scholarly journals Determinants of Banks Profitability: Empirical Evidence from Ghana’s Commercial Banking Industry

2021 ◽  
pp. 175-189
Author(s):  
Abdul-Hamid Ahmed ◽  
Kouadio Stephane N’Dri
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Negative Impact ◽  
Commercial Banking ◽  
Annual Data ◽  
Z Score ◽  
Significant Negative Impact ◽  
Negative Effect ◽  
The Impact

Over the years, Ghana’s commercial banking industry has been bedeviled with numerous challenges. The unbridled effect of this is the 2018 banking sector megrim which led to the collapse of seven major banks. This pointed out that it is very crucial to identify and mitigate the factors that negatively affect the performance of the banking sector. This paper is used to investigate the effect of banks specific variables (BSVs) and macroeconomic variables (MEVs) on the profitability of commercial banks (NIM, ROE, and ROA) in Ghana using FRED annual data of 25 years. In order to avoid endogeneity problems and aggregation bias, we used the SURE model to run the estimates simultaneously. The result reveals that profit earned by Ghana’s commercial banks is largely influenced by both internal factors such as KA, AQR, LMGT, MEFFI, and Z-Score and fluctuations in the macroeconomic environment (GDP and FOREX). The impact of KA, LMGT, MEFFI, and Z-score is significantly positive whereas AQR (NPLs) is found to have a negative effect on banks profitability. GDP has a significant negative impact on Ghana’s commercial bank’s profitability whiles forex induced commercial banks profitability positively, but inflation CPI does not determine the profitability of commercial banks in Ghana.

The impact of credit risk on the financial stability of commercial banks in Vietnam

2021 ◽  
Vol 11 (2) ◽  
pp. 67-80
Author(s):  
Nguyen Quoc Anh ◽  
Duong Nguyen Thanh Phuong
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Financial Stability ◽  
Dynamic Panel Data ◽  
Z Score ◽  
Return On Equity ◽  
Score Analysis ◽  
Negative Effect ◽  
The Difference ◽  
The Impact

This study investigates the impact of credit risk on the financial stability of Vietnamese commercial banks. The paper uses the Z-score to proxy the financial stability of banks. We use the data of 27 Vietnamese commercial banks on BankScope, during 2010 - 2019. The paper applied a dynamic panel data approach; the selected method is the difference GMM (DGMM). The key question discussed is which factor impacts on Z-score. Analysis results show the negative effect of non-performing loans on the financial stability of banks. When commercial banks have higher non-performing loans, the lower the financial stability is. Additionally, bank-specific variables such as equity on asset ratio, the return on equity, the size of the bank and set of macroeconomic variables affect the bank’s financial stability. Based on the analysis results, we imply relevant policies for the State Bank of Vietnam and commercial banks.

scholarly journals The impact of risk factors on the financial performance of the commercial banking sector in Barbados

2018 ◽  
Vol 7 (1) ◽  
pp. 76-93 ◽  
Author(s):  
Anthony Wood ◽  
Shanise McConney
Keyword(s):  
Risk Factors ◽  
Credit Risk ◽  
Financial Performance ◽  
Banking Sector ◽  
Negative Impact ◽  
Interest Rate Risk ◽  
Commercial Banking ◽  
Country Risk ◽  
Risk Variable ◽  
The Impact

The objective of this paper is to determine the impact of risk factors on the financial performance of the commercial banking sector in Barbados using quarterly data for the period 2000 to 2015. The empirical results indicate that Capital Risk, Credit Risk, Liquidity Risk, Interest Rate Risk and Operational Risk have statistically significant impacts on financial performance. The only risk variable which does not derive this result is Country Risk. In addition, of those variables which proxy external factors, only GDP Growth has a statistically insignificant influence on financial performance. Credit risk exerted a negative impact on the banks’ financial performance, thus the banks must ensure they adopt appropriate measures to minimise the impact of this risk. Higher levels of capital impacted positively on the banking sector’s profitability. This paper is the first effort employing such an extensive dataset based on Barbados’ commercial banking sector and shows the main factors that influence commercial banks’ financial performance in this developing economy.

