scholarly journals Analysis of the Relationship between Credit Risk and Bank Performance of Some Commercial Banks in Ghana

2020 ◽  
Vol 8 (2) ◽  
pp. 34-51
Author(s):  
Joseph Acquah ◽  
Yusif Arthur ◽  
Damianus Kofi Owusu
Keyword(s):  
Credit Risk ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Quantitative Research ◽  
Banking Sector ◽  
Sampling Technique ◽  
Capital Adequacy ◽  
Research Approach ◽  
Independent Entity ◽  
The Relationship

This study analysed the relationship between credit risk and bank financial performance of selected commercial banks in Ghana for the period 2010 - 2014, using the banks respective financial statements. The study employed the quantitative research approach. The sample was Ghana Commercial Bank Limited, Zenith Bank Limited, UT Bank and Ecobank Plc. These four banks were selected using stratified random sampling technique. The data were primarily secondary and quantitative in nature. Both descriptive and inferential statistics were used to analyse the data. When the banks were compared, Ghana Commercial Bank Limited was found to be more liquid than Zenith Bank Limited. That of Zenith bank was also higher than UT bank and Ecobank Plc .However, profitability indicators showed that Zenith Bank Limited and Ecobank Plc utilised its assets better than Ghana Commercial Bank Limited and UT bank resulting in the two banks higher scores over the period. The findings show further that Ghana Commercial Bank Limited showed higher ratios for investment in the future while Zenith Bank Limited showed higher ratios of higher dividend immediately. However, Zenith Bank Limited capital adequacy level was far higher than the legal requirement of Banking sector while its counterparts fell slightly below it in terms of average. Based on the main findings and conclusions, it is recommended that Ghana Commercial Bank Limited should find a means of reducing its expenditure, introducing prudent assets management, should be cautious when assisting government in time of economic difficulty, and operate as an independent entity.

scholarly journals THE INFLUENCE OF THIRD-PARTY FUNDS, NON-PERFORMING LOANS (NPL) ON CREDIT DISTRIBUTION WITH PROFITABILITY AS INTERVENING VARIABLE IN COMMERCIAL BANKS

2020 ◽  
Vol 4 (02) ◽  
Author(s):  
Sri Hermuningsih ◽  
Pristin Prima Sari ◽  
Anisya Dewi Rahmawati
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Quantitative Research ◽  
Sampling Technique ◽  
Bank Lending ◽  
Third Party ◽  
Internal Factors ◽  
Negative Effect ◽  
The Government ◽  
The Relationship

Banks are financial institutions that collect and distribute funds in the forms of deposits such as savings, deposits, current accounts, etc. from and for people who need funds for various needs, such as for consumption, working capital or business capital, housing and investment. In addition, banks must help the community to improve their living standards by distributing funds or giving credit to people who need funds. This is in accordance with the function of the bank itself, namely the bank as the distributor of funds. The purpose of this research is to examine and obtain evidence about factors that influence loan distribution at a bank. Internal factors that influence loan distribution are Third Party Funds, Non-Performing Loans, and Profitability. Efforts to increase credit at banks require optimal efforts to raise third-party funds, good credit management, and capital strengthening. This type of research is quantitative research with purposive sampling technique. The population used in this study is commercial banks from 2013 to 2017. The data come from commercial bank financial statements. As the benefit of this research the government can use it as a mapping material for distributing loan to commercial banks; the bank management can take it into consideration in making commercial bank lending policies. The results of the research show that profitability can mediate the relationship between third party funds and non-performing loans on loan distribution. Third party funds have a significant positive effect on loan distribution. Non-Performing Loans have a significant negative effect on loan distribution. Keywords: LOAN DISTRIBUTION, THIRD PARTY FUNDS, NON-PERFORMING LOANS, AND PROFITABILITY

scholarly journals Factors Influencing Non-Performing Loans in Commercial Banks: The Case of Banks in Selangor

2017 ◽  
Vol 12 (2) ◽  
pp. 246
Author(s):  
Uma Murthy ◽  
Naail Mohammed Kamil ◽  
Paul Anthony Mariadas ◽  
Dilashenyi Devi
Keyword(s):  
Interest Rate ◽  
Commercial Banks ◽  
Quantitative Research ◽  
Balance Sheet ◽  
Banking System ◽  
Sampling Technique ◽  
Research Approach ◽  
Probabilistic Sampling ◽  
Factors Influencing ◽  
Descriptive Approach

