scholarly journals CHALLENGES FACING COMMERCIAL BANKS IN THE IMPLEMENTATION OF CAPITAL ADEQUACY REQUIREMENT IN BASEL III FRAMEWORK

2017 ◽  
Vol 1 (4) ◽  
pp. 45
Author(s):  
Kevin N. Kombo ◽  
Dr. Amos Njuguna
Keyword(s):  
Commercial Banks ◽  
Survey Design ◽  
Descriptive Analysis ◽  
Capital Adequacy ◽  
Primary Data ◽  
Basel Iii ◽  
Management Culture ◽  
Finance Management ◽  
Regulatory Constraints ◽  
Management Staff

Purpose: The purpose of the study was to identify challenges facing commercial banks in the implementation of capital adequacy requirement in Basel III framework.Methodology: A descriptive survey design was applied to a population of 43 commercial banks operating in Kenya. The target population composed of the 159 management staff currently employed at the head offices of the various commercial banks in Kenya. The population was composed of Senior, Middle and Junior or Entry level Management staff. A sample of 30% was selected from within each group. Primary data was gathered using questionnaires which were dropped off at the bank’s head offices and picked up later when the respondents had filled the questionnaires. Descriptive analysis was used to analyze quantitative data while content analysis was used to analyze qualitative data.Results: The study concludes that the implementation of Basel III requirement has been faced by various challenges like growth barrier, regulatory constraints, risk and finance management culture and additional capital challenges. In addition, the study concluded that commercial banks face challenges in deciding how best to implement a solution that will allow them to comply with Basel III, how to operate the systems and processes for improved operational effectiveness, and how to understand and ultimately reduce their capital requirements.Unique contribution to theory, practice and policy: The study recommends that Banks should manage their risks more closely and avoid a build-up of unintended risk, reducing the opportunities for regulatory capital arbitrage. This would go a long way in eliminating growth barriers, regulatory constraints, capital adequacy requirement, risk and finance management culture and additional capital challenges.

scholarly journals MEASURES COMMERCIAL BANKS HAVE TAKEN TO ENSURE COMPLIANCE WITH THE CAPITAL ADEQUACY REQUIREMENT IN BASEL III FRAMEWORK

2017 ◽  
Vol 1 (4) ◽  
pp. 64
Author(s):  
Kevin N. Kombo ◽  
Dr. Amos Njuguna
Keyword(s):  
Commercial Banks ◽  
Survey Design ◽  
Descriptive Analysis ◽  
Target Population ◽  
Capital Adequacy ◽  
Primary Data ◽  
Basel Iii ◽  
Entry Level ◽  
Revenue Growth ◽  
Management Staff

Purpose: The purpose of the study was to establish measures commercial banks have taken to ensure compliance with the capital adequacy requirement in Basel III framework.Methodology: A descriptive survey design was applied to a population of 43 commercial banks operating in Kenya. The target population composed of the 159 management staff currently employed at the head offices of the various commercial banks in Kenya. The population was composed of Senior, Middle and Junior or Entry level Management staff. A sample of 30% was selected from within each group. Primary data was gathered using questionnaires which were dropped off at the bank’s head offices and picked up later when the respondents had filled the questionnaires. Descriptive analysis was used to analyze quantitative data while content analysis was used to analyze qualitative data.Results: Based on the findings the study concluded that the commercial banks in Kenya have taken various measures to ensure compliance with capital adequacy requirement such as cutting back on lending, market rights issue/bonds, increasing revenue growth/cutting costs and withholding dividend payment. In addition, the study concluded that commercial banks, in a bid to reduce the challenges experienced in the implementation of capital adequacy requirement, they opt to purchase high quality liquid assets, increasing their maturity profile and increasing retail deposits.Unique contribution to theory, practice and policy: The study recommends that it is vital to understand the forces behind the increasing sophistication and efficiency of risk management systems, before adopting them more widely for regulatory purposes

scholarly journals IMPORTANCE OF CAPITAL ADEQUACY REQUIREMENTS IN BASEL III FRAMEWORK FOR COMMERCIAL BANKS IN KENYA

2017 ◽  
Vol 1 (4) ◽  
pp. 26 ◽  
Author(s):  
Kevin N. Kombo ◽  
Dr. Amos Njuguna
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Financial Stability ◽  
Balance Sheet ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Primary Data ◽  
Basel Iii ◽  
Management Staff ◽  
Speed Accuracy

