scholarly journals ANALISIS INCOME SMOOTHING PADA PERBANKAN ISLAM NEGARA-NEGARA TELUK DI TIMUR TENGAH

2017 ◽  
Vol 6 (2) ◽  
pp. 55-64
Author(s):  
Prima Shofiani
Keyword(s):  
Income Smoothing ◽  
Capital Adequacy ◽  
Loan Loss ◽  
Loan Loss Provision ◽  
Capital Adequacy Ratio

Penelitian ini bertujuan menguji income smoothing menggunakan loan loss provision (LLP) pada perbankan Islam. Sampel penelitian ini adalah bank-bank Islam negara-negara Teluk Timur Tengah. Variabel dependen dalam penelitian ini adalah loan loss provision (LLP) dan variabel independen adalah total pembiayaan, non performing finance (NPF) dan capital adequacy ratio (CAR). Analisis data menggunakan regresi data panel dengan EViews 7. Hasil penelitian menunjukkan bahwa non performing finance (NPF) berpengaruh positif terhadap LLP. Total pembiayaan tidak berpengaruh positif terhadap loan loss provision (LLP) dan capital adequacy ratio (CAR) tidak berpengaruh positif terhadap loan loss provision (LLP).   Kata Kunci: loan loss provision (LLP), Income smoothing, Bank Islam

scholarly journals Characteristics of banks as determinants of profit management for Islamic and conventional banks in ASEAN

Accounting ◽  
2021 ◽  
pp. 1179-1188 ◽  
Author(s):  
Suripto Suripto ◽  
Supriyanto Supriyanto
Keyword(s):  
Discriminant Analysis ◽  
Earnings Management ◽  
Capital Adequacy ◽  
Multiple Discriminant Analysis ◽  
Loan Loss ◽  
Loan Loss Provision ◽  
Brunei Darussalam ◽  
Capital Adequacy Ratio ◽  
Asean Countries ◽  
Conventional Banks

This study aims to analyze company characteristics as a determinant of conventional and Islamic bank earnings management in several ASEAN countries (Association of South East Asian Nations). The Multiple Discriminant Analysis was applied to determine the differences between Islamic and Conventional Banks. This test was conducted based on Capital Adequacy Ratio, Income Before Tax and Interest, Non-Performing and Changing Loans, and Company's Size in the banks of Indonesia, Malaysia, and Brunei Darussalam from 2014 to 2018. The data obtained from 200 banking entities were analyzed discriminatively. The results showed that there were simultaneous differences between Capital Adequacy Ratio, Earnings Before Tax, Loan Loss Provision, Non-Performing and Changing Loans, and Company's Size as determinants of earnings management between Islamic and conventional banks. Also, it was found that Company's Size was the dominant variable determining the management differences. Based on Discriminant Analysis, there were significant differences in the determinants of conventional and Islamic earnings management. The Changing Loan variable showed the highest contribution in determining earnings management in Islamic banks. Overall, this study found that conventional banks dominated Islamic system in practicing earnings management.

scholarly journals Stress Testing of the Montenegrin Banking System with Aggregated and Bank-Specific Data

2014 ◽  
Vol 3 (2) ◽  
pp. 85-119
Author(s):  
Sanja Vuković
Keyword(s):  
Stress Testing ◽  
Management Practices ◽  
Banking Sector ◽  
Stress Test ◽  
Banking System ◽  
Capital Adequacy ◽  
Loan Loss ◽  
Aggregated Data ◽  
Loan Loss Provision ◽  
Capital Adequacy Ratio

Abstract There are many different approaches to the process of stress testing and two of them will be investigated in this paper. The first one is a stress test performed on aggregated data i.e. the banking system as a whole. The variable of interest in both exercises is the Loan Loss Provision ratio (hereinafter: the LLP). The main goal of the thesis is to find an answer to the following question: what are the macroeconomic variables that influence LLP the most and how will LLP, as a variable of interest, behave in a situation when all these variables were to experience negative performance at the same time? The resilience of the banking system to such scenario will be tested through the capital adequacy ratio. In order to find out more about the management practices of banks, microlevel data on banks were also used in the analysis. The focus was to see which of the variables are able to explain the LLP ratio for each bank individually and how is this information helpful for possible improvements in the banking sector. The relations between these variables will be able to explain some of the banks’ losses and some of the banks’ practices regarding credit activities. The analysis there will provide for some recommendations for the banks but also for the Central Bank and its way to influence the practices in the banking sector.

scholarly journals Factors Affecting the Loan Loss Provision in Vietnamese System of Commercial Banks

