scholarly journals Board of Directors Decisions And Performance of Deposit Money Banks: An Analytical Approach

2021 ◽  
Vol 04 (04) ◽  
Author(s):  
Ades George ◽  
Keyword(s):  
Central Bank ◽  
Credit Risk ◽  
Board Of Directors ◽  
Analytical Approach ◽  
Share Capital ◽  
Return On Equity ◽  
Long Run ◽  
Short Run ◽  
And Performance ◽  
Ordinary Share

The study examines the relationship between Board of Directors Decisions and Performance of Deposit Money Banks: An analytical approach in Nigeria for the period 1990–2018. The study measured Ordinary share capital, Debenture, Investment in subsidiaries, and Loans /advances as proxies for Board of Directors decisions while Return on Equity was used as proxies for Performance of deposit money banks for the said periods under review. In the course of the study, data were obtained from the website of Central Bank Statistical bulletin and annual report of Nigerian Deposit Insurance Corporation (NDIC). The Augmented Dickey Fuller (ADF) test option was used to test for unit root. The ARDL and Bounds test were used to estimate the short and long run relationships. This study found that at short run, the board of director’s decisions on financing and investment decisions has positive relationship with return on equity, but are not significant predictors of return on equity. However, at long run the director’s decisions on financing options i.e. ordinary share capital and debenture, investment in subsidiaries and granting of loans have a long run relationship with return on equity of deposit money banks in Nigeria for the period 1990-2018. Strong credit risk administration/procedures should be religiously followed especially (know your customer) and complied with by credit risk managers in all deposit money banks in Nigeria. Ordinary share capital should be a source of financing at the short run. These were some of the recommendations proffered, to the Government, monetary authorities, Central Bank of Nigeria, researchers and Deposit Money Banks in Nigeria.

scholarly journals Portfolio Diversification and Performance of Deposit Money Banks: Analysing the Nigerian Banking Industry

2021 ◽  
pp. 12-27
Author(s):  
Ihejirika Peters Omeni ◽  
Aderigha Ades George
Keyword(s):  
Central Bank ◽  
Banking Industry ◽  
Portfolio Diversification ◽  
Foreign Investments ◽  
Treasury Bills ◽  
Return On Equity ◽  
Long Run ◽  
Short Run ◽  
And Performance ◽  
Nigerian Banking

The focus is on Portfolio Diversification and Performance of Deposit Money Banks: analyzing the Nigerian banking industry for the period 1990-2019. The study measured treasury bills, ordinary shares, investments in subsidiaries, and foreign investments outside Nigeria as proxies for Portfolio Diversification while Return on Equity as proxy for performance of deposit money banks for the periods under review. In the course of the study, data were obtained from the website of Central Bank Statistical bulletin and annual report of Nigerian Deposit Insurance Corporation (NDIC). The Augmented Dickey Fuller (ADF) test option was used to test for unit roots. The ARDL and Bounds test were used to estimate the short and long run relationships respectively. The study discovered that at short run, treasury bills, and ordinary shares are negatively related and not significantly related to return on equity while investments in subsidiaries and foreign balances outside Nigeria are positively related to return on equity of DMBs at most lag periods. However, it was further observed that at different lag periods the variables do not significantly predict the direction of return on equity of DMBs. Long run relationship was also observed to exist amid treasury bills, acquisition of ordinary shares, investment in subsidiaries, ,foreign investments outside Nigeria and performance of all deposit money banks in Nigeria for the period 1990 – 2019.at short run, DMBs should diversify into investments in subsidiaries , as this would improve return on equity. Deposit Money Banks should also diversify into foreign holdings that would yield positive net present values. Deposit money Banks in Nigeria should diversify into foreign investments with the right mix   that would increase performance. These were some of the recommendations proffered, to the Government, monetary authorities, Central Bank of Nigeria, researchers and Deposit Money Banks in Nigeria.

scholarly journals Cross-section instability in financial markets: impatience, extrapolation, and switching

2021 ◽  
Author(s):  
Roberto Dieci ◽  
Xue-Zhong He
Keyword(s):  
Financial Markets ◽  
Cross Section ◽  
Asset Price ◽  
Asset Market ◽  
Long Run ◽  
Short Run ◽  
And Performance ◽  
Equilibrium Market ◽  
High Degree ◽  
Fundamental Price