Non-performing loans (NPL) is a worldwide issue that affects financial markets stability in general and banking industry viability in particular. The net non-performing loan (NPL) ratio in the banking system since the Asian financial crisis has gradually been in decline from 13.6% in December 1998 to 2.8% in May 2008. Government intervention to non-performing loan recovery strategies have contributed significantly in the decline. The Malaysian government and banks have succeeded in removing the non-performing loans (NPL) from banks Balance Sheet. This study examines the factors influencing non-performing loans in commercial banks in Selangor. A quantitative research approach is employed in this research following the positivist assumption with a realist ontology and objectivist epistemology. Data was collected using a probabilistic sampling method, particularly a stratified random sampling technique. The adapted survey questionnaire employed in this study and distributed 150 questionnaires and successfully received 130 questionnaires. Overall, the researcher has discussed about the findings of the analysis that was conucted using the SPSS software. Descriptive approach, correlation and multiple regression analysiss had been shown during the analysis. The descriptive approach displayed direct  results while  the correlation displayed the relationship between the dependent variable (non-performing loan) and the independent variables (standard of living, consumer income, economy of the country, bank interest rate). In this research, found three factors that influencing non-performing loan in Malaysia which are consumers’ income, the economy of the country and bank interest rate. The bank will found that the bank interest rate affect the rate of non-performing loan increase. For the future researchers, this research will benefit them as well. If they are doing their researches which are related to this topic, they can gather everything they want easily. Besides that, it will benefit the researcher who is going to do this research study in Malaysia. This is because the information in Malaysia is limited.

scholarly journals Internal Determinants of Commercial Bank Profitability In Indonesia

2017 ◽  
Vol 8 (3) ◽  
pp. 219-223 ◽  
Author(s):  
Umi Widyastuti ◽  
Purwana E.S. Dedi ◽  
Sri Zulaihati
Keyword(s):  
Credit Risk ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Least Squares Method ◽  
Ordinary Least Squares ◽  
Capital Adequacy ◽  
Operating Efficiency ◽  
Bank Profitability ◽  
Operating Income ◽  
Net Interest Margin

Abstract Internal determinants of bank profitability can be defined as those factors that are influenced by the bank’s management decisions and policy objectives. This paper is aimed to examine the internal factors that impact on commercial banks profitability in Indonesia. The factors reviewed in the model namely capital adequacy, credit risk (non-performing loan), liquidity (loans to deposit ratio), net interest margin and operating efficiency (operating expenses to operating income ratio). Using purposive sampling method, the analysis used thirty three commercial banks, with 168 observations for the period 2010 to 2015. Based on the Chow-test, the common effect model was preferred. The model is estimated using Ordinary Least Squares method. The results revealed that two hypotheses were not be accepted. There are no significant effects of capital adequacy and credit risk on profitability, but the model explains that there are significant effects of all explanatory variables toward commercial bank profitability. However, other important internal determinants of bank profitability still have not included in the model of this paper.

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 Risks Of Sharia Commercial Bank In Indonesia: Analysis Of Internal And External Factors

2019 ◽  
Vol 1 (1) ◽  
pp. 81-94
Author(s):  
Erlinda Kurnia Aufa ◽  
Cita Sary Dja'akum
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Fixed Effects ◽  
External Factors ◽  
Capital Adequacy ◽  
Research Approach ◽  
Fixed Effects Model ◽  
Significant Negative Effect ◽  
Negative Effect ◽  
Internal And External Factors

Purpose - This study aims to analyze the effect of inflation, gross domestic product (GDP), capital adequacy ratio (CAR), and financing to deposit ratio (FDR) to non performing financing (NPF) at Islamic Commercial Banks in Indonesia.Method - The research approach used is a quantitative approach. Determination of samples is done by purposive sampling method. The data used is secondary data, obtained from publication reports on the official website of each Sharia Commercial Bank, Bank Indonesia, and the Central Statistics Agency. The population in this study were all Islamic Commercial Banks registered in the Statistics of Islamic Banking in Indonesia for the period 2013-2017. Based on the specified criteria, five Sharia Commercial Banks were obtained as research samples. This study uses panel data regression analysis with the Fixed Effects Model approach which is processed through the Eviews 10 program.Result - The results of hypothesis testing show that partially Inflation has a positive but not significant effect on NPF, GDP has a significant negative effect on NPF, CAR has a negative but not significant effect on NPF, and FDR has a significant negative effect on NPF. Simultaneously inflation, GDP, CAR, and FDR have a significant effect on NPF.Implication - This study uses all data from commercial Islamic bank.Originality - This study analyzes the determining factors that influence financing risks from both internal and external factors.