2014 ◽  
Vol 222 ◽  
pp. 89-106
Author(s):  
Hiền Nguyễn Thị Thu ◽  
Tuấn Phạm Đình
Keyword(s):  
Commercial Banks ◽  
Financial Risk ◽  
Capital Adequacy ◽  
Loan Loss ◽  
Factors Affecting ◽  
Loan Loss Provision ◽  
Loan Loss Provisions ◽  
Capital Adequacy Ratio ◽  
Loan Risk ◽  
Theoretical Evidence

Establishing loan loss provisions may affect bank’s profitability and capital adequacy ratio. The paper employs regression analysis to explore operations of loan loss provisions in Vietnamese commercial banks in 2008-2012 in its relationship with bank characteristics. The results show that loan loss provisions of Vietnamese commercial banks are positively related to size and proportion of bad debt and negatively related to financial risk ratio. The paper provides theoretical evidence of the opportunism in selection of accounting policy concerning loan risk management by Vietnamese bank managers.

scholarly journals Loan Loss Provision and Risk-Taking Behavior of Commercial Banks in Pakistan: A Dynamic GMM Approach

2019 ◽  
Vol 11 (19) ◽  
pp. 5209 ◽  
Author(s):  
Changjun Zheng ◽  
Shumaila Meer Perhiar ◽  
Naeem Gul Gilal ◽  
Faheem Gul Gilal
Keyword(s):  
Interest Rate ◽  
Credit Risk ◽  
Risk Taking ◽  
Commercial Banks ◽  
Capital Adequacy ◽  
Bank Risk ◽  
Loan Loss ◽  
Loan Loss Provision ◽  
Capital Adequacy Ratio ◽  
Risk Taking Behavior

The paper analyzes the determinants of the loan loss provision (LLP) of 22 commercial banks in Pakistan from 2010 to 2017. The motive of the research is that LLP is a measure of credit risk as a proxy for bank risk-taking behavior profits and banks’ sustainability. Especially after the occurrence of a global financial crisis. The quantitative research method of data collection from Bureau Van Dijk’s BankFocus portal and the World Bank’s World Development Indicators. Other than considering specific bank variables such as capital adequacy ratio, return on average equity, and government securities, the effects of macroeconomic variable inflation and lending interest rates are explicitly studied. The model of pooled ordinary least squares (POLS), fixed effect (FE), panel corrected standard error (PCSE), and panel data estimation in the form of a general method of moments (GMM) two-step system is used to find the risk-taking behavior of banks in Pakistan. The results obtained by the use of inflation (INF) as an instrumental variable of LLP are highly dependable with a negative impact on loan loss provision. Lending interest rate (LIR) has a positive and significant relationship with LLP and contribute in the study of macroeconomic variables for bank risk-taking, excessive amount of interest rate was not beneficial for banks to earn profits especially during the economic crises. Return on average equity (ROAE) significantly moderates LLP with a negative interaction and helped the bank with profitable operations and save bank from solvency. Capital adequacy ratio (CAR) and government securities (GOV) are insignificant to LLP. The result is robust by measure of endogeneity, and highlights the important role of commercial banks’ sustainability to explain risk-taking behavior in Pakistan with the intention to increase profits after the occurrence of financial crises. The study further contributes to future research on managerial policy and decision making. In summary, the paper on loan loss provision has the capacity to forecast commercial banks’ credit risk for risk-taking in an emerging country.

scholarly journals NON-PERFORMING LOANS, CAPITAL ADEQUACY, LOAN LOSS PROVISION, AND BANK PROFITABILITY: A CASE OF LICENSED GHANAIAN BANKS

2020 ◽  
pp. 8-16
Author(s):  
Shuibin Gu ◽  
Ofori Charles ◽  
Takyi Kwabena Nsiah ◽  
Eric Dwomoh ◽  
Weveh-Wilson Benjamin
Keyword(s):  
Method Of Moments ◽  
Generalized Method Of Moments ◽  
Independent Study ◽  
Capital Adequacy ◽  
Least Squares Regression ◽  
Loan Loss ◽  
Bank Profitability ◽  
Loan Loss Provision ◽  
Capital Adequacy Ratio ◽  
Method Of Moments Estimator

