scholarly journals A study on Factors affecting Financial performance of Indian Banking Sector

2020 ◽  
Vol 7 (2) ◽  
pp. 9-16
Author(s):  
Ritu Bajaj ◽  
Anshu .
Keyword(s):  
Financial Performance ◽  
Interest Rates ◽  
Commercial Banks ◽  
Banking Sector ◽  
Performance Indicator ◽  
Research Work ◽  
Exploratory Research ◽  
Factors Affecting ◽  
Macroeconomic Variables

In India there are different sectors which play the major role of accelerator in the growth of Indian economy. In this study, the area of focus is financial transactions sector specially banking sector which plays a momentous role in the economic growth by regulating and controlling the demand for and supply of money. The Indian banking sector supports the fastest growing economy of the world but it is grappling with multiple challenges. This research work analyzes the different variables that affect the financial performance of scheduled commercial banks in India and establish the relationship between selected macroeconomic variables and financial performance indicator. It also highlights the role of banking in changing economic scenario of India. The present study is empirical by nature. Descriptive cum exploratory research design has been used in this study. It has been found that GDP, CPI, exchange rate and lending interest rates are significant macroeconomic variables for determining the financial performance of scheduled commercial banks in India. It has been revealed that long term relationship exists between the selected macroeconomic variables and financial performance variables.

scholarly journals The Effect of Branchless Banking Strategy on the Financial Performance of Commercial Banks in Kenya

2017 ◽  
Vol 8 (4) ◽  
pp. 167 ◽  
Author(s):  
Gift Kimonge Dzombo ◽  
James M. Kilika ◽  
James Maingi
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Banking Sector ◽  
Secondary Data ◽  
Exploratory Research ◽  
Electronic Banking ◽  
Economic Activities ◽  
Significance Level ◽  
Negative Effect ◽  
The Individual

The Banking sector acts as the life blood of modern trade and economic development. Commercial banks influence, facilitate and integrate the economic activities like resources mobilization, poverty elimination, production, and distribution of public finance. The financial performance of commercial banks has great implications in the financial sector and in the country at large, and will still remain an important subject of concern by all the stakeholders in the banking industry. In the last two decades, a lot of banking innovation has taken place in order to improve commercial banks financial performance. Branchless banking which involves the use of agency banking and electronic banking channels in the distribution of banking products and services is one such innovation. This study purpose was to evaluate the effect of branchless banking on the financial performance of commercial banks in Kenya. The specific objectives of the study were to analyze the individual effects of agency banking and electronic banking channels on the financial performance of commercial banks in Kenya and the combined effect of both agency and electronic banking on the financial performance of commercial banks in Kenya. The study adopted an exploratory research design. A survey of all the 42 licensed commercial banks in Kenya was done. Both primary and secondary data on branchless banking and financial performance of banks was obtained from the individual commercial banks, Central Bank of Kenya banking annual supervision reports respectively. Return on Assets (ROA) was used as the main indicator of commercial banks financial performance. The amount of investment in agency and electronic banking was used as indicator for agency and electronic banking. Data analysis was done using SPSS and STATA statistical softwares. Descriptive statistics, diagnostic tests and tests of hypothesis were done. Data was presented using tables and charts. Study findings indicated that when used in isolation; both agency and electronic banking had a significant negative effect on the financial performance of commercial banks at 5 percent significance level. However, when agency and electronic banking channels were used together as a multichannel strategy, they had a significant positive effect on bank’s financial performance at 5 percent significance level. The study recommends that for positive returns, commercial banks should invest in both agency and electronic banking as a multichannel strategy since these channels are complimentary to each other.

scholarly journals Affordable Credit Resources to Implement Investment Projects in Industry of Russia

2020 ◽  
Vol 17 (4) ◽  
pp. 24-35
Author(s):  
V. A. Eremkin
Keyword(s):  
Interest Rates ◽  
Commercial Banks ◽  
Banking Sector ◽  
Credit System ◽  
Investment Projects ◽  
Industrial Enterprises ◽  
Low Interest Rates ◽  
The Russian Federation ◽  
The Impact

