scholarly journals International Liquidity Channel and Performance of Commercial Banks in Nigeria

2021 ◽  
Vol 04 (09) ◽  
Author(s):  
Dr. Henry Waleru Akani ◽  
Keyword(s):  
Monetary Policy ◽  
International Trade ◽  
Financial Market ◽  
Commercial Banks ◽  
Capital Mobility ◽  
International Liquidity ◽  
Return On Equity ◽  
Negative Effect ◽  
Trade Channel ◽  
Market Channel

This study examined the effect of international liquidity channels on the profitability of quoted commercial banks in Nigeria. The objective was to examine the direction which international liquidity channel affects commercial banks profitability. Return on equity was used as dependent variable while Monetary policy channels proxy by percentage of net foreign assets, financial market channel proxy by percentage of net foreign portfolio investment, international trade channel proxy by percentage of Nigeria terms of trade, capital mobility channel proxy by net foreign direct investment and currency channel proxy by variation of Nigeria naira to US dollar. Panel data of return on equity were sourced from financial reports of the commercial banks while international liquidity variables were sourced from Central banks of Nigeria statistical bulletin. Ordinary least square methods were used as data analysis methods. The study found that 50.3 percent of the variation in return on equity of the commercial banks is explained by the variables in the equation. Monetary policy channel, international trade channel and currency have negative effect on return on equity while financial market channel and capital mobility channel has positive and no significant effect on return on equity of the commercial banks. The study recommends that Central Bank of Nigeria should adopt an appropriate macro prudential framework to enable Nigeria banks become internationally active in terms of liquidity and solvency. The depreciating naira exchange rate should be integrated to the monetary and the macroeconomic policies to avert its negative effect on the economy and the banking industry. The regulatory authorities and the bank management should formulate policies to manage international monetary shocks, the international financial environment and global financial crises to enhance Nigerian banking system soundness.

The impact of credit risk on the financial stability of commercial banks in Vietnam

2021 ◽  
Vol 11 (2) ◽  
pp. 67-80
Author(s):  
Nguyen Quoc Anh ◽  
Duong Nguyen Thanh Phuong
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Financial Stability ◽  
Dynamic Panel Data ◽  
Z Score ◽  
Return On Equity ◽  
Score Analysis ◽  
Negative Effect ◽  
The Difference ◽  
The Impact

This study investigates the impact of credit risk on the financial stability of Vietnamese commercial banks. The paper uses the Z-score to proxy the financial stability of banks. We use the data of 27 Vietnamese commercial banks on BankScope, during 2010 - 2019. The paper applied a dynamic panel data approach; the selected method is the difference GMM (DGMM). The key question discussed is which factor impacts on Z-score. Analysis results show the negative effect of non-performing loans on the financial stability of banks. When commercial banks have higher non-performing loans, the lower the financial stability is. Additionally, bank-specific variables such as equity on asset ratio, the return on equity, the size of the bank and set of macroeconomic variables affect the bank’s financial stability. Based on the analysis results, we imply relevant policies for the State Bank of Vietnam and commercial banks.

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.

Monetary Policy and Commercial Bank Lending to the Real Sector in Nigeria: A Time Series Study

2018 ◽  
Vol 2 (1) ◽  
pp. 10-41
Author(s):  
Ogolo . ◽  
Tamunotonye Magnus
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Money Supply ◽  
Commercial Banks ◽  
Bank Lending ◽  
Real Sector ◽  
Treasury Bill ◽  
The Real ◽  
Negative Effect

This study empirically examined the effects of monetary policy on commercial banks lending to the real sector from 1981 – 2014. The objective was to examine the effectiveness of monetary policy in channeling bank credit to the real sector. Annual time series data were sourced from Central Bank of Nigeria statistical bulletin. Two multiple regression models were specifically estimated with the aid of Software Package for Social Sciences. The study modeled commercial banks credit to agricultural and manufacturing sector as the function of interest rate, monetary policy rate, treasury bill rate, exchange rate, broad money supply and liquidity ratio. The result shows collinearity that corresponds with the Eigen value condition index, and variance constant are less than the required value. The Durbin Watson statistics shows the absence of multiple auto correlation and negative autocorrelation, while the variance inflation factors indicate the absence of auto-correlation. The regression results from model one found that interest rate, monetary policy rate have positive relationship with commercial banks lending to the agricultural sector while Treasury bill rate, exchange rate, broad money supply and liquidity ratio have negative effect on the dependent variable. Model two found that interest rate, Treasury bill rate, exchange rate, broad money supply and liquidity ratio have negative effect on commercial banks lending the manufacturing sector while monetary policy rate have positive relationship with the dependent variable. We recommend that monetary policy should be harmonize with bank lending objectives to enhance commercial banks lending to the real sector of the economy and that management of commercial banks should formulate policies of managing the negative effect of monetary policy variables on its lending.

scholarly journals Internet, Participation in International Trade and Tax Revenue Instability

2020 ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
International Trade ◽  
Error Component ◽  
Tax Revenue ◽  
The Internet ◽  
Generalized Methods Of Moments ◽  
Negative Effect ◽  
Potential Benefits ◽  
Trade Channel ◽  
Methods Of Moments ◽  
Robustness Check

This paper investigates the effect of the Internet on tax revenue instability, notably through the international trade channel. It has used a sample of 142 countries over the period 1995-2017, and relied primarily on the two-step system Generalized Methods of Moments (GMM) estimators (but also incidentally on the Error Component Two-Stage Least Squares estimator). Tax revenue instability is primarily measured by the instability of non-resource tax revenue, but also by the instability of total tax revenue (for robustness check). The findings indicate that the Internet exerts a negative effect on tax revenue instability. Interestingly, this effect genuinely translates through the international trade channel, regardless of the measure of tax revenue instability considered. Countries enjoy a higher negative effect of the Internet on tax revenue instability as they enjoy a greater participation in international trade. These findings, therefore, add to the potential benefits of the Internet adoption (e.g., strengthening countries' participation in international trade, enhance their tax revenue performance and promote tax reform, including in developing countries) by showing that it could also help to stabilize tax revenue, particularly through the degree of countries' participation in international trade.