This article explored the affiliation between a non-performing loan, capital adequacy ratio, loan loss provision, and bank profitability. The study was conducted on the licensed commercial banks in Ghana for the era 2014-2019. The two-step system generalized method of moments estimator was utilized to test the hypothesis developed for the study. The independent study variables altogether demonstrated a negative and immaterial association with the bank's profitability as proxied by ROA. A robustness test was conducted utilizing the Three-Stage Least-Squares Regression (3SLS); the outcome was analogous to that of the Two-Step System Generalized Method of Moments estimator. The study suggests that the Central Bank fortifies the capital requirement and keenly monitors banks' risk-taking conduct and banks undertaking due diligence procedures to moderate the shock of non-performing loans and loan loss provision in other to augment the profitability of universal banks. KEYWORDS: Non-Performing Loans, Capital Adequacy, Loan Loss Provision, Bank Profitability, GMM JEL Codes: E58, G21, G32

scholarly journals The effect of loan-loss provision, non-performing loans and third-party fund on capital adequacy ratio

Accounting ◽  
2021 ◽  
pp. 943-950 ◽  
Author(s):  
Mulyanto Nugroho ◽  
Donny Arif ◽  
Abdul Halik
Keyword(s):  
Central Government ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Capital Adequacy ◽  
Third Party ◽  
Loan Loss ◽  
Loan Loss Provision ◽  
The Third ◽  
Capital Adequacy Ratio ◽  
The Third Party

This research was conducted in connection with the effective enactment of International Financial Accounting Standard IFRS 2020 to improve the concept of hedging accounting as well as basic measurement and classification of financial instruments. IFRS carries the concept of Expected loss backup which begins to acknowledge losses if there is a potential failure to pay even though it has not really happened, allowing the bank to form a larger loan-loss provision. The loan-loss provision is formed based on the number of failed pays in credits indicated by the ratio of Non-Performing Loans (NPLs). Fund distribution can be regulated by the Third-party Fund (TPF). The increasing number of loan-loss provisions and NPLs are feared to affect capital conditions for the bank. Therefore, the study aims to determine the partial and simultaneous influence of the loan-loss provision, Non-Performing Loans (NPLs), and third-party Fund (TPF) against the bank's capital adequacy ratio (CAR). The samples in this study are central government-owned banks, namely Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia, and Bank Tabungan Negara period from 2011 to 2018. Data taken is a data time series of the quarterly financial statements published by the respective online website of the bank. The analysis used is a multiple linear regression analysis using SPSS Tools version 21 and Microsoft Excel. The results showed that a partial loan-loss provision had no significant effect on the bank's capital adequacy ratio, while the Non-Performing Loans (NPLs) and the Third-party Fund (TPF) were partially influential of the bank's capital adequacy ratio. Simultaneously the three independent variables have a significant effect on the dependent variable capital adequacy ratio (CAR).

scholarly journals Empirical Analysis of Non-Performing Loans and Liquidity of Deposit Money Banks: Nigeria Experience

2021 ◽  
Keyword(s):  
Monetary Policy ◽  
Gross Domestic Product ◽  
Capital Adequacy ◽  
Domestic Product ◽  
Loan Loss ◽  
Loan Loss Provisions ◽  
Minimum Capital Requirement ◽  
Small Quantum ◽  
Capital Adequacy Ratio ◽  
Loan Growth

Nigerian Deposit Money Banks (DMBs) tend to have suffered the plight of Non-Performing Loans (NPLs) in recent times in no small quantum. Consequently, a large chunk of them have had to increase their loan loss provisions and this may dwindle their liquidity. This study investigates the effect of non-performing loans on liquidity of Deposit Money Banks (DMBs) in Nigeria. A panel regression analysis was performed on a data of 15 quoted DMBs from 2009 to 2019, in order to examine the correlation between the explained variable (banks’ liquidity) and Non-Performing Loans (NPL) while other explanatory variables- Capital Adequacy Ratio (CAR), Bank Size (BS), Loan Growth (LG), Monetary Policy Rate (MPR), Gross Domestic Product (GDP) and Inflation were taken into consideration. Data were extracted from the banks’ yearly financial statements and the World Bank Financial Statistics. Based on the empirical findings, the study found only four variables-Non Performing Loans, Capital Adequacy Ratio, Bank Size and Inflation significantly related at 5% significant level with banks’ liquidity while the other three; Gross Domestic Product, Loan Growth and Monetary Policy Rate were identified as insignificant. The finding also revealed that NPLs has negative effect on banks’ liquidity while CAR, BS and INF showed positive relationship. The study recommends strict compliance of banks with the NPLs tolerable limit set by the Central bank. It also suggests that the CBN take proactive measure to ensure the banks’ compliance with the minimum capital requirement. Keywords: Banks, Financial Institutions, Liquidity, Non-Performing Loans, Performance

scholarly journals Business efficiency of the commercial banks in ASEAN

2016 ◽  
Vol 13 (1) ◽  
pp. 67-76 ◽  
Author(s):  
Abdul Mongid
Keyword(s):  
The Philippines ◽  
Capital Adequacy ◽  
Loan Loss ◽  
Loan Loss Provision ◽  
Business Efficiency ◽  
Personnel Expenses ◽  
Cost Inefficiency ◽  
Asean Countries ◽  
The Cost ◽  
Asset Size