scholarly journals The Threats of Unsystematic Risks in Jordanian Commercial Banking Sector

2017 ◽  
Vol 9 (9) ◽  
pp. 175
Author(s):  
Ghaith N. Al-Eitan ◽  
Ismail Y. Yamin
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Banking Sector ◽  
Fixed Effect Model ◽  
Commercial Banking ◽  
Capital Adequacy ◽  
Credit Risk Management ◽  
Effect Model ◽  
The Impact ◽  
The Empirical Analysis

The objective of this study is to empirically examine the effect of unsystematic risks on the performance of commercial banks in Jordan, using panel data for the period of 10 years (2005-2015). The study uses earning per share and dividends as dependent variables to represent Banks’ performance. The empirical analysis based on the fixed effect model selected on the basis of Hausman test. The results indicate that the impact of Non-performing loans on commercial banks’ dividends is positive and significant while the impact of capital adequacy is negative and statistically significant on dividends. The results indicate that the credit risk, liquidity risk, non-performing loan and capital adequacy have significant effect on earnings per share and the effects are negative as expected. Based on the study it is recommended that the Jordanian commercial banks needs enhance the process of credit risk management to determine loan defaulter and impose the appropriate legal action against them.

scholarly journals The Impact of Business Intelligence on Strategic Performance in Commercial Banks Operating in the Sate of Kuwait

2020 ◽  
Vol 13 (8) ◽  
pp. 91
Author(s):  
Hamad Salem Al-Merri
Keyword(s):  
Data Storage ◽  
Business Intelligence ◽  
Commercial Banks ◽  
Analytical Approach ◽  
Banking Sector ◽  
Data Extraction ◽  
Commercial Banking ◽  
Strategic Performance ◽  
The State Of Kuwait ◽  
The Impact

This study aimed to identify the impact of business intelligence on strategic performance in commercial banks operating in the State of Kuwait the researcher used the descriptive analytical approach to introduce both business intelligence and strategic performance. The study population consisted of employees working in top and middle management in commercial banks operating in State of Kuwait. Stratified random sample amounting 363 subjects was used. 270 questionnaires were collected representing 74.3% of the total sample. The study concluded that business intelligence system ensures data processing using data storage techniques and data extraction to obtain consistent and qualified information, thus providing the required knowledge to achieve the strategic goals and objectives by end users and executives in the future. The researcher recommends that Kuwaiti banks should keep pace with developments in the field of business intelligence to be employed in a better way in enhancing its strategic performance, in addition to conduct future studies that follow the analytical approach to deepen its utilization in Kuwaiti commercial banking sector.

Improving China's alfalfa industry development: an economic analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wenxin Wang
Keyword(s):  
Negative Impact ◽  
Arable Land ◽  
Secondary Data ◽  
Influential Factors ◽  
Content Type ◽  
Measurement Results ◽  
Significant Negative Impact ◽  
Negative Effect ◽  
The Impact ◽  
Positive Effect

PurposeThis study analyzes the factors which affect the alfalfa cultivation acreage in China and estimates the development of alfalfa planting by the supply model.Design/methodology/approachBased on the characteristics and actual conditions of alfalfa cultivation in China, a naïve empirical model was created to analyze the impact of various influencing factors on the cultivation acreage of alfalfa.FindingsThe analysis of influential factors shows that China's alfalfa planting conforms to naïve price behavior. The prices of alfalfa and per capita arable land occupancy have a positive effect on the cultivation acreage, while the price of competitive crops and transportation costs have a negative effect on the production of alfalfa. Lastly, the 2012 alfalfa subsidy policy has a significant negative impact on alfalfa cultivation acreage.Research limitations/implicationsDue to the limited research on alfalfa supply in China, there is a lack of available research data and statistical data. A large number of data in this study are mainly indirect data derived and calculated from other industrial data. The measurement results may not be fully accurate.Originality/valueThis study represents the first empirical analysis of the characteristics of the factors influencing alfalfa cultivation acreage in China. The secondary data were used to analyze the influence of various control variables on the cultivation acreage of alfalfa, which is different from existing research.