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.

scholarly journals Evaluating and Comparing Beta CAPM in 2 Listed Vietnam Banks for Bannking Sustainable Development During Period 2011-2020

2021 ◽  
Vol 11 (3) ◽  
pp. 2276-2288
Author(s):  
Pham Thi Hong Nhung ◽  
Dinh Tran Ngoc Huy ◽  
Vu Quynh Nam ◽  
Leng Thi Lan
Keyword(s):  
Risk Management ◽  
Financial Market ◽  
Commercial Banks ◽  
Market Risk ◽  
High Impact ◽  
Governmental Agencies ◽  
Management Processes ◽  
Study Results ◽  
Negative Effect ◽  
Positive Effect

Authors selected 2 big listed banks Vietcombank and Sacombank in order to calculate market risk and make comparison, in Vietnam financial market. There are both strengths and weaknesses in risk management processes in commercial banks in emerging markets such as Vietnam. Huy, D.T.N (2015) has done a research to state that risk management and corporate governance standards nee to be enhance in corporations. Study results tell us that CPI has negative effect and higher impact on beta of both banks (table 3), while Rf has high impact and positive effect on beta of the banks, we suggest relevant governmental agencies need to control CPI (not decrease much) and rates of T-bill (not increase much) in order to reduce market risk. Finally, we make recommendations on risk management.

scholarly journals Impact of Monetary Policy on Bank’s Profitability: A Study on Listed Commercial Banks in Bangladesh

2020 ◽  
Vol 5 (2) ◽  
pp. 72-79
Author(s):  
Md. Ariful Hoque ◽  
Afzal Ahmad ◽  
Mustafa Manir Chowdhury ◽  
Mohammad Shahidullah
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Commercial Banks ◽  
Banking System ◽  
Open Market ◽  
Return On Equity ◽  
Time Deposits ◽  
The Government ◽  
The Impact ◽  
Reserve Ratio

Monetary policy is the policy by which the government of a country control supplies of money in an economy which is announced by the central bank for every six months. Central Bank carries out monetary policy by the banking system of a country.  Central Bank uses Bank rate; Cash reserve ratio and open market operation to control the availability of funds in an economy. Within these three instruments, the cash reserve ratio is directly linked to the commercial bank's profitability. Every commercial bank maintains a cash reserve ratio against their demand & time deposits. Being changes in the cash reserve ratio banks profit level may increase or decrease. The prime intention here is to show the impact of monetary policy, especially Cash Reserve Ratio on the commercial bank's profitability. This study covers only listed commercial banks in Bangladesh. As sample researcher purposively selected 15 listed commercial banks that have available information. Results revealed that CRR negatively related to Return On Assets (-0.1133), Return On Equity (-0.0577) as well as Return On Investment (-0.0504). This means the bank's profitability declined due to the increase in cash reserve ratio (CRR). Again regression analysis outlined that the cash reserve ratio negatively impacts on the profitability of studied commercial banks in Bangladesh, which is statistically significant at the 10% level. Researchers proposed that Bangladeshi commercial banks will design their profitability plan by considering monetary policy tools, particularly the Cash reserve ratio.

scholarly journals CAPITAL STRUCTURE AND INTEREST RATE AS DETERMINANTS OF PROFITABILITY AND EFFICIENCY OF THE PHILIPPINE BANKING SECTOR: THE CASE OF UNIVERSAL AND COMMERCIAL BANKS

2020 ◽  
pp. 5-7
Author(s):  
Arjay V Artes ◽  
Assoc. Prof. Ricardo L. Dizon
Keyword(s):  
Regression Analysis ◽  
Interest Rate ◽  
Capital Structure ◽  
Commercial Banks ◽  
Banking Sector ◽  
The Philippines ◽  
Equity Capital ◽  
Return On Equity ◽  
Debt Capital ◽  
Negative Effect

This study examined the influence of capital structure and interest rate as determinants of profitability and efficiency of universal and commercial banks in the Philippines. The researcher uses equity capital and debt capital to measure capital structure, and return on asset, and return on equity as a measure of efficiency and profitability respectively. The method used to summarize the relationship of these banks was Multivariate Regression Analysis. The results shows that capital and interest rate have significant effect to return on asset and return on equity by showing a p-value of less than five percent in the regression analysis. Capital structure in terms of debt capital has negative effect while equity capital shows positive impact to ROA and ROE. Moreover, interest rate also shows a negative effect to the performance of banks. Thus, the paper recommends universal and commercial banks should strengthen their efforts to depend on internally generated funds as their source of finance. KEYWORDS: Universal banks, Commercial banks, Return on asset, Return on equity, Interest rate

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.

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