This study examines the determinants of cost inefficiency of banks operating in 8 member countries of the Association of Southeast Asian Nations (ASEAN): Indonesia, Malaysia, Singapore, Thailand, the Philippines, Cambodia, Brunei and Vietnam. The author defines the cost inefficiency using accounting based efficiency known as business efficiency (CIR). Second, the researcher regresses the cost inefficiency ration on a set of bank specific variables (size, equity to total asset, personnel expenses to total expenses) and economic variables (economic growth and inflation rate) using ordinary least squared (OLS) regression analysis. The dataset of 504 banks in the ASEAN countries is used for the period from 2008 to 2012. The results show that the average cost inefficiency ratio during the period is about 59%. Banks from Vietnam exhibit the lowest cost inefficiency relative to banks in the other ASEAN countries. It is found that cost inefficiency is positively determined by inflation, loan loss provision, personnel expenses, capital adequacy and negatively by asset size and liquidity position

scholarly journals Pengaruh Faktor Internal dan Faktor Eksternal terhadap Perataan Laba Bank Umum Syariah Indonesia Periode 2014-2018

2021 ◽  
Vol 1 (2) ◽  
pp. 511-523
Author(s):  
Setiawati Indah Gempita ◽  
Leni Nur Pratiwi ◽  
Lili Masli
Keyword(s):  
Commercial Banks ◽  
Audit Committee ◽  
Secondary Data ◽  
Income Smoothing ◽  
Capital Adequacy ◽  
Good Corporate Governance ◽  
Panel Data Regression ◽  
Capital Adequacy Ratio ◽  
Data Regression ◽  
Internal And External Factors

This study aims to see the effect of Total Financing (TF), Non Performing Financing (NPF), Earnings Before Taxes and Provision (EBTP), Good Corporate Governance (GCG) proxied by the Audit Committee, Capital Adequacy Ratio (CAR), BI rate. and Inflation on Income Smoothing at Islamic Commercial Banks (BUS) for the period 2014-2018. This research is a quantitative study, the selection was by purposive sampling method. The data used are secondary data. The data analysis method uses panel data regression analysis using the Eviews10 program tool. The data population in this study were 12 Islamic commercial banks in Indonesia which will be sampled in the study. The results of this study indicate that simultaneously internal and external factors have a significant effect on income smoothing. Partially the NPF, EBTP, GCG, CAR variables have a significant effect on income smoothing, while TF, BI rate and the inflation rate do not have a significant effect on income smoothing.

scholarly journals Capital adequacy ratio and a bank’s financial stability in Vietnam

2021 ◽  
Vol 16 (4) ◽  
pp. 61-71
Author(s):  
Nguyen Minh Sang
Keyword(s):  
Commercial Banks ◽  
Financial Stability ◽  
Generalized Method Of Moments ◽  
Capital Adequacy ◽  
Policy Implications ◽  
Ho Chi Minh City ◽  
Loan Loss ◽  
Control Variables ◽  
Capital Adequacy Ratio ◽  
The Impact

The objective of this study is to provide more empirical evidence on the impact of the capital adequacy ratio, as well as control and micro variables, on the financial stability of commercial banks in emerging markets such as Vietnam. The study analyzes the impact of the capital adequacy ratio on the financial stability of 18 Vietnamese commercial banks in the period 2010–2020 using the Generalized method of moments (GMM) model. Empirical research results show that the capital adequacy ratio has a positive correlation with the financial stability of Vietnamese commercial banks during the study period. Besides, the study also uses control variables such as Profitability through ROA and ROE, Bank Size (SIZE), Loans to Assets Ratio (LTA), Deposits to Assets Ratio (DTA), and Loan Loss Ratio (LLR), to analyze their impact on the financial stability of Vietnamese commercial banks. Based on the above results, the study proposes some policy implications to enhance the financial stability of Vietnamese commercial banks using the capital adequacy ratio and the control variables from the GMM model that are statistically significant. The paper also pointed out four limitations of the study in terms of data, research samples, methods and research models, so that further research can be more complete. AcknowledgmentThe author wishes to acknowledge support from the Banking University of Ho Chi Minh City. This research was made possible thanks to all valuable support from relevant stakeholders.

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