Purpose: The purpose of the study was to examine the importance of capital adequacy requirements in Basel III framework for commercial banks in KenyaMethodology: A descriptive survey design was applied to a population of 43 commercial banks operating in Kenya. The target population composed of the 159 management staff currently employed at the head offices of the various commercial banks in Kenya. The population was composed of Senior, Middle and Junior or Entry level Management staff. A sample of 30% was selected from within each group. Primary data was gathered using questionnaires which were dropped off at the bank’s head offices and picked up later when the respondents had filled the questionnaires.Descriptive analysis was used to analyze quantitative data while content analysis was used to analyse qualitative data.Results: The study concludes that capital adequacy requirement is perceived to be important in commercial banks. The study thus deduces that financial stability, credit risk management, reduced vulnerability to liquidity shocks balance sheet structure and deposit insurance affect the capital requirement of the commercial banks in Kenya. In addition, the study concluded that Basel III increases capital requirements for counterparty credit risk arising from derivatives, repurchase agreements and securities financing activities.Unique contribution to theory, practice and policy: The study recommends that banks should ensure a flexible Basel III management expertise that delivers speed, accuracy, and performance to deliver competitive advantage.

scholarly journals Effects of Basel III Framework on Capital Adequacy of Commercial Banks in Kenya

2016 ◽  
Vol 1 (1) ◽  
pp. 61
Author(s):  
Kevin Kombo ◽  
Dr. Amos Njuguna
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Financial Stability ◽  
Safety Net ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Basel Iii ◽  
Credit Risk Management ◽  
Management Staff

Purpose:The purpose of the study was toassess the effects of Basel III framework on capital adequacy requirement in commercial banks in Kenya. The study sought to address the following research questions: why are capital adequacy regulations important in commercial banks in Kenya? What challenges are commercial banks facing in the implementation of capital adequacy requirement? What measures have commercial banks taken to ensure compliance with the capital adequacy requirement?Methodology:A descriptive survey design was applied to a population of 43 commercial banks operating in Kenya. The target population composed of the 159 management staff currently employed at the head offices of the various commercial banks in Kenya. The population was composed of Senior, Middle and Junior or Entry level Management staff. A sample of 30% was selected from within each group.Primary data was gathered using questionnaires which were dropped off at the bank’s head offices and picked up later when the respondents had filled the questionnaires. Descriptive analysis was used to analyze quantitative data while content analysis was used to analyze qualitative data.Results:The findings show that capital adequacy requirement is important in commercial banks because it leads financial stability in the Kenyan economy, improves credit risk management techniques as poor credit risk management requires more capital and leads to reduced vulnerability to liquidity shocks due to the sound capitalization policies being implemented under the Basel III framework. Findings also revealed that capital adequacy affected the balance sheet structure of the commercial banks in Kenya.Unique contribution to theory, practice and policy: The study recommends that banks should continue the pursuit of various strategies to ensure that they are in compliance with Basel III requirements and the Central Bank of Kenya’s Prudential Guidelines. The staff of this committee should be drawn from mainly the finance, legal, compliance and treasury departments. Compliance with the capital requirements will lead to a safety net for all commercial banks as the additional capital will act as a cushion that absorbs losses in case of distress in the commercial banking sector.

scholarly journals A Study on Financial Performance of the Jordanian Commercial Banks using the CAMEL Model and Panel Data Approach