AbstractThis paper presents a stylized model of interaction among boundedly rational heterogeneous agents in a multi-asset financial market to examine how agents’ impatience, extrapolation, and switching behaviors can affect cross-section market stability. Besides extrapolation and performance based switching between fundamental and extrapolative trading documented in single asset market, we show that a high degree of ‘impatience’ of agents who are ready to switch to more profitable trading strategy in the short run provides a further cross-section destabilizing mechanism. Though the ‘fundamental’ steady-state values, which reflect the standard present-value of the dividends, represent an unbiased equilibrium market outcome in the long run (to a certain extent), the price deviation from the fundamental price in one asset can spill-over to other assets, resulting in cross-section instability. Based on a (Neimark–Sacker) bifurcation analysis, we provide explicit conditions on how agents’ impatience, extrapolation, and switching can destabilize the market and result in a variety of short and long-run patterns for the cross-section asset price dynamics.

Rethinking femininity in organisations: Experimental insights into team composition

2018 ◽  
Vol 26 (5) ◽  
pp. 866-879 ◽  
Author(s):  
Ronald Busse
Keyword(s):  
Sex Role ◽  
Role Expectations ◽  
Curvilinear Relationship ◽  
Sex Role Stereotypes ◽  
Long Run ◽  
Short Run ◽  
And Performance ◽  
State Of Affairs ◽  
Role Incongruity ◽  
Team Types

AbstractRole incongruity, sex role stereotypes and candidate selection procedures which oversatisfy masculine role expectations evoke an underrepresentation of femininity in organisations. The author seeks to remedy this bad state of affairs. This study is designed based on an experiment with 288 young executives simulating self-organised work groups and manipulated the degree of gender-related (not sex-related) heterogeneity. Results generally show a curvilinear relationship with an upright U-shaped format between heterogeneity and performance, team identity and intrateam communication. The major contribution in specific is that highly homogeneous teams outperform other team types in the short run, whereas highly heterogeneous teams succeed in the long run. Consequently, this work recommends ‘femininity enrichment’ in firms and discusses manageable practical advice to do so. As for the laboratory character, findings and implications for practicing managers have to be treated with caution. Finally, the most promising avenues for further research are illuminated.

scholarly journals Liquidity Risk and Financial Performance of Commercial Banks in Kenya

2017 ◽  
Vol 9 (3) ◽  
pp. 256 ◽  
Author(s):  
Jane Gathigia Muriithi ◽  
Kennedy Munyua Waweru
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Generalized Method Of Moments ◽  
Liquidity Risk ◽  
Coefficient Of Determination ◽  
Return On Equity ◽  
Coverage Ratio ◽  
Long Run ◽  
Negative Effect ◽  
Short Run

The focus of this study was to examine the effect of liquidity risk on financial performance of commercial banks in Kenya. The period of interest was between year 2005 and 2014 for all the 43 registered commercial banks in Kenya. Liquidity risk was measured by liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) while financial performance by return on equity (ROE). Data was collected from commercial banks’ financial statements filed with the Central Bank of Kenya. Panel data techniques of random effects estimation and generalized method of moments (GMM) were used to purge time-invariant unobserved firm specific effects and to mitigate potential endogeneity problems. Pairwise correlations between the variables were carried out. Wald and F- tests were used to determine the significance of the regression while the coefficient of determination, within and between, was used to determine how much variation in dependent variable is explained by independent variables. Findings indicate that NSFR is negatively associated with bank profitability both in long run and short run while LCR does not significantly influence the financial performance of commercial banks in Kenya both in long run and short run. However, the overall effect was that liquidity risk has a negative effect on financial performance. It is therefore advisable for a bank’s management to pay the required attention to the liquidity management.

scholarly journals Impact of sovereign credit risk on the Lithuanian interest rate on loans

Ekonomika ◽  
2015 ◽  
Vol 94 (2) ◽  
pp. 113-128
Author(s):  
Arvydas Kregždė ◽  
Gediminas Murauskas
Keyword(s):  
Credit Risk ◽  
Interest Rates ◽  
Substantial Impact ◽  
Sovereign Credit ◽  
Long Run ◽  
Retail Credit ◽  
Short Run ◽  
Sovereign Credit Risk ◽  
The Baltic ◽  
Evident Relationship

