the discussion on the impact of the pandemic on the condition of commercial banks in emerging markets.

Basel Capital Adequacy Ratio Standard in The Light of Islamic Law Perspective

2016 ◽  
Vol 1 ◽  
pp. 308-317
Author(s):  
Adi Rahmanur Ibnu
Keyword(s):  
Financial Crises ◽  
Global Economy ◽  
Banking Sector ◽  
Islamic Law ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Minimum Capital ◽  
Capital Adequacy Ratio ◽  
Global Banking ◽  
Banking Development

Bank is one of the most important pillars of economy activities. However, banking sector has a real potential crisis threat. Alongside with the steady current global banking development, financial crises that have happened clearly affected global economy. Based on that situation, BIS (Bank for International Settlement) – an international financial standard setting organization, realizes the urgency to establishan international financial standard and supervision to anticipate future potential financial crises. This research aims to identify how Capital Adequacy Ratio Standard in Basel Capital Accord (II) based on Islamic law perspective. The research is conducted by analyzing Basel Capital Accord published by BIS. The research uses library research method to find out the aimed result. The focus is on the 1st pillar of Basel II publication that is Minimum Capital Requirements (CAR) policy. CAR, as an Islamic economics policy, will be analyzed using falāḥ approach. Falāḥ is an Islamic economics objective that consists of happiness, success, accomplishment or good luck concept. The earthly dimension of falāḥ has some parameters that can be used to analyze Islamic economics policy. Additionally, the Islamic fiqh maxim takes part in analyzing the policy. The maṣlaḥat concept in fiqh maxim approach shares aim with falāḥ concept in the sense that all of sharia law aims for success, happiness, eternal survival etc. The maṣlaḥat can be accomplished by extinguishing mafsadat or seizing maṣlaḥat. The maṣlaḥat aspect is essential to determine the compatibility Basel Capital Accord with jurisprudential maxim i.e harm must be dispelled (al-dharāru yuzāl). The conclusion results are, 1) Basel Capital Accord focuses on macro-prudential aspect in order to anticipate potential financial crises, 2) beneficial/interest (maṣlaḥat) aspects of the hereafter, cooperation principle, justice, fairness and the prohibition of exploitation are not the core value of Basel Capital Accord frame work, thus 3) the achievement of maslahat as intended by sharia i.e. jurisprudential maxim are not convincing. Therefore, 4) Basel Capital Accord as a regulation basis is not in line with jurisprudential maxim i.e harm must be dispelled (al-dharāru yuzāl).

Sign in / Sign up

Export Citation Format

Share Document