2020 ◽  
Vol 9 (4) ◽  
pp. 111-130
Author(s):  
Jamil Al Zaidanin
Keyword(s):  
Commercial Banks ◽  
Negative Relationship ◽  
Capital Adequacy ◽  
Primary Data ◽  
Quality Level ◽  
Financial Reports ◽  
Interest Income ◽  
Lending Policy ◽  
Performance Determinants ◽  
Asset Quality

The purpose of this research paper is to extensively investigate and examine the effect of the CAMEL model variables on the profitability and financial soundness of the thirteen Jordanian commercial banks for the period of 2013 to 2019, the primary data were collected from the published audited financial reports of the Jordanian commercial banks. The study uses CAMEL model variables of Capital adequacy, Asset Quality, Management efficiency, Earnings ability, and Liquidity management to rank banks as per their overall performance and measuring their effect on banks’ profitability measures of Return on Assets and Return on Equity separately through applying the fixed effect regression model. It is concluded that the ranking approach shows that Bank of Jordan was in the top position followed by the Capital Bank of Jordan. Jordan Ahli Bank was in the lowest rank in most positions. Furthermore, the empirical results indicates that Non-Interest Income to Total Assets and Net Interest Income to Total Loans and Advances have significant positive relationships with both profitability measures whereas cost to Total Income and Non-Interest Income to Total Assets have strong negative relationships with the profitability measures. In addition, Equity to Total Assets has strong negative relationship with ROE. The study suggests that Jordanian commercial banks can improve their profitability through the concentration on main activities, efficiently managing their capital adequacy, maintaining high quality level of lending policy, and utilization of full assets. Additionally, the current study recommends conducting more studies on banks’ performance determinants with an expanded scope and using more financial models besides the CAMEL model.

Basic Requirements Of The Basel Committee On Regulating Capital Adequacy And Liquidity Of Commercial Banks

2012 ◽  
Vol 4 ◽  
Author(s):  
Bahriddin Berdiyarov
Keyword(s):  
Risk Assessment ◽  
Commercial Banks ◽  
Basel Ii ◽  
Capital Adequacy ◽  
Basel Iii ◽  
Basel Committee ◽  
Performance Quality ◽  
Regulatory Standards ◽  
Loan Risk ◽  
Credit Risk Measurement

The current paper highlights theBaselI, Basel II & Basel III requirements on capital adequacy and liquidity of commercial banks.  In the paper, Basel II structure, methods of loan risk assessment, coefficients of loan risk assessment, credit risk measurement for counterparty banks are discussed.  Moreover, assessments of Basel III on bank chances against crisis driven from financial and economic crunches, risk management, performance quality and bank transparency improvement measures are presented.  At the end, the author gives his conclusions on the essence and necessity of new regulatory standards of the Basel Committee on bank’s supervision in the structure of the supervision of credit institutions.

Does capital adequacy ratio influence risk-taking behaviour of conventional and Islamic banks differently? Empirical evidence from dual banking system of Malaysia

2020 ◽  
Vol 11 (9) ◽  
pp. 1989-2015
Author(s):  
Rafik Harkati ◽  
Syed Musa Alhabshi ◽  
Salina Kassim
Keyword(s):  
Empirical Evidence ◽  
Risk Taking ◽  
Commercial Banks ◽  
Banking Sector ◽  
Ordinary Least Squares ◽  
Capital Adequacy ◽  
Basel Iii ◽  
Islamic Banks ◽  
Content Type ◽  
Capital Adequacy Ratio

