Analyzing the Efficiency of European Banks

2014 ◽  
pp. 28-55
Author(s):  
Mehmet Hasan Eken ◽  
Suleyman Kale ◽  
Huseyin Selimler
Keyword(s):  
Commercial Banks ◽  
Data Envelopment ◽  
Return On Assets ◽  
Return On Equity ◽  
Developed Economies ◽  
Risk Increase ◽  
Net Interest Margin ◽  
European Banks ◽  
And Performance ◽  
Profitability Ratios

Basic financial and profitability ratios such as net interest margin, return on assets, and return on equity alone do not measure bank performances effectively as they lack the risks associated. Since the success of banks in managing performance is expected to be largely dependent on the correct pricing and management of risks, a proper measurement of efficiency should include the effects of risks. The purpose of this study is to benchmark risk profiles of European commercial banks and performance indicators during the 2006-2009. The research is implemented based on four models by Data Envelopment Analysis with data of 697 banks from 37 countries. The results suggest that there is an extensive inter- and intra-country risk efficiency of banks. Profitability increase is not always directly proportional to risk increase, and the financial crisis substantially decreased the risk efficiency of banks, especially in 2008 in developed economies.

Analyzing the Efficiency of European Banks

2014 ◽  
pp. 1151-1178
Author(s):  
Mehmet Hasan Eken ◽  
Suleyman Kale ◽  
Huseyin Selimler
Keyword(s):  
Commercial Banks ◽  
Data Envelopment ◽  
Return On Assets ◽  
Return On Equity ◽  
Developed Economies ◽  
Risk Increase ◽  
Net Interest Margin ◽  
European Banks ◽  
And Performance ◽  
Profitability Ratios

Basic financial and profitability ratios such as net interest margin, return on assets, and return on equity alone do not measure bank performances effectively as they lack the risks associated. Since the success of banks in managing performance is expected to be largely dependent on the correct pricing and management of risks, a proper measurement of efficiency should include the effects of risks. The purpose of this study is to benchmark risk profiles of European commercial banks and performance indicators during the 2006-2009. The research is implemented based on four models by Data Envelopment Analysis with data of 697 banks from 37 countries. The results suggest that there is an extensive inter- and intra-country risk efficiency of banks. Profitability increase is not always directly proportional to risk increase, and the financial crisis substantially decreased the risk efficiency of banks, especially in 2008 in developed economies.

Assecs the Efficiency of Operational Risk Management in Russian Banks

2020 ◽  
Vol 17 (2) ◽  
pp. 102-119
Author(s):  
Jalal H. Abu-Alrop
Keyword(s):  
Risk Management ◽  
Data Envelopment Analysis ◽  
Commercial Banks ◽  
Operational Risk ◽  
Data Envelopment ◽  
Return On Assets ◽  
Return On Equity ◽  
Operational Risk Management ◽  
Net Interest Margin ◽  
Indicator Approach

This study examines the efficiency of operational risk management of 85 Russian commercial banks during the period 2008—2017. This study uses data envelopment analysis (DEA) with financial ratios to assess the efficiency of operational risk management. The study adopts the basic indicator approach (BIA) to measuring operational risk. Also, the study adopts net interest margin (NIM), return on assets (ROA), and return on equity (ROE) for measuring banks performance. The study found that the small banks were the most effective in managing operational risk, while large banks were more efficient than medium banks.

Determinants of Commercial Banks Profitability: Empirical Evidence from Pakistan

2014 ◽  
Vol 1 (1) ◽  
pp. 1 ◽  
Author(s):  
Waqas Tariq ◽  
Muhammad Usman ◽  
Haseeb Zahid Mir ◽  
Inam Aman ◽  
Imran Ali
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Huge Amount ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Time Period ◽  
Direct Association ◽  
Gross Income ◽  
And Performance ◽  
Comparative Measure