scholarly journals HUBUNGAN ANTARA ADVERSITY QUOTIENT DENGAN INTENSI BERWIRAUSAHA PADA MAHASISWA UNIVERSITAS JAMBI

2020 ◽  
Vol 6 (2) ◽  
pp. 102-113
Author(s):  
Muhammad Ilham
Keyword(s):  
Quantitative Research ◽  
Sampling Technique ◽  
Entrepreneurial Intention ◽  
Coefficient Of Determination ◽  
Correlation Technique ◽  
Research Approach ◽  
Positive Direction ◽  
Correlational Research ◽  
The University ◽  
The Relationship

  This study aimed to determine the relationship between adversity quotient with entrepreneural intention in student of Jambi University. This study used a quantitative research method with a correlational research approach. Sampling used Accidental sampling technique. This research was conducted at the University of Jambi. The subjects used in this study were 110 student of Jambi University. This study used the scale of adversity quotient and entrepreneurial intention, and the analytical method used is the Pearson's Product Moment correlation technique. This study shows there is a significant positive relationship between the two variables. The contribution to the value of the correlation coefficient (r) is 0.516 with p equal to 0.001 (p <0.05). The coefficient of determination (R2) in this study, adversity quotient contributed as much as 26.6% to the intention of entrepreneurship, while 73.4% of the others were contributions from other factors that were not the focus of this study.This variable correlation has a positive direction indicating the higher the adversity quotient, the higher the intention of entrepreneurship will be. Student who have been known to have adversity uotient and high entrepreuneral intention, can be directed and facilitated by the university to take part in entrepeuneral programs. Keywords: adversity quotient, entrepreneurial intention

scholarly journals DETERMINING THE PERFORMANCE OF SHARIA COMMERCIAL BANKS WITH MODERATION OF NON PERFORMING FINANCING RATIO IN INDONESIA

Riset ◽  
2021 ◽  
Vol 3 (2) ◽  
pp. 563-580
Author(s):  
Novan Wahyu Hidayat ◽  
Amalia Kusuma Wardini ◽  
Lela Nurlela Wati
Keyword(s):  
Financial Services ◽  
Commercial Banks ◽  
Quantitative Research ◽  
Secondary Data ◽  
Sampling Technique ◽  
Capital Adequacy ◽  
Previous Period ◽  
Capital Adequacy Ratio ◽  
Operating Margin ◽  
Positive Effect

The research objectives to be achieved are: (1) To analyze and reveal empirically whether the Capital Adequacy Ratio (CAR), OE, Financing to Deposit Ratio (FDR), Net Operating Margin (NOM) affects the performance of Islamic Commercial Banks as measured by the ratio ROA). (2) To determine and analyze whether the non-performing loan ratio (NPF) moderates the effect of Capital Adequacy Ratio (CAR), OE, Financing to Deposit Ratio (FDR), and Net Operating Margin (NOM) on the performance of Islamic Commercial Banks (Return On Assets). This type of research is a quantitative research. The population used in this study is a Islamic commercial banks registered with the Financial Services Authority consisting of 14 BUS from 2015-2019. The data used is secondary data and uses saturated sampling method. Researchers used this sampling technique because the total population of 14 Islamic commercial banks companies in Indonesia are registered with the Financial Services Authority (OJK). Analysis of research data using Moderating Regression Analysis. Simultaneously CAR, OE, FDR and NOM have a positive effect on BUS performance for the 2015-2019 period as measured by ROA, but the partial results are only CAR that has a positive effect on ROA while OE, FDR and NOM have a negative effect on ROA, this happens because The capital adequacy held in the current period in lending is currently decreasing when compared to the previous period so that it has an impact on decreasing income and profit for the next period. Simultaneously, NPF moderates CAR, OE, FDR and NOM have a positive effect on BUS performance for the 2015-2019 period as measured by ROA, while the partial results are only NPF which has an impact on reducing the effect of CAR on ROA, while other variables when NPF moderate the relationship with ROA moves towards improvement. This is because the capital adequacy ratio is currently used in handling the current bad credit ratio as a result of loans extended in the previous period so that the current capital that should be used to generate profits in the next period through an increase in the volume of credit at this time from the previous period is reduced so that an impact on the decline in Islamic commercial banks profitability in the next period. As for what makes the difference in this study is the moderation of NPF on the effect of CAR, BOPO, FDR and NOM on ROA.

scholarly journals The Effects Of Ownership Structure And Listed Status On Bank Risk In China