The paper deals with banks’ interest rates on loans for non-financial corporations and households in Lithuania. It focuses on the influence of the sovereign credit risk on interest rates for loans. The paper presents an analysis of long-run and short-run relationship between interest rates on loans and the financial market indicators EURIBOR and CDS spread. The application of the cointegration technique has revealed that a change in the CDS spread by 100 basis points has an impact on changes in interest rates on loans by 42 basis points in the long run. No evident relationship between CDS spread and interest rates on loans in a short run has been detected. This shows that market conditions do not play a pivotal role for the banks in setting the interest rates on loans in a short run. Some communalities in interest rates on loans in the Baltic states have been established. The main finding is that the sovereign credit risk of Lithuania, expressed as a CDS spread, has a substantial impact on interest rates in the retail credit market of Lithuania in a long run.

scholarly journals Response of Deposit Money Banks to Monetary Policy Dynamics in Nigeria

2020 ◽  
Vol 7 (4) ◽  
pp. 33
Author(s):  
Ejem, Chukwu Agwu ◽  
Ogbonna, Udochukwu Godfrey
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Deposit Insurance ◽  
Policy Instruments ◽  
Bank Performance ◽  
Long Run ◽  
Policy Dynamics ◽  
Short Run ◽  
Saving Deposit ◽  
Reserve Ratio

This study examined how banks react to the monetary policies transmission mechanisms of the central bank of Nigeria. The data employed were collected from Nigerian Deposit Insurance Cooperation and Central Bank of Nigeria and subjected to various finametric techniques. The major findings are that cash reserve ratio negatively and significantly affects the performance of deposit money banks in Nigeria, while other monetary policy variables exert insignificantly to the performance of deposit money banks. It was also found that apart from banks own shock; banks respond negatively to shocks from major monetary policy instruments. It was observed that Monetary Policy Rate causes bank performance in both in the short run and long run. While, Cash Reserve Ratio, Liquidity Ratio and Saving Deposit Rate do not cause bank performance in the short run but in the long run. It was also found that monetary policy instruments jointly cause bank performance in the short and long run as opposed by individual instruments in Nigeria. The researchers therefore suggest among others that central bank of Nigeria reduce the cash reserve ratio to enable deposit money banks extend more loans to their potential customers, thereby enhance performance.

Performance of Odisha State Co-operative Bank: An ARDL Approach

2020 ◽  
pp. 097674792094176
Author(s):  
Ranjan Kumar Nayak
Keyword(s):  
Correction Term ◽  
Share Capital ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Proactive Management ◽  
Long Run ◽  
Ardl Approach ◽  
Augmented Dickey Fuller ◽  
Short Run ◽  
Adf Test

This article tries to analyse the financial performance of Odisha State Co-operative Bank (OSCB) for the period of 1949–1950 to 2014–2015. The methodology employed for the empirical analysis on this study involves autoregressive distributed lag (ARDL), augmented Dickey–Fuller (ADF) test and Phillips–Perron (PP). Statistical significant of the coefficient of the lagged error-correction term shows about 44 per cent correction in short-run dynamics to the long-run equilibrium. Using the ARDL approach, the study finds that owned fund, borrowing, advance and working capital, share capital and reserve are statistically significant in the short run; and deposits, share capital and reserve are statistically significant in the long run. The empirical results suggest that deposits and advances impact the profits of OSCB positively while cost of management, capital and reserves lead to lower profits. Hence, the study proposes the OSCB to follow a proactive management of capital with higher deposit generation and larger advances strategy to become a strong bank and grow steadily.

scholarly journals Determinants of credit risk of Indonesian Sharīʿah rural banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Unggul Priyadi ◽  
Kurnia Dwi Sari Utami ◽  
Rifqi Muhammad ◽  
Peni Nugraheni
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Credit Risk ◽  
Capital Adequacy ◽  
Internal Variables ◽  
Content Type ◽  
Long Run ◽  
External Variables ◽  
Short Run ◽  
Medium Businesses

