scholarly journals FORECASTING BANKS RETURN ON EQUITY USING LEADING ECONOMIC INDICATORS

2020 ◽  
Vol 21 (2) ◽  
pp. 460-468
Author(s):  
Daiva Jurevičienė ◽  
Darius Rauličkis
Keyword(s):  
Financial Markets ◽  
Commercial Banks ◽  
Theoretical Perspective ◽  
Economic Indicators ◽  
Practical Implementation ◽  
Short Term ◽  
General Group ◽  
New Approach ◽  
Return On Equity ◽  
Leading Economic Indicators

The research examines an approach to forecast return on equity using leading economic indicators for short periods in banks. ROE is one of the most important ratios for performance measurement. Its adequacy is necessary for competitiveness, attract funding in financial markets, accumulate reserve for future turbulences, secure compliance with supervisory requirements and maintain positive signals for the market. There is still a debate in the literature on factors of commercial banks’ profitability forecasting, techniques, and most appropriate models to improve the correctness of predicting and acquiring more accurate signals for communication on targets. The problems are still relevant from both a theoretical perspective and practical implementation. This research aims to prove the necessity to include leading economic indicators for short term ROE forecasting. It conducts investigations for the relevant studies, using regression analysis, necessary tests, ascertains opportunities and limitations of using these indicators and develops a conceptual model and its assessment major Baltic banks. The results show verification of approach to forecast ROE using leading economic indicators for short periods. Such study complements signalling theory with a new approach, how to predict and acquire signal not only using economic indicators as a general group but sub-group them into coinciding, lagging and leading.

scholarly journals Liquidity of commercial banks in Portugal and Spain

2021 ◽  
Vol 10 (1) ◽  
pp. 46-64
Author(s):  
Marco Amaral
Keyword(s):  
Financial Markets ◽  
Commercial Banks ◽  
Banking Sector ◽  
Balance Sheet ◽  
Annual Reports ◽  
Short Term ◽  
Liquidity Management ◽  
Banking Business ◽  
Critical Aspects

Liquidity is very important for the functioning of financial markets, especially for the banking sector, because one of the critical aspects in the banking business is precisely the process of transforming short-term funds and placing them in the medium and long term. This paper aims to comprehensively assess the liquidity positions of Portuguese and Spanish commercial banks through different liquidity ratios for the period from 2002 to 2015 and understand whether the liquidity management strategy differs by bank size. To this end, unconsolidated balance sheet data were used, which were obtained from the banks annual reports. The sample includes a significant part of the Portuguese and Spanish banking sector (not only by the number of banks, but also by the representation in banks total assets). The results obtained show that Spain's banks' liquidity indicator has decreased over the last four years. In contrast, bank liquidity indicator in Portugal varied slightly positively during the period 2002-2006 but decreased sharply between 2010 to 2015. Bank liquidity increased slightly during the period of the financial crisis in both countries, namely between from 2007 to 2009. Finally, it is concluded that smaller banks have less fluctuating liquidity management, i.e., large and medium-sized banks show greater variation in bank liquidity in the period under analysis, i.e., they are less liquid.

scholarly journals Necessity of the Establishment of a Financial Derivatives Market in Bangladesh

2014 ◽  
Vol 2 (1) ◽  
pp. 21-32
Author(s):  
Md. Habibur Rahman ◽  
Bijoy Chandra Das
Keyword(s):  
Interest Rate ◽  
Capital Structure ◽  
Financial Markets ◽  
Market Economy ◽  
Capital Market ◽  
Commercial Banks ◽  
Theoretical Framework ◽  
Financial Derivatives ◽  
Short Term ◽  
Equity Indices

Derivatives instruments have been a feature of modern financial markets for several decades. They play a pivotal role in managing the risk of underlying securities such as bonds, equity, equity indices, currency, and short-term interest rate asset or liability positions. With the development of Bangladesh’s market economy, it is now becomes very essential of the establishment of a financial derivatives market in this country. In our article is has been tried to explain in detail the theoretical framework of various types of derivatives and their potential usage in strengthening capital market, capital structure of commercial banks, against the fluctuation of major import(petroleum) and export(RMG) sectors, and thus turning Bangladesh’s economy into a strong global one. In the last part of our study, some strong recommendations with the suggestion of phase by phase establishment of a financial derivatives market are included.

scholarly journals Commercial Banks Performance in Ghana: Does Capital Structure Matter?