Raising loan finance by industrial enterprises for the development of their investment projects is an important factor for economic growth in Russia. Due to this the problem of credit resource affordability for Russian business becomes more and more topical. The article analyzes possibilities of credit affordability regulation for industrial enterprises by tools of monetary policy of the Central Bank of the Russian Federation. The author aims at indentifying the current problems of the credit system for industrial enterprises and finding the key lines in its improvement. Within the frames of the research the author estimates the impact of high and low interest rates on the volume of industry crediting, analyzes the structure of giving credits to non-financial organizations and studies the problem of long cash affordability for realizing investment projects in industry. The article also investigates the asset concentration in the banking sector and shows the higher role of state and the diminishing number of commercial banks and their branches. Certain important lines of development were identified, which in the future could determine the situation in industry crediting in Russia. Finding of the research can be used for devising the state strategy of developing the system of industry crediting in Russia.

scholarly journals Competition in the Georgian banking sector and its impact on the credit policy of commercial banks

2021 ◽  
Vol 342 ◽  
pp. 08003
Author(s):  
George Abuselidze ◽  
Mariam Sharabidze
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Commercial Banks ◽  
Banking Sector ◽  
Current Situation ◽  
Competitive Environment ◽  
Credit Policy ◽  
The Impact ◽  
The Relationship

Based on the role of banking sector in the development of the country’s economy, we consider it important to study the current situation in this sector. The existence of a competitive environment ensures the efficient functioning of the banking sector. The aim of the study is to estimate the competitive environment in the banking sector, to determine the relationship between competition and interest rates. The research is based on the use of different economic models and indexes. Competition in the banking sector is studied on the example of Georgian banking sector, for that we used HHI Net Loans and H-statistic indicators. The study analyses the impact of competition in the banking sector on the net interest income and interest rate in the same sector.

scholarly journals Comparative Analysis of Banking System Profitability in Western Balkan Countries

2019 ◽  
Vol 2 (2) ◽  
pp. p33 ◽  
Author(s):  
Qazim Tmava ◽  
Fahredin Berisha ◽  
Milaim Mehmeti
Keyword(s):  
Comparative Analysis ◽  
Interest Rates ◽  
Commercial Banks ◽  
Direct Investment ◽  
Banking Sector ◽  
Banking System ◽  
Return On Assets ◽  
Return On Equity ◽  
Macroeconomic Variables ◽  
Balkan Countries

The aim of this paper is to analyze the profitability of the banking sector in the Western Balkan countries. (Note 1) This paper reviews return on assets (ROA) as an indicator of profit and return on equity (ROE) as an indicator of profitability in the banking systems of the respective countries, as well as some other macroeconomic variables that influence them. The main objective of this study is to identify the specific and macroeconomic variables of this industry, that have an impact on the profitability of commercial banks operating in the Western Balkan countries during the 2008-2015 period. Specifically, this paper addresses external indicators (gross domestic product, remittances, foreign direct investment, unemployment), and industry and bank specific indicators (assets, loans, loan-to-deposit ratio, non performing loans and interest rates) that affect the profitability of the banking system in respective countries. Therefore, according to the data generated during the research and the literature review, the profitability of banks measured by the ROA and ROE indicators, regarding the analyzed countries, turns out to be extremely low, especially compared to EU countries where they strive.

scholarly journals The Role of Governance Interaction with Customer Service in Improving Banking Financial Performance

2020 ◽  
Vol 15 (2) ◽  
pp. 67
Author(s):  
Orooba Rashid Ali Badran
Keyword(s):  
Corporate Governance ◽  
Customer Satisfaction ◽  
Financial Performance ◽  
Customer Service ◽  
Commercial Banks ◽  
Theory And Practice ◽  
Exploratory Research ◽  
Design And Synthesis