Purpose This study aims to examine the influence of internal and external factors on the credit risk (represented by nonperforming financing [NPF]) of Indonesian Sharīʿah rural banks (SRBs) – a type of Islamic bank that provides Islamic financial services especially to small and medium businesses in Indonesia. Internal variables comprise capital adequacy ratio (CAR), financing to deposit ratio (FDR), return on assets (ROA), operating expense ratio (OER), financing to value (FTV) and profit and loss sharing (PLS) financing ratio. External variables comprise inflation, economic growth and interest rate. Design/methodology/approach The study uses the annual reports of SRBs in Indonesia as secondary data for the years 2010–2019. Auto regressive distributed lag (ARDL) is used as the analysis method to examine the short-run and long-run relationships between the variables. Findings The findings indicate that four variables experienced a lag in the short run, namely, NPF, inflation, CAR and PLS, with different results recorded for each of the variables. Furthermore, the long-run results show that CAR and ROA influence the NPF of SRBs positively, whereas inflation and PLS have a negative influence on NPF. The rest of the variables – notably economic growth, interest rate, FDR, FTV and OER – do not have an influence on NPF in SRBs. Research limitations/implications The level of NPF in SRBs exceeds the provision of the Central Bank of Indonesia. The findings are expected to have implications for SRBs and the regulator to consider and to manage the factors related to NPF properly due to the important role of SRBs in small and medium businesses’ development. Originality/value This study measures the determinants of NPF using internal and external variables, including the addition of a dummy variable, notably FTV. This study also uses ARDL to analyze the financial policies involving data at the present time and lagged time.

scholarly journals Influence of Interest Rate on Industrial Output in Nigeria

2020 ◽  
Vol 3 (2) ◽  
pp. p21
Author(s):  
Chioma Chidinma George-Anokwuru ◽  
Itoro Bosco
Keyword(s):  
Interest Rate ◽  
Central Bank ◽  
Positive Relationship ◽  
Labour Force ◽  
Industrial Sector ◽  
Industrial Output ◽  
Long Run ◽  
Industry Output ◽  
Short Run ◽  
The Relationship

The study examined the effect of interest rate on industrial sector in Nigeria from 1980 to 2018. The data for the study were sourced from Central Bank of Nigeria (CBN) statistical bulletin and Autoregressive Distributed Lag model was used as the main analytical tool. The ARDL Bounds test revealed the existence of long run relationship among the variables. The result further revealed the existence of a positive relationship between interest rate and industrial output both in the long run and short run. The rate of inflation was negatively related to industrial output but the relationship was not significant in both the short run and the long run. The number of labour force affected the productivity of industry thereby increasing its output in both the short run and the long run. Gross investment has a positive relationship with industrial output but the relationship was not significant. Lastly, foreign direct investment was not significant in affecting industrial output in the short run but it was positive and significant in affecting industrial output in the long run. The study concluded that interest rate has the ability to influence industry output in Nigeria. Therefore, the study recommended among others that the apex monetary institution - the Central Bank of Nigeria should ensure that the rate of interest that will encourage investors to borrow in order to start to do businesses or to expand their businesses. This will increase industry output and in turn support economic growth in Nigeria.

Financial sector sustainability and performance – Policy Imperative for the monetary authorities'

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Richard Osadume ◽  
Anthony Ojovwo Okene
Keyword(s):  
Research Work ◽  
Analytical Techniques ◽  
Financial Sector ◽  
Least Square ◽  
Host Community ◽  
Content Type ◽  
Long Run ◽  
Monetary Authorities ◽  
Short Run ◽  
And Performance

PurposeThe objective of this study is to ascertain whether financial sector sustainability had any correlation with financial sector performance in Nigeria and recommend appropriate policy directions.Design/methodology/approachThe study selected four major Nigerian banks namely Zenith Bank Guaranty Bank United Bank for Africa and First Bank of Nigeria as its sample and covered 2010 to 2019. Secondary panel data were obtained from the published financial Statements of the banks and subjected to analytical techniques of panel unit root tests descriptive statistics panel least square and Co-integration statistical techniques at the 5% level of significance.FindingsThe findings revealed that the exogenous variables (SUST) have significant Impact on the endogenous variable (ROA, ROE) in the short-run but insignificant in the long run.Research limitations/implicationsThe period covered was limited to 10 years and has an African development focus with emphasis on West Africa, Nigeria. However, the implication could be general to most or all economic and financial landscape. It shows that there is a correlation between financial sector sustainability and return on assets and returns on equity.Practical implicationsMonetary authorities should develop applicable annual performance sustainability framework for all banks; and set performance targets, that will be measured and monitored by appropriate regulatory unit periodically.Social implicationsThe financial sector survival is directly related to its contribution towards the survival and development of its host community and operating environment.Originality/valueThis approach is novel in the sense that its approach is practical and measurable, which most research work have not focused on.

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