As profitability is a comparative measure that describes the associations of total amount of profit with different factors. Thisstudy examines the influence of commercial banks determinants on the performance of commercial banks in Pakistan over the time period from 2004-2010. Consistency in performance is the basic reason for smooth running and presence of every financial institution.Profitability is the most significant and consistent indicator as it contributes huge amount of profitthat ultimately impacts its performance positively. The commercial bank’s profitability is found out by the return on equity (ROE) and net-interest margin(NIM). Result indicates that the capital strength of a bank is utmost significance in affecting its performance, as a well-capitalized bank is observed to be less risky and such edge lead to high profitability. The assets quality, measured by the loans loss provisions, affects the performance of the banks positively and bank size as deposit indicates direct association with profitability as large banks earn more profit instead of small banks. Inflation and NIGI affects the bank’s profitability inversely as increase inflation affects banks cost that increased and its earning main source is its fee that it charge on its services but free services without any charges decrease in gross income that lead a reduction in profit. This study is important and worthwhile for all commercial banks mangers regarding performance decisions of banks. As the development of the banking sector depends profoundly on strong decision making that leads to the efficiency and performance

scholarly journals PERFORMANCE MEASUREMENT, GROWTH AND STRUCTURE OF COMMERCIAL BANKS IN EAST AFRICA

2017 ◽  
Vol 1 (5) ◽  
pp. 63
Author(s):  
Dr. Rutto Peter Ketyenya
Keyword(s):  
Performance Measurement ◽  
East Africa ◽  
Commercial Banks ◽  
Secondary Data ◽  
Financial Structure ◽  
Return On Assets ◽  
Policy Makers ◽  
For Profit ◽  
Net Interest Margin ◽  
And Performance

Purpose: The purpose of this study was to analyze Performance Measurement, Growth and Structure of Commercial Banks in East AfricaMethodology: The study used cross country data analysis of 100 commercial banks and collected secondary data from annual published audited financial statements for the period 1997-2011Results: The results indicate that the OPM which combines productivity and profitability captured a high percentage of similar banks when the top 20 commercial banks were ranked; 80% for return on assets, 60% for profit margin and 55% for net interest margin. A positive and significant relationship between economic growth and performance measures was confirmed. Similarly market structure had a positive relationship with the performance. The results further showed an insignificant relationship with financial structure which conforms to the financial structure theory.Policy recommendation: The study recommended that the OPM should enable central banks to assess the performance levels of banks and be able to detect those that are underperforming and take corrective measures to either improve productivity, profitability or both. For policy makers in the EAC secretariat, the measure will enable comparison on the performance of banks in East Africa for subsequent integration to the monetary union

scholarly journals Effects of E-Banking Adoption on the Financial Performance of State-Owned Commercial Banks in Bangladesh

2021 ◽  
Vol 34 (4) ◽  
pp. 1-20
Author(s):  
Md. Imran Hossain
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Negative Impact ◽  
Positive Impact ◽  
Least Square ◽  
Return On Assets ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Adoption And Implementation ◽  
Significant Negative Impact

This study examines the relationship between e-banking adoption and the financial performance of state-owned commercial banks in Bangladesh. The pooled ordinary least square (OLS) estimate was applied to analyze the panel data of the sample banks. The empirical findings reveal that e-banking adoption and implementation has a significant negative impact on banks' profitability in terms of return on assets, return on equity, and net interest margin in the year of adoption. However, the result also shows that e-banking has a significant positive impact on return on assets in the year following adoption.

scholarly journals Bank Efficiency And Financial Ratios: Rating The Performance Of The Four Largest South African Banks

2013 ◽  
Vol 30 (1) ◽  
pp. 93 ◽  
Author(s):  
Gerhardus Van der Westhuizen
Keyword(s):  
South African ◽  
Financial Statements ◽  
Performance Measure ◽  
Financial Ratios ◽  
Data Envelopment ◽  
Return On Assets ◽  
Bank Efficiency ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Two Sides

Data Envelopment Analysis (DEA) in conjunction with financial ratios is used to estimate and compare the performance of the four largest South African banks over the period 2001 to 2011. DEA is used to estimate the relative technical, allocative, cost and scale efficiencies and compare these estimates to certain financial ratios published by the banks in their financial statements. These ratios include return on equity (ROE), return on assets (ROA), net interest margin (NIM), impairment losses, etc. The results obtained from the efficiency estimates and the financial ratios are used to rate the banks according to these performances. The rating differs depending on which performance measure is applied. A combination of these measures was necessary to determine the best and the worst performing bank. From the results obtained it appears that profitability and efficiency are two sides of the same coin.