Purpose The purpose of this study is to investigate the influence of capital adequacy ratio (CAR) prescribed in Basel III on the risk-taking behaviour of Islamic and conventional commercial banks in Malaysia. It also investigates the claim that the risk-taking behaviour of Islamic banks (IBs) and conventional banks (CBs) managers is identically influenced by CAR. Design/methodology/approach Secondary data for all CBs operating in the Malaysian banking sector are gathered from FitchConnect database for the 2011–2017 period. Both dynamic ordinary least squares and generalised method of moments techniques are used to estimate a panel data of 43 commercial banks, namely, 17 IBs and 26 CBs. Findings The findings of this study lend support to the favourable influence of CAR set in Basel III accord on risk-taking behaviour of both types of banks. CBs appeared to be remarkably better off in terms of capital buffers. Evidence is established on the identicality of the risk-taking behaviour of IBs and CBs managers under CAR influence. Practical implications Even though a high CAR is observed to hamper risk-taking of banks, the findings may serve as a signal to regulators to be mindful of the implications of holding a high CAR. Similarly, managers may capitalise on the findings in terms of strategising for efficient use of the considerable capital buffers. Shareholders are also concerned about managers’ use of the considerable capital buffers. Originality/value This study is among a few studies that endeavoured to provide empirical evidence on the claim that IBs mimic the conduct of CBs in light of the influence of CAR prescribed in Basel III on risk-taking behaviour, particularly banks operating within the same banking environment.

scholarly journals Impact of Workplace Environmental Factors on Employee Commitment: Evidence from North East Nigeria

2018 ◽  
Vol 6 (07) ◽  
Author(s):  
Adeoye K. Funminiyi
Keyword(s):  
Environmental Factors ◽  
Performance Feedback ◽  
Survey Design ◽  
Employee Commitment ◽  
Primary Data ◽  
Organizational Goals ◽  
North East ◽  
Key Factor ◽  
Management Staff ◽  
The Impact

Recently, it has been observed that workplace environmental factors are essential predictors of employee commitment, for achieving organizational goals and objectives. This study assessed the impact of workplace environmental factors on employee commitment in North East of Nigeria. Adopting a survey design, the research made used of primary data, collected mainly through administering a set of questionnaire to 205 management staff, supervisors and non-management staff of the selected manufacturing firms from Adamawa, Bauchi and Gombe states respectively. The findings revealed that: there is significant positive relationship between feedback and employee efficiency; incentive positively affects employees’ commitment. The study concluded that effective performance feedback is critical to employees’ efficiency and organisational growth. Incentives as key factor also contribute immensely to employee commitment in workplace. The work recommended that organisations should incorporate feedback approach into it system. In addition management should be consistent in giving incentives to workers that desire it on merit ground.

scholarly journals The contribution of horizontal business combination on financial performance of I&M Bank.

2021 ◽  
Vol 6 (1) ◽  
pp. 23-41
Author(s):  
Anne Mukabideri ◽  
Irechukwu Nkechi ◽  
Osiemo Kengere
Keyword(s):  
Financial Performance ◽  
New Product Development ◽  
Performance Indicator ◽  
Descriptive Analysis ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Primary Data ◽  
Operating Profit ◽  
Unit Increase ◽  
Business Combination

Purpose: This research generally assessed the contributions of horizontal business combination on financial performance of commercial banks and established the relationship between bank business combination bank financial performances. Methodology: The study adopted descriptive design to the population of 150 staffs of I&M bank with 109 sample size through purposive sampling. The study analyzed the information from 90 respondents, and financial statements of the bank for the period of 2011-2018. This research adopted a mix of both qualitative and quantitative approaches, primary data were from respondents using questionnaires and interview while secondary data were from financials statements and reports (2011 -2020). The research used SPSS version 20 to produce descriptive analysis (mean, mode, frequencies and standard deviation) for interpretation. Findings: The researcher performed correlation analysis and multiple regression analysis and found 0.834 correlation coefficient, 0.719. adjusted R squared at 95% confidence interval, holding horizontal combination, vertical combination and  Lateral combination to a constant zero, financial performance of I&M bank would  be  0.262, a unit increase in holding horizontal would lead to increase in performance of I&M bank by a factor of 0.356, a unit increase in vertical combination would lead to increase in performance of I&M bank by a factor of 0.832, a unit increase in Lateral combination would lead to increase in performance of I&M bank by a factor of 0.359. The study concluded that horizontal combination or lateral combination may include the need to increase their capital adequacy, improve on their new product development and acquiring new market share. Recommendations: The study recommends I& M Bank to take advantage of benefits that accrue from conducting business combinations, especially the potential which offers the increasing financial performance, to analyze carefully the type of business combination and to undertake the horizontal with reference to their particular effect on financial performance indicator parameters such Liquidity, Operating profit, Solvency and Profitability.