scholarly journals The Impacts of Non-Performing Loan on Profitability: An Empirical Study on Banking Sector of Dhaka Stock Exchange

2017 ◽  
Vol 9 (3) ◽  
pp. 126
Author(s):  
Rozina Akter ◽  
Jewel Kumar Roy
Keyword(s):  
Banking Sector ◽  
Negative Impact ◽  
Stock Exchange ◽  
Red Light ◽  
Net Interest Margin ◽  
Net Profit ◽  
Significant Negative Impact ◽  
Major Factors ◽  
The Impact ◽  
Very High

The Banking sector of Bangladesh is trapped in a gridlock of non-performing loans (NPLs) so much so that NPL accounts for 11.60 percent of the total volume of classified loans. This problem has started to be widening with an evil trend of loan embezzlement among the industrial borrowers in our country. Frequent scam series in banking industry is surely a red light and unfortunately the commercial banks are highly surrounded by it. The goal of the study is to analyze the impact of non-performing loan (NPL) on profitability where in this study considered net interest margin (NIM). This paper attempts to find out the time series scenario of non-performing loans (NPLs), its growth, provisions and relation with banks profitability by using some ratios and a linear regression model of econometric technique. The empirical results represent that non-performing loan (NPL) as percentage of total loans on listed banks in Dhaka Stock Exchange (DSE) is very high and they holds more than 50 % of total non-performing loans (NPLs) of the listed 30 banks in Dhaka Stock Exchange (DSE) for year 2008 to 2013. Moreover it is one of the major factors of influencing banks profitability and it has statistically significant negative impact on net profit margin (NPM) of listed banks for the study periods.

scholarly journals Impact of Liquidity on Profitability: A Study on the Commercial Banks in Bangladesh

2021 ◽  
pp. 73-90
Author(s):  
Sujan Chandra Paul ◽  
Probir Kumar Bhowmik ◽  
Mehbuba Nayan Famanna
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Annual Report ◽  
Secondary Data ◽  
Substantial Effect ◽  
Commercial Banking ◽  
Medium Term ◽  
Correlation And Regression Analysis ◽  
Statistical Sample ◽  
The Impact

This research aims to investigate the effect of banks' liquidity on its profitability; with the ordinary course of business and in the medium term (10 years). A quantitative analysis is performed on a statistical sample of forty (40) commercial banks in Bangladesh. Secondary data is used to evaluate the performance of the last ten years (2009-2018) of the annual report of the commercial banks in Bangladesh with 206 bank years of data gathered to consider all Bangladeshi commercial banks. Proposed variables are: LDR, DAR, CDR, LAR and CR as liquidity representation; on the other hand, ROE is the profitability representation. Five hypotheses have been established to assess the effect of liquidity on profitability. Following a correlation and regression analysis, it is observed that LDR, DAR and CDR had a substantial effect on the profitability measured as ROE, but LAR and CR proved insignificant. Therefore, it can be concluded that, in general, the impact of liquidity has a significant effect on the profitability in the commercial banking sector of Bangladesh. By relying on this report; Bangladeshi banks will be best positioned to keep equality between its liquidity and profitability. Keywords: Liquidity, Profitability, ROE, Commercial Banks

scholarly journals Role of State in the Evolution and Success of Commercial Banks in China

2018 ◽  
Vol 9 (2) ◽  
pp. 38
Author(s):  
Bhabani Shankar Nayak ◽  
Yilin Gao
Keyword(s):  
Competitive Advantage ◽  
Commercial Banks ◽  
Development Process ◽  
Banking Sector ◽  
Banking Industry ◽  
Commercial Banking ◽  
The State ◽  
Financial Reforms ◽  
Large Joint