2017 ◽  
Vol 7 (1) ◽  
pp. 333 ◽  
Author(s):  
Ibrahim Nandom Yakubu ◽  
Mohammed Mubarik Alhassan ◽  
Abdul Azeez Mikhail ◽  
Abdul-Nasiru Iddrisu Alhassan
Keyword(s):  
Capital Structure ◽  
Commercial Banks ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
Short Term ◽  
Return On Equity ◽  
Total Debt ◽  
Total Capital ◽  
The Relationship

This study seeks to investigate the relationship between capital structure and commercial banks performance in Ghana. Using a panel data of listed commercial banks spanning from 2010-2015, the Ordinary Least Squares regression model is employed to estimate the functions relating to bank performance (measured by Return on Equity) with measures of capital structure. The findings show statistically significant relationship between commercial banks’ performance and all the capital structure measures (the ratios of short-term debt to total capital, long-term debt to total capital, and total debt to total capital). Whereas total debt and banks’ performance are positively correlated, short-term debt and long-term debt are inversely related to banks’ performance. In essence, using large proportion of debt significantly enhance commercial banks performance in Ghana.

scholarly journals ANALISIS HUBUNGAN JANGKA PANJANG DAN JANGKA PENDEK ANTARA NPL, ROE, SIZE DAN LOTA TERHADAP CAPITAL BUFFER

Performance ◽  
2017 ◽  
Vol 23 (1) ◽  
pp. 67
Author(s):  
Juni Purwanti ◽  
Suwaryo Suwaryo ◽  
Sudarto Sudarto
Keyword(s):  
Commercial Banks ◽  
Positive Influence ◽  
Short Term ◽  
Correction Model ◽  
Return On Equity ◽  
Negative Effect ◽  
Short And Long Term ◽  
Object Of Study ◽  
Positive Effect

This study aimed to analyze the effect of Non-Performing Loans, Return on Equity, bank size, and Loan to Total Assets of the capital buffer using panel data. The population in this study was State Owned Banks registered in Bank Indonesia for the period 2002 to 2014. In this study all the population used as an object of study and the type of data used in this research was quarterly data. Data were analyzed using cointegration test and Error Correction Model to demonstrate short and long term relationship. The results showed that in the short term, the Non Performing Loan and Return on Equity have a positive influence on equilibrium of capital buffers in goverment bank. Furthermore, the size of bank negatively affect the equilibrium of capital buffers in the short term. Besides the long-term relationship, the Non Performing Loan and Return on Equity also has a positive effect on the equilibrium of capital buffers in state-owned commercial banks. Meanwhile, Loan to Total Assets have a negative effect on the equilibrium of capital buffers in the long term.

Developing the methodology of early diagnosis of financial crises using a system of signaling economic indicators

2020 ◽  
Vol 13 (4) ◽  
pp. 362-382
Author(s):  
N.I. Yashina ◽  
O.I. Kashina ◽  
S.S. Petrov ◽  
N.N. Pronchatova-Rubtsova
Keyword(s):  
Financial Markets ◽  
Russian Federation ◽  
Financial Crises ◽  
Choice Model ◽  
Economic Indicators ◽  
Federal State ◽  
Practical Implementation ◽  
Econometric Modeling ◽  
Crisis Events ◽  
The Russian Federation

Subject. This article discusses new possibilities for diagnosing the state of the country's financial and economic system and monitoring the true signs of crisis phenomena. Objectives. The article aims to develop effective methods of diagnosing and predicting financial crises in Russia using a special system of economic indicators and digital analytical tools. Methods. For the study, we used the signaling approach, non-parametric and mathematical statistics, and econometric modeling. Results. The article proposes a developed methodology for diagnosing crisis events, and tested on the basis of a sample of official data of the Federal State Statistics Service, the Ministry of Finance of the Russian Federation, the Central Bank of the Russian Federation, and the exchange information of the world financial markets for 1998–2019. Conclusions. The study confirmed the prospects for using a signaling approach in combination with the binary choice model and econometric modeling methods to predict the onset of crisis events in the Russian economy. The proposed methodology for diagnosing financial market crises contributes to the development of scientific approaches to the analysis and forecasting of the price dynamics of financial markets and periods of their increased volatility. Its practical implementation provides information on emerging trends in financial and economic instability and assesses the likelihood of a financial crisis.

scholarly journals 3.3. Predicative modeling of current liquidity of a commercial bank based on multivariate correlation analysis

2020 ◽  
Author(s):  
Е.Г. Шершнева ◽  
Е.С. Алпатова ◽  
Ф.Р. Бабанова ◽  
Б.Б.-Х. Хасан
Keyword(s):  
Correlation Analysis ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Regression Modeling ◽  
Economic Indicators ◽  
Short Term ◽  
Financial Condition ◽  
Multivariate Correlation ◽  
Multivariate Correlation Analysis

