scholarly journals Macroeconomic Determinants of Nonperforming Loans of Romanian Banks

2020 ◽  
Vol 12 (18) ◽  
pp. 7533
Author(s):  
Teodor Hada ◽  
Nicoleta Bărbuță-Mișu ◽  
Iulia Cristina Iuga ◽  
Dorin Wainberg
Keyword(s):  
Banking Sector ◽  
Critical Issue ◽  
Strong Correlations ◽  
Macroeconomic Factors ◽  
Factors Affecting ◽  
Nonperforming Loans ◽  
The Stability ◽  
Macroeconomic Determinants ◽  
Main Factor

The banking sector plays an important role in the development of any economy. The performance of the loans in bank portfolios is a critical issue for the banking sector. The increased number of nonperforming loans (NPLs) after the financial crisis of 2008 has questioned the robustness of many banks and the stability of the entire sector. Our study aims to present the most important aspects related to NPLs and to investigate some macroeconomic determinant factors affecting the rate of NPLs in Romania. Based on a set of data for the period 2009–2019, the analysis of NPLs was made using linear regression. The results showed that all selected independent variables (exchange rates of the most used currencies (EUR, USD and CHF), unemployment rate, and inflation rate) have a significant impact on the dependent variable NPL. The study reveals strong correlations between NPLs and the macroeconomic factors studied and that the Romanian economy is clearly connected to the quality of the loan portfolios. Additionally, an econometric analysis of the empirical causes of NPLs shows that the RON–CHF exchange rate has been the main factor in increasing the NPL ratio in the last 5 years in Romania.

Nonperforming loans and bank profitability: evidence from an emerging market

2016 ◽  
Vol 7 (4) ◽  
pp. 462-481 ◽  
Author(s):  
Esther Laryea ◽  
Matthew Ntow-Gyamfi ◽  
Angela Azumah Alu
Keyword(s):  
Banking Sector ◽  
Emerging Market ◽  
Bank Profitability ◽  
Macroeconomic Factors ◽  
Policy Makers ◽  
Content Type ◽  
Nonperforming Loans ◽  
Panel Model ◽  
Macroeconomic Determinants ◽  
The Impact

Purpose The purpose of this paper is to investigate the bank-specific and macroeconomic determinants of nonperforming loans (NPLs) as well as the impact of NPLs on bank profitability. Design/methodology/approach Using a sample of 22 Ghanaian banks over the period 2005-2010, the study employs a fixed effect panel model in estimating three different empirical models. Findings The study finds new evidence of bank-specific factors as well as macroeconomic factors determining NPLs. Inflation and industry concentration are not significant in determining NPLs, although both are positively related to NPLs. Practical implications The findings of this study have important implications for policy makers and bank managers. Originality/value The paper offers significant value in shaping and improving the banking sector of emerging markets.

MODELING THE INFLUENCE OF THE STRUCTURE AND QUALITY OF ASSETS ON THE PROFITABILITY OF A COMMERCIAL BANK

2021 ◽  
pp. 10-18
Author(s):  
Alena S. Kudriavtseva ◽  
Olga G. Arkadeva
Keyword(s):  
Economic Analysis ◽  
Commercial Banks ◽  
Financial Stability ◽  
Banking System ◽  
Factors Affecting ◽  
Correlation And Regression Analysis ◽  
The Stability ◽  
Classical Economic ◽  
Sound Management

In modern conditions, the methods of classical economic analysis are not enough to solve the problem of bank stability. This requires the development of methods and tools to analyze the current situation in the bank and to develop sound management decisions aimed at ensuring the stability of the bank. The article notes that the analysis of the influence of the structure and quality of assets on the profitability of commercial banks is an important step for assessing the financial position and reliability of a bank, and a method is proposed for constructing a model of the dependence of bank’s profitability on the factors that determine it. The scientific sources were the works of Russian and foreign researchers in the field of modeling and characteristics of the banking system, financial stability of credit institutions, assessment of the creditworthiness of potential borrowers, system organization and information technology. The article uses the methods of economic analysis, differential calculus and mathematical statistics, as well as the achievements of the main scientific schools dealing with the problems of economic and mathematical modeling and economic analysis of banking. In order to determine the most significant economic factors affecting the profitability of commercial banks, generalization of the theoretical, methodological and applied aspects of studies devoted to the study of the influence of the structure and quality of assets on the profitability of commercial banks was carried out, and a correlation and regression analysis was made. The model presented in the article can be used to predict changes in the profitability of Russian commercial banks and to predict promising directions for growth in profit and profitability of the bank.

scholarly journals Bank Specific and Macroeconomic Determinants of Bank Profitability

2016 ◽  
Vol 3 (2) ◽  
pp. 14-18
Author(s):  
Muhammad Ehsan Javaid
Keyword(s):  
Panel Data ◽  
Significant Relationship ◽  
Commercial Banks ◽  
Banking Sector ◽  
Random Effect ◽  
Macroeconomic Factors ◽  
Customer Base ◽  
Panel Data Regression ◽  
Data Regression ◽  
Macroeconomic Determinants