The article outlines the role of state in the evolution of commercial banks in China. It looks at different stages of its development process. The paper engages with the deepening of state led financial reforms which led to the competitive advantage of China's commercial banking industry. The state-owned commercial banks, large joint-stock commercial banks, and small private commercial banks keep increasing their strengths due to regulations and monitoring by the Chinese state. Therefore, the article argues that state-owned commercial banks have relatively large market share and dominate in commercial banking sector due to the state.

scholarly journals Zeleni cinizam – dimenzije i učinci na kupnju ekoloških prehrambenih proizvoda

2019 ◽  
Vol 9 (1) ◽  
pp. 45-57 ◽  
Author(s):  
Marija Ham
Keyword(s):  
Negative Impact ◽  
Organic Food ◽  
Food Products ◽  
Marketing Strategies ◽  
The Past ◽  
Significant Difference ◽  
Significant Negative Impact ◽  
Negative Effect ◽  
Sustainable Marketing ◽  
The Impact

Numerous criticisms as well as the conspicuous number of unfair manufacturing practices in the past have led to a significant scepticism and distrust by consumers. This deeply rooted distrust, scepticism, and disinterest in some consumers, can be encompassed by the notion of green cynicism. Green cynicism significantly interferes with and disturbs all activities and efforts from the domain of sustainable marketing, given that due to the extreme distrust, it is much harder or even impossible to place the product or maintain sustainable a business entity. This leads to an aggravated acceptance of Oeconomica Jadertina 1/2019. 45 these products by consumers and slower adoption of sustainable marketing strategies by economic operators, which is undoubtedly a socially undesirable phenomenon. For this reason, it is of great importance to study and understand the factors that influence this form of cynicism and how it affects certain behaviours. This paper aims to propose and explain the concept of green cynicism and explore some of its possible dimensions and verify their impact on the intention to buy organic food products. The survey was conducted on a sample of 411 respondents from eastern Croatia representing persons who purchase most household goods. The results based on the regression analysis have shown that the strongest negative effect on intentional purchases of ecological food products is attributed to the disinterest expressed as a lack of time to contemplate these issues at all. The distrust towards the organic food products or labels that distinguish them from conventional products achieves also a significant negative impact. In this research, the impact of scepticism on the issue of the environment did not prove to be significant, which could be a consequence of the fact that it concerns a significant difference in the width of the variable range.

scholarly journals THE IMPACT OF BANKING NETWORK SERVICES THROUGH PROFITABILITY ON INDONESIA BANKING COMPANIES

2020 ◽  
pp. 10-15
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Financial Statements ◽  
Network Services ◽  
Switching Network ◽  
Switching Networks ◽  
Use Of Technology ◽  
Public Data ◽  
The Impact

The banking sector has embraced the use of technology to serve its clients faster and also to do more with less. Emerging technologies have changed the banking industry from paper and branch based banks to digitized and networked banking services. ATM machines and the number of switching networks is among the technologies used in the banking industry. The aim of this study is to analyze the influence of network switching and number of ATM machine through non-interest income to profitability. The paper proposes to examine whether the number of ATM machines of the bank affect the fee-based income, whether the amount of ATM switching network membership of the bank affects the bank’s fee-based income, and whether the feebased income affects the performance of the bank. The study was conducted in banking companies belonging to members of the switching principal network appointed by Bank Indonesia and switching network companies in Indonesia. The data used for this research is represented by financial statements from Indonesian commercial banks that have gone public, data from banking magazines and data available from each bank’s page avaiolable for open access. The number of samples from this study is represented by 30 commercial banks that are listed in IDX. The results of this study show that the number of ATM machines has no significant effect on Fee Based Income. At the same time, the number of switching networks has a significant effect toward Fee Based Income, and the Fee Based Income has no significant effect on the bank’s return on investment.

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