Customer satisfaction is one of the most important factors in business, when it comes to commercial banks, customer satisfaction level differentiates one bank from another, thus measuring customer satisfaction is exceedingly important. Profitable business cannot exist without satisfied customers, especially in service-oriented industries. Customer satisfaction is an important step to gain customer loyalty. The banking corporate governance is known to improve bank financial performance and value, by reducing the level of expropriation of the company’s assets done by the management, while the satisfaction of the external customers leads to retain customers and add new customers. Banking governance regulates the mechanisms and practices of the banking service engines and oriented them towards effective customer’s satisfaction investigation.  This lead to wards improved banking financial performance, more of previous studies lack to concepts and tools that are used to transform the ideas and theories of improving the quality of banking performance into actual productive practices. From this point, the study attempts to bridge this gap by disclosure the interactive role of banking governance in effectively linking theory and practice in improving the quality of banking financial performance. The paper problem was summarized with the question: to what extent can be interaction of customer services with corporate governance in improving the banking overall financial performance of the Iraqi commercial banks? The study pursues in the design and synthesis and analysis methods, deductive and inductive approach. The study use the analysis and synthesis supported by theoretical evidence in its theoretical part, and used the analysis and conclusion supported by statistical techniques in its practical part, the study was conducted at the sample of commercial banks at Basra Governorate, the study followed the method of exploratory research, using two tools to collected data, the first tool, checklist to assess the overall performance of the banks in question, the size of the respondent sample was 40 individuals and the second tool is a questionnaire with sample size (60 cases), in the light of the analysis the results, conclusions and recommendations were determined.

scholarly journals Role of macroeconomic factors predicting financial performance of commercial banks in Nepal

2021 ◽  
Vol 6 (1) ◽  
pp. 39-52
Author(s):  
Prakash Kumar Gautam ◽  
Tenish Gautam
Keyword(s):  
Financial Performance ◽  
Unemployment Rate ◽  
Commercial Banks ◽  
Empirical Studies ◽  
Random Effect ◽  
Random Effect Model ◽  
Secondary Data ◽  
Macroeconomic Factors ◽  
Macroeconomic Variables

Purpose: This study analyzes the effect of macroeconomic indicators such as domestic products, interest rate, inflation rate, and unemployment rate on the financial performance of commercial banks in Nepal. Design/Methodology: Five top commercial banks based on the financial performance were selected with stratified sampling, with secondary data of ten years. Hausman test was used to examine the endogeneity issue in the predictor variables and the effect of predicators on financial performance were estimated using OLS estimation (random effect model). Findings: The study result revealed significant influence of macroeconomic factors except the unemployment rate for estimating ROE of commercial banks in Nepal while no significant impact was revealed for ROA. Among the significant variables, GDP contributes more in predicting the financial performance of commercial banks in Nepal. Implication: As the study found significant role of macroeconomic variables to estimate ROE, bank administrators, government officials, and investors can focus in such variables, especially in GDP for competitive financial performance. They need to develop products based on macroeconomic variables. Besides, this study finds and tries to mitigate the gap in findings of previous empirical studies. Originality/value: This study contributes to the literature on macroeconomic determinants predicting financial performance of banks, more specifically in finding the gap in determining ROA and ROE within the country specific issue.

Measurement of Vulnerability of Financial Portfolio of Sharia Commercial Banks by Cardona Method

2017 ◽  
Vol 9 (2) ◽  
pp. 109
Author(s):  
Paulina Harun ◽  
Atman Poerwokoesoemo
Keyword(s):  
Commercial Banks ◽  
Quantitative Research ◽  
Banking Sector ◽  
Banking Industry ◽  
Policy Makers ◽  
Factors Affecting ◽  
Section Data ◽  
Initial Stage ◽  
The Face ◽  
Asset Portfolio