2013 ◽  
Vol 29 (3) ◽  
pp. 695 ◽  
Author(s):  
Maoyong Cheng ◽  
Hong Zhao ◽  
Junrui Zhang
Keyword(s):  
Regression Analysis ◽  
Credit Risk ◽  
Ownership Structure ◽  
Commercial Banks ◽  
Capital Adequacy ◽  
Bank Risk ◽  
Capital Adequacy Ratio ◽  
Asset Quality ◽  
Relationship Of ◽  
The Relationship

This paper investigates the relationship of ownership structure, listed status and risk by using regression analysis based on the relevant data of Chinas commercial banks. Three main results emerge. First, compared to the state-owned banks, foreign-owned commercial banks exhibit better asset quality, lower credit risk and higher capital adequacy ratio; city commercial banks have lower credit risk and joint-stock commercial banks have lower credit risk and capital adequacy ratio. Second, listed status improves the asset quality and capital adequacy ratio. Finally, we also find that the listed status significantly moderates the relationship between ownership structure and risk. In conclusion, this study provides a theoretical reference for the reform of Chinas commercial banks.

scholarly journals Risks Of Sharia Commercial Bank In Indonesia: Analysis Of Internal And External Factors

2019 ◽  
Vol 1 (1) ◽  
pp. 81
Author(s):  
Erlinda Kurnia Aufa ◽  
Cita Sary Dja'akum
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Fixed Effects ◽  
External Factors ◽  
Capital Adequacy ◽  
Research Approach ◽  
Fixed Effects Model ◽  
Significant Negative Effect ◽  
Negative Effect ◽  
Internal And External Factors

<p class="IABSSS"><strong>Purpose</strong> - This study aims to analyze the effect of inflation, gross domestic product (GDP), capital adequacy ratio (CAR), and financing to deposit ratio (FDR) to non performing financing (NPF) at Islamic Commercial Banks in Indonesia.</p><p class="IABSSS"><strong>Method</strong><strong> </strong>- The research approach used is a quantitative approach. Determination of samples is done by purposive sampling method. The data used is secondary data, obtained from publication reports on the official website of each Sharia Commercial Bank, Bank Indonesia, and the Central Statistics Agency. The population in this study were all Islamic Commercial Banks registered in the Statistics of Islamic Banking in Indonesia for the period 2013-2017. Based on the specified criteria, five Sharia Commercial Banks were obtained as research samples. This study uses panel data regression analysis with the Fixed Effects Model approach which is processed through the Eviews 10 program.</p><p class="IABSSS"><strong>Result</strong><strong> </strong>- The results of hypothesis testing show that partially Inflation has a positive but not significant effect on NPF, GDP has a significant negative effect on NPF, CAR has a negative but not significant effect on NPF, and FDR has a significant negative effect on NPF. Simultaneously inflation, GDP, CAR, and FDR have a significant effect on NPF.</p><p class="IABSSS"><strong>Implication</strong> - This study uses all data from commercial Islamic bank.</p><strong>Originality</strong> - This study analyzes the determining factors that influence financing risks from both internal and external factors.

scholarly journals Credit Risk Assessments and Firm Value of Listed Commercial Banks in Kenya

2021 ◽  
pp. 68-82
Author(s):  
Mohamed Maalim Issackow ◽  
Felix Mwambia ◽  
Wilson Muema
Keyword(s):  
Credit Risk ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Firm Value ◽  
Equity Capital ◽  
Capital Adequacy ◽  
Risk Assessments ◽  
Asset Quality ◽  
The Impact ◽  
Positive Effect

Despite the various control measures put in place especially the CBK’s prudential laws to ensure that the performance of commercial banks in Kenya is ensured, most commercial banks have been collapsing in the recent past. It is in this light that the current study sought to ascertain the impact of bank liquidity, capital adequacy, asset quality and earnings on the firm value of listed Commercial banks in Kenya. Descriptive research design was employed on a population sample of eleven publicly listed retail banks. Secondary data was collected from CBK and other public financial reports over the 12-year period from 2009 to 2020. The collected data was analysed using1a multivariate panel regression1model to generate the relevant regression tests. The1study established that the capital adequacy has a marginal positive impact on the firm value while earning ability was found to have a statically insignificant positive effect on firm value among Kenyan commercial bank. The study findings indicated that liquidity was insignificantly and negatively correlated with firm value as asset quality had insignificant positive effect on firm value among Kenyan commercial bank. The study recommends that, managers of listed banks should embrace utilization of internally generated equity capital to ultimately promotes credit risk assessments as they maintain optimal levels of liquidity to maximize firm value and maintain high quality of assets as they sustained levels of earnings that boost output. This paper explained a credit risk rating concept that had not been examined in Kenya before.

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