This study investigated the profitability of the banking sector in Pakistan. It evaluated the effects of both internal (bank-specific) and external (macroeconomic) factors on bank’s profitability from 2006 to 2013 period. The data of 34 commercial banks operating in Pakistan has collected. The data was balanced panel data and analyzed by random effect panel data regression analysis. Results confirmed that bank size and non-interest income had positive significant relationship on banking profitability. Deposit had negative significant relationship with banking profitability because of maintaining high liquidity, which increased cost of holding asset that ultimately, decrease profitability. As major participant, banks of Pakistan banking sector were small size banks so most important factor out of significant factors were income from non-interest facilities provided by these commercial banks. By increasing such facilities increased the bank’s customer base, which ultimately increased bank’s profitability. Macro-economic factors showed no significant effect on bank’s profitability.

scholarly journals Bank Specific and Macroeconomic Determinants of Commercial Bank Performance in Bangladesh

2021 ◽  
Vol 10 (2) ◽  
pp. 115-130
Author(s):  
Shakila Zerin Bony
Keyword(s):  
Commercial Bank ◽  
Audit Committee ◽  
Positive Relationship ◽  
Banking Sector ◽  
Management Policy ◽  
Bank Performance ◽  
Macroeconomic Factors ◽  
Wide Range ◽  
The Government ◽  
Macroeconomic Determinants

The main purpose of this study is to examine the impacts of bank-specific and macroeconomic factors on the commercial bank performance measures (ROA, NIM, and ROE in this case) in Bangladesh. The study identifies bank-specific characteristics and macroeconomic determinants of performance in Bangladesh’s banking sector over the years 2009 to 2018. The study uses relevant data from a sample of 10 commercial banks in Bangladesh. The determinants are identified by using correlation and regression analysis. This finding serves as an indicator that the bank-specific and macroeconomic variables selected for this study provide a better description of ROA rather than net interest margin (NIM) and ROE. Among all the bank-specific determinants board size, audit committee meetings, and foreign ownership have a positive relationship with the bank’s performance. Specifically, inflation and GDP are observed to have a positive relationship with bank performance. The findings of this research can be of great help to a wide range of entities such as academicians, bankers, the government, students, and investors. This study can be helpful to bank management by providing valuable information thus assisting in the construction of efficient management policy decisions in order to ensure higher profits.

Developing inclusive and quality learning environments in HEIs

2019 ◽  
Vol 34 (5) ◽  
pp. 823-836 ◽  
Author(s):  
Seerat Gill ◽  
Gurparkash Singh
Keyword(s):  
Higher Education ◽  
Critical Issue ◽  
Wicked Problem ◽  
Content Type ◽  
Factors Affecting ◽  
Theoretical Paper ◽  
Specific Factors ◽  
Quality Learning ◽  
Quality Debate

PurposeThe purpose of this paper is to redefine quality in the context of “access” providing higher education institutions (HEIs), through a theoretical lens, in order to find solutions to the wicked problem of access vs quality and “inclusiveness vs excellence” debate in higher education (HE).Design/methodology/approachThis theoretical paper builds upon institutional theory and resource dependency theory to, first, analyse access vs quality debate and, second, provide answers to the undesirable and at times conflicting “trilemma” of scale, cost and quality in HEIs. To achieve the second objective, the paper offers a different perspective to address trilemma by proposing a synergistic coexistence between inclusiveness and excellence through “transformative” quality and learning theory.Findings“Transformative” quality uses reframing the problem, appraising culture and quality concepts, and eventually develops transformative interventions in access providing HEIs to improve their quality and enhance inclusiveness. Inclusiveness in HEIs needs to be addressed through the investigation of specific hypotheses, for which a closer examination of factors impacting the quality of access providing HEIs has been conducted. The goal is to facilitate a perfect mélange of inclusiveness and excellence in HE and, thus, create a new learning environment.Research limitations/implicationsThis paper contributes towards the access vs quality debate through transformative quality by developing transformative interventions and investigating factors affecting quality in HE.Practical implicationsThe contribution has several policy, managerial and governance implications. Addressing these implications will enable the promotion of the third mission of HE, that is, to develop graduates who meaningfully engage with the society and their profession.Originality/valueQuality and inclusiveness is a serious global problem requiring immediate attention and rigorous theory-informed frameworks. Through the investigation of specific factors and proposing meaningful interventions, this paper identifies the need to study a critical issue having global implications and investigates how it can be resolved.

scholarly journals NONPERFORMING LOANS AND FINANCIAL STABILITY – THE CASE OF SERBIA

2019 ◽  
pp. 349
Author(s):  
Velimir Lukić ◽  
Svetlana Popović ◽  
Irena Janković
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Eastern European ◽  
Nonperforming Loans ◽  
World Economic ◽  
Resolution Strategy ◽  
Credit Portfolio ◽  
Bounce Back ◽  
World Economic Crisis