scholarly journals COMMERCIAL BANKING PERFORMANCE AND ECONOMIC GRPWTH: THE CASE OF TUNISIA BETWEEN 19902018

2020 ◽  
Vol 4 (01) ◽  
Author(s):  
Imet Mtir ◽  
Nizar Ben Abdallah
Keyword(s):  
Commercial Banks ◽  
Parametric Method ◽  
Commercial Banking ◽  
Data Envelopment ◽  
Subprime Crisis ◽  
Return On Assets ◽  
Return On Equity ◽  
The One ◽  
The Impact

In this paper, we propose to assess the efficiency scoretechniques of 10 Tunisian commercial banks for the period cover 1990 to 2018. The local banking landscape was marked, during the period studied, by significant changes following the adoption by the Tunisian government, of various financial liberalization measures as well as the period of the subprime crisis and then the revolution of 2011. Given studying the technical efficiency levels achieved by Tunisian commercial banks, we propose a non-parametric method, the approach DEA, data envelopment analysis, on the one hand, and the determination of the variables explaining the level of performance on the other. Our results allow us to conclude that the banks which obtained the best average efficiency scores are: Amen Bank (100%) and Arab Tunisian Bank (98.9%). Whereas, other banks are considered inefficient. To study the impact of banking performance indicators, a variable that measures the crisis, Equity, total assets, and total liabilities on the efficiency scores calculated by the DEA methodology, return on assets (ROA) and return on equity (ROE), we used an ECM error correction model in panel data. The results show the positive impacts of these indicators on banking performance in Tunisia.

Kinerja Rasio Keuangan Perbankan Islam Dan Konvensional: Studi Komparatif

Liquidity ◽  
2018 ◽  
Vol 2 (1) ◽  
pp. 13-20
Author(s):  
Amrizal Amrizal
Keyword(s):  
Annual Report ◽  
Capital Adequacy ◽  
Average Increase ◽  
Return On Assets ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
Interest Margin

The article focuses to analyze finance ratio consist of Return on Assets (ROA), Return on Equity (ROE), Net Interest Margin (NIM) Capital Adequacy Ratio (CAR) except Earnings before Interest Tax (EBIT). The research is conducted to three conventional banking (BNI 46, Mandiri and BRI) and three syariah banking (Bank Muamalat Indonesia, Bank Mega Syaria and Bank Syariah Mandiri) for annual report periods 2007 to 2011. The result shows, the average increase EBIT to conventional banking groups during period 2007 to 2011 are 1.91% while the average EBIT to syariah banking groups are 1.53%. The average of ROA to conventional banking groups are 3.01% while the average ROA to syariah banking groups are 1.99%. The average of ROE to conventional banking groups is 24.19% while the average of ROE to syariah banking groups is 33.31%. The average of NIM to conventional banking groups during period 2007 to 2011 are 7.08% while the average of NIM to syariah banking groups during period 2007 to 2011 are 8.14%. The average of CAR to conventional banking groups is 15.63%, while the average of CAR to syariah banking groups during the period are 12.19%.

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.

The Determinants of Banking Stability: The Example of Tunisia

2021 ◽  
Vol 8 (1) ◽  
pp. 01-10
Author(s):  
Jamel Eddine Mkadmi ◽  
Najwa Baccari ◽  
Adel Ncib
Keyword(s):  
Gross Domestic Product ◽  
Earnings Management ◽  
Debt Ratio ◽  
Z Score ◽  
Return On Assets ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Banking Stability ◽  
The Stability ◽  
Corporate Social

This paper try to study the factors of the stability of Tunisian banks from a sample made up of 7 Tunisian banks listed during the period 2005-2014. The important determinants used to explain the stability of the banks are: the z-score and the capitalization ratio. The results revealed, firstly, that the profitability variables such as: return on assets (ROA) has a positive and significant impact on the stability of banks and return on equity (ROE) has a negative and significant effect. Besides, bank-specific variables such as: the net interest margin (NIM), the non-interest income (NII), the age and the size of the bank affect positively and not significantly the banking stability. But the debt ratio (END) has a negative and significant impact on banking stability. Finally, gross domestic product (GDP) affects positively and not significantly on banking stability. This paper investigates the connection between earnings management and corporate social.

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