his study aims to: (1) to know and analyze the extent of volatility (vulnerability) of sharia banking industry in Indonesia in the face of competition (2) to know and analyze factors affecting vulnerability of sharia commercial banks; (3) to know and analyze the extent of sustainable development of sharia banking industry to Indonesia's economic development.The research conducted to measure the vulnerability (volatility) of proto folio of syariah bank using observation period 2015, and the data used is cross section data. The research design used in this research is quantitative research, using asset dimension (asset portfolio, liability portfolio, equity portfolio) and stressor (pressure, including: credit risk, market risk, and liquidity risk).The activity plan of this research is: in the initial stage of conducting theoretical study related to the vulnerability related to banking especially BUS; The next step is to determine the asset and stressor dimensions associated with the BUS; Further determine the indicators related to assets and stressors; The next step performs calculations to determine the index of each BUS as well as the dimensions that affect the vulnerabilities faced by each BUS.Target expected outcomes can be generated from this research is: for the object of research (BUS) provide a solution for BUS to deal with and overcome the vulnerabilities encountered and policies that must be done. For policy makers, the results of this study are expected to provide input in decision-making and other policies.Measurement of vulnerability to be performed related to banking operations in the face of competition and the continuity of BUS in Indonesia. The outcomes of this study are expected to be included in Bank Indonesia journals, the selection of this journal is based on studies conducted in the banking sector, especially BUS in Indonesia.

scholarly journals Assessing the Impact of Bank Concentration and Liquidity of Refah Bank Branches on Profitability during the Period1383-190

2014 ◽  
Vol 4 (1) ◽  
pp. 248
Author(s):  
Hossin Ostadi ◽  
Nastran Monsef
Keyword(s):  
Commercial Banks ◽  
Bank Capital ◽  
Factors Affecting ◽  
Bank Branches ◽  
Independent Variables ◽  
Bank Deposits ◽  
The Impact ◽  
Bank Concentration ◽  
Research Period

Profitability is an important factor to show this articledoeswhat is the role of the intermediary bank to collect your savings and allocation of loans.  Given the importance of profitability indicators in this study, the factors affecting the profitability of commercial banks in Iranare analyzedwith emphasis on the degree of centralization and bank deposits. Dependent variable is indicators of profitability (ROE, ROA) and bank deposits, bank size, bank capital, focus on liquidity and banking requirements are independent variables. Correlation analysis and OLS regression are used and the research period is 1381 to 1390 that the country's territory where bank branches.Our results indicate that the effect of bank size on profitability is positive and the increase in bank size on profitability is increased. Impact on the profitability of bank deposits is positive, ie increasing the profitability of bank deposits increased. Finally, the impact of bank concentration on profitability is positive. Increasing the bank's focus profitability increases. Moreover, the results adversely affect the liquidity of the index is profit. 

scholarly journals Financial Performance and Income Diversity: Does Ownership Matter? Evidence from Vietnamese Commercial Banks

2020 ◽  
Vol 12 (8) ◽  
pp. 77
Author(s):  
Tin H. Ho
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Banking Sector ◽  
Stock Exchange ◽  
Real Estate Market ◽  
State Ownership ◽  
Annual Data ◽  
Operating Income ◽  
Panel Regressions ◽  
Credit Shocks

In the context of the sharp development of the Vietnamese stock market in recent years, financial performance of listed firms is drawing the attention of investors, particularly in banking industry. Moreover, the harmony of income diversity or reducing the relying on traditional activities of commercial banks is thriving in the world and strongly influence on Vietnam’s banking, especially when the outbreak of COVID-19 worldwide may result in the freeze of real estate market, which leads to devaluate collaterals as well as the risk of non-performing loans, so-called “credit shocks”. This paper, therefore, examines the impacts of income diversity on financial performance of Vietnamese commercial banks in the period from 2007 to 2019. To conduct this study, annual data are collected of 26 commercial banks, listed in Ho Chi Minh Stock Exchange (HOSE), Ha Noi Stock Exchange (HNX), UPCoM and OTC. The research develops an exploratory model reflecting financial performance of the banks in relation to their income diversity and analyzes data using panel regressions. The results show that there is no relationship between financial performance and income diversity due to its low proportion in total operating income. However, the state ownership makes stronger this relationship despite the small impacts. The findings are expected to add the gap in the existing literature, lacking of investigating the impacts of market power on bank income diversity, and the moderating role of state ownership in this relation in Vietnamese banking sector, which is ignored or opposite in most recent studies. Thereby, the paper also gives some useful implications for investors, bank managers as well as policy makers to catch up the market fluctuations.

Sign in / Sign up

Export Citation Format

Share Document