scholarly journals Effects of Infrastructure Development on African Cape buffalo Behaviour: A Case Study of Lake Nakuru National Park, Nakuru County, Kenya

2019 ◽  
Vol 1 (1) ◽  
pp. 56-65
Author(s):  
Maureen Ogwoka; Dr. Eliud Michura; Dr. Ednah Koskei
Keyword(s):  
National Park ◽  
Survey Design ◽  
Descriptive Analysis ◽  
National Level ◽  
Policy Formulation ◽  
Primary Data ◽  
Infrastructure Development ◽  
Normal Behaviour ◽  
Lake Nakuru ◽  
Cape Buffalo

The study's purpose was to assess the impacts of infrastructure development on African Cape buffalo behaviour in Lake Nakuru National Park. Descriptive survey design was used in this research since it allowed the study of African Cape buffalo without affecting their normal behaviour. The target population size was 215,000 people from which a sample size of 138 respondents was derived using Brickman's formulae. Key Informant Interviews (KIIs), questionnaires and field observation were used to collect primary data. Statistical Package for social science (SPSS) version 25 was used in data analysis. Descriptive analysis is presented using tables, frequencies and percentages while inferential statistics was done using regression model. Secondary data collected through a review of government documents and environmental journals was further used to enrich the results. It was established that infrastructure development exists in Lake Nakuru National Park, and it affects the African Cape buffalo behaviour. The study further indicated that the conservation policies aided in conserving the African Cape buffalo. Recommendations given are useful in environmental policy formulation for sustainable development of protected areas in both the county level and the national level.

EFFECT OF FINANCIAL RESOURCES ON THE EFFECTIVENESS OF DEBT COLLECTION IN COMMERCIAL BANKS

2017 ◽  
Vol 2 (4) ◽  
pp. 46
Author(s):  
Peter Kitonga
Keyword(s):  
Data Analysis ◽  
Commercial Banks ◽  
Quantitative Methods ◽  
Survey Design ◽  
Sampling Technique ◽  
Descriptive Statistics ◽  
Financial Resources ◽  
Primary Data ◽  
Sensitive Information ◽  
Debt Collection

Purpose: The study aimed to examine the effect of financial resources on the effectiveness of debt collection in commercial banks.Methodology: The research was carried out through descriptive survey design.  The total population of the study was 1118credit managers/supervisors or branch managersof the 37 commercial banks. A sample size of 118 respondents was selected through random sampling technique, which represents a 10% of the population. The study used both secondary and primary data specifically the study used a questionnaire as the preferred data collection tool. The questionnaire had close ended questions only. Secondary data on the level of Nonperforming loans/Gross loans was also collected. This study used the quantitative method of data analysis. Quantitative methods of data analysis included inferential and descriptive statistics. Descriptive statistics included frequencies and measures of tendency mainly mean. Inferential statistics include correlation and regression analysis. The tool for data analysis was Statistical Package for Social Sciences (SPSS) version 20 program. The results were presented using tables and pie charts to give a clear picture of the research findings.Results:Correlation results led to the conclusion that the relationship between financial resources and non-performing loans is negative and significant. This implies that an increase in the financial resources led to a decrease in non-performing loans. This further implies that financial resources influenced or affected non-performing loans negatively.Policy recommendation:it is recommended that staff competence be emphasized in the banks as it has an effect on the overall achievement of effective debt collection practices. Therefore the management is urged to encourage sharingofpotentially sensitive information on costs, quality, and productivity on financial performance with other employees.

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