This paper investigates resilience and stability of the Serbian banking sector in the light of deteriorated quality of its credit portfolio since the last world economic crisis. Nonperforming loans became a burning issue across Eastern European region. We used a set of indicators to appraise the magnitude of nonperforming loans’ burden to the banking sector’s soundness. Indicators verify that the Serbian banking sector was robust and solvent throughout crisis. Nonperforming loans were concentrated in nonfinancial corporations’ sector, while households sector performed much better, which influenced remedy measures undertaken. We carried out a comparison with peer countries and reviewed nonperforming loans resolution strategy implemented in Serbia. Our finding is that measures taken helped noticeably in reducing stock of nonperforming loans, with a caveat that reduction might have been too fast and too large so that bounce back effect cannot be excluded. Overall, financial stability has been preserved despite serious threats and without government financial aid. 

scholarly journals An Empirical Analysis of Impact of Macroeconomic Variables on Indian Stock Market

2019 ◽  
Vol 8 (3) ◽  
pp. 2033-2038
Keyword(s):  
Stock Market ◽  
Banking Sector ◽  
Research Work ◽  
Share Price ◽  
Macroeconomic Factors ◽  
Macroeconomic Variables ◽  
Repo Rate ◽  
Macroeconomic Determinants ◽  
Indian Stock Market ◽  
The Impact

This research paper, using monthly returns of macroeconomic variables, Nifty, and stock price from 3 sectors, examines the impact of macroeconomic determinants on Nifty and banking sector stocks from May 2009 to July 2018. The paper also analyses the granger cause between macroeconomic variables and Nifty; macroeconomic variables and Indian banking sector stocks. This paper also extends the research work in finding out the impact before and during Narendra Modi government. Johansen’s co-integration and granger causality tests were applied for this research work. The results of Johansen’s co-integration proved that there is a long relation between selected macroeconomic factors, i.e. bank rate, repo rate, and reverse repo rate, and Indian stock market and also on banking sector share price. There is granger cause before Modi Government and during Modi Government. It is concluded that, a positive significant relationship exists between macroeconomic determinants and Indian stock market.

scholarly journals Determinants of Capital Adequacy of Nigerian Banks

Market Forces ◽  
2020 ◽  
Vol 15 (1) ◽  
Author(s):  
Sanyaolu Wasiu Abiodun ◽  
Alao Adeniyi Abdul-Azeez ◽  
Yunusa Lateef Adewale
Keyword(s):  
Management Practices ◽  
Developing Economies ◽  
Banking System ◽  
Capital Adequacy ◽  
Data Set ◽  
Nonperforming Loans ◽  
Flow Of Funds ◽  
Economic Progress ◽  
The Stability ◽  
Macroeconomic Determinants

A reliable banking system in developing economies like Nigeria is vital for economic progress as it facilitates the flow of funds to productive investment sectors. The capital adequacy requirement of banks is a crucial feature of the stability of the banks globally. Because of its importance, we have examined the antecedents to capital adequacy. We have used the data set of ten leading banks of Nigeria from 2007 to 2017. Our results indicate that ROA and loan to total assets are significantly associated with capital adequacy. However, we found that nonperforming loans and size are negatively associated with the capital adequacy. Our results do not support the association between macroeconomics variables and capital adequacy. Therefore, we recommend that all banking entities should reserve sufficient cash and cash equivalents as a percentage of deposits and apply aggressive risk management practices to reduce the magnitude of nonperforming loans. This study was restricted to one country. Future studies can be carried out in other countries. A comparative data set of more than one country may bring further insight into the phenomenonKeywords: Capital adequacy ratio, banks-specific determinants, macroeconomic determinants, Nigeria.

scholarly journals Analyzing the Impact of Financial Services Authority (OJK) Regulations in Supporting Economy Recovery During Covid-19 Pandemic: Evidence from Indonesia

2021 ◽  
Vol SP (2) ◽  
Author(s):  
Evi Aryati Arbay ◽  
Lusita Astuti Nusantari
Keyword(s):  
Financial Services ◽  
Banking Sector ◽  
Economic Recovery ◽  
Financial Service Authority ◽  
National Economic ◽  
Keynesian Economic ◽  
The Stability ◽  
The Impact ◽  
Banking Credit

COVID-19 has disrupted economic growth and business conditions globally including in Indonesia. One of the most obvious impacts is in the banking sector as many bank debtors have lost their livelihoods. This situation affects the quality of bank assets and profitability. An increase of non-performing loans experienced by some national banks has decreased the capability to generate optimal profit from bank operations that normally would keep the banks healthy, liquid, solvent, and in a profitable state. To strengthen the stability of Indonesian financial services and support the national economic recovery effort, the Financial Services Authority (OJK) issued several regulations on macroprudential policy relaxation and stimulus provision. The regulations ensure that banks are capable to control the bad credit of the debtors affected by the COVID-19 pandemic. This study aims to analyze the impact of Financial Service Authority Regulations on the quality of banking credit in supporting the Indonesian economic recovery during the COVID-19 pandemic. This is a qualitative study using a critical thinking analysis method to prove the assumption of Keynesian economic theory, which state that in a recession expansionary fiscal policy can stimulate economic activity. The results of this study indicate that the Financial Services Authority regulations have shown an impact in supporting the Indonesian economy recovery efforts amid the COVID-19 pandemic, which can be seen through the stability of the financial system. Further empirical and quantitative studies are needed to confirm the study findings.

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