Несмотря на то, что базовые экономические модели показывают свою жизнеспособность, прогрессивные информационные технологии требуют все более тонких инструментов воздействия на процессы регулирования денежных потоков в банковском секторе. Одним из таких инструментов традиционно выступает управление ликвидностью коммерческого банка. Вместе с тем, процессы управления ликвидностью сопровождаются кризисными явлениями и внутрибанковскими слабыми звеньями в коммуникациях и технологиях.В искомом ключе авторы предлагают методический подход по синхронизации целевых ориентиров и релевантных показателей деятельности банка на основе метода парных корреляций. Проанализированы факторы, влияющие на ликвидность современного банка с точки зрения тактических преференций. Обосновано заключение по применению политики рационального управления ликвидностью, включающей осмотрительное целеполагание, финансовое планирование и рисковую сдержанность. The article presents a study of dependence of short-term bank`s liquidity on a number of economic indicators based on correlation and regression modeling. It is established that the dynamics of current liquidity of banks is significantly influenced by such parameters as non-performant loans, short-term liabilities and equity. The proposed approach can be used by commercial banks` analysts in the development of models for assessing the financial condition.

Perspectives on inflation Targeting Regime in Russia

2014 ◽  
pp. 107-121 ◽  
Author(s):  
S. Andryushin
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Interest Rates ◽  
Inflation Targeting ◽  
Short Term ◽  
Indirect Control ◽  
Financial Account ◽  
Domestic Prices ◽  
Macroeconomic Indicators ◽  
Private And Public

The paper analyzes monetary policy of the Bank of Russia from 2008 to 2014. It presents the dynamics of macroeconomic indicators testifying to inability of the Bank of Russia to transit to inflation targeting regime. It is shown that the presence of short-term interest rates in the top borders of the percentage corridor does not allow to consider the key rate as a basic tool of monetary policy. The article justifies that stability of domestic prices is impossible with-out exchange rate stability. It is proved that to decrease excessive volatility on national consumer and financial markets it is reasonable to apply a policy of managing financial account, actively using for this purpose direct and indirect control tools for the cross-border flows of the private and public capital.

The performance of Islamic banking among the commercial banks in Malaysia

2008 ◽  
Vol 5 (1) ◽  
pp. 59
Author(s):  
Samsuwatd Zuha Mohd Abbas ◽  
Norli Ali ◽  
Aminah Mohd Abbas
Keyword(s):  
Commercial Banks ◽  
Positive Impact ◽  
Bank Performance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Return On Assets ◽  
Return On Equity ◽  
Accounting Performance ◽  
Significant Difference ◽  
The Mean

This paper examines the accounting performance of the Islamic banking among (??) commercial banks in Malaysia. A total of 18 commercial banks which include 4 Islamic banks are selected as samples covering the period of 2000 - 2006. Accounting performance is measured by the return on assets (ROA) and return on equity (ROE). The objective of the study is (1) to determine whether Islamic banking performance is at par with the conventional banking and (2) to investigate whether the type (Islamic or conventional bank) and age of bank influence the performance. Result of the independence t-test of the study shows that there is no significant difference in the performance of the Islamic and the conventional banking in Malaysia although the mean score for conventional banking is higher. The regression results show that the age of banks has a positive impact on the bank performance where as none of the types of banks influence performance.

Impact of FII’s and FDI’s on Indian Stock Market

2016 ◽  
Vol 1 (1) ◽  
Author(s):  
Dr. Kamlesh Kumar Shukla
Keyword(s):  
Stock Market ◽  
Financial Markets ◽  
Global Economy ◽  
Short Term ◽  
Earnings Growth ◽  
The Past ◽  
Bull Market ◽  
Indian Stock Market

FIIs are companies registered outside India. In the past four years there has been more than $41 trillion worth of FII funds invested in India. This has been one of the major reasons on the bull market witnessing unprecedented growth with the BSE Sensex rising 221% in absolute terms in this span. The present downfall of the market too is influenced as these FIIs are taking out some of their invested money. Though there is a lot of value in this market and fundamentally there is a lot of upside in it. For long-term value investors, there’s little because for worry but short term traders are adversely getting affected by the role of FIIs are playing at the present. Investors should not panic and should remain invested in sectors where underlying earnings growth has little to do with financial markets or global economy.

Measuring the Efficiency of Business through Cash Management A Study on Consumer Durable Sector

2015 ◽  
Vol 4 (1) ◽  
Author(s):  
Somnath Das
Keyword(s):  
Commercial Banks ◽  
Cash Management ◽  
Short Term ◽  
Bank Account ◽  
Important Concept ◽  
Consumer Durable

Over the years cash has played a very important role in business, specifically a new one. Cash is the life-blood of every business. Cash may be the liquid currency as well as bank account balances held at different commercial banks. Therefore, cash management is the art as well as the science of managing a companys short-term resources for its ongoing activities, mobilising funds and optimising liquidity. In this contest another important concept which is related with the cash management is the treasury technique which emphasizes the liquidity by different factors and processes which convert immediately into cash for increasing

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