scholarly journals THE LIQUIDITY AND PROFITABILITY TRADEOFF OF COMMERCIAL BANKS IN NIGERIA

2021 ◽  
Vol 2 (2) ◽  
pp. 17-26
Author(s):  
O. D. Adegboye
Keyword(s):  
Correlation Coefficient ◽  
Commercial Banks ◽  
Management Strategies ◽  
Secondary Data ◽  
Least Square ◽  
Annual Reports ◽  
Return On Assets ◽  
Coverage Area ◽  
Liquidity Management ◽  
Ordinary Least Square

This study used empirical facts and assessed the trade-off of profitability versus liquidity (and vice versa) for five commercial banks in Nigeria. Multivariate research design, regression analysis, Ordinary Least Square, and correlation coefficient approaches were used to apply quantitative methodologies to data collected. Amongst the population of twenty-two banks, Zenith, First, United Bank for Africa, Guaranteed Trust and Union Banks were chosen as case studies for this study using a purposive sample approach. Secondary data was gathered from their five-year annual reports, which were published between 2015 and 2019. The correlation coefficient was employed to test the hypothesis, which revealed that there was a statistically perfect correlation (positive and negative) between LA (loans), BA (bank advances), and MDI (marketable debt instruments) against PAT (profit after tax) and ROA (return on assets). Furthermore, since banks strive to maintain their current assets, the findings revealed that efficient liquidity management is a key determinant that may boost or impair a bank’s profitability. To avoid future insolvency and bankruptcy, this study recommends that these banks use contemporary and effective liquidity management strategies amid the current post-pandemic environment. In addition, while focusing on the same topic of research, interested scholars should make significant use of a broader data coverage area. 

scholarly journals Performance of deposit money banks and liquidity management in Nigeria

2019 ◽  
Vol 14 (3) ◽  
pp. 152-161
Author(s):  
Adegbola Olubukola Otekunrin ◽  
Gabriel Damilola Fagboro ◽  
Tony Ikechukwu Nwanji ◽  
Festus Femi Asamu ◽  
Babatunde Oluseyi Ajiboye ◽  
...  
Keyword(s):  
Stock Exchange ◽  
Secondary Data ◽  
Least Square Method ◽  
Least Square ◽  
Return On Assets ◽  
Current Ratio ◽  
Liquidity Management ◽  
Ordinary Least Square ◽  
Business Operations ◽  
And Performance

This study examined the performance of selected quoted deposit banks of Nigeria and liquidity management. Secondary data used was extracted from the financial statements of 15 money deposit banks out of population of 17 deposit money banks on the Nigerian Stock Exchange (NSE) for 2012–2017 (six years). The descriptive research design was used. The data collected was analyzed using ordinary least square method (OLS). Liquidity management was measured using capital ratio (CTR), current ratio (CR) and cash ratio (CSR), while performance was measured using return on assets (ROA). Based on the results of the study, liquidity management proxied by capital ratio, current ratio and cash ratio and performance of the firm proxied by return on assets are positively related. The result shows that liquidity management is an essential factor in business operations and consequently leads to business profitability. Hence proper liquidity management helps solve the agency theory problem of agency costs that arise when control of companies is separated from the ownership, whereby managers are able to employ the firm’s resources for personal gains instead of maximizing the value of the firm or the shareholders’ wealth. The value of the firm and the shareholders’ wealth can be maximized through the firm’s profitability via effective and efficient liquidity management.

scholarly journals The Impacts of Liquidity on Profitability in Banking Sectors of Iraq

2017 ◽  
Vol 6 (1) ◽  
pp. 113-121
Author(s):  
Sardar Shaket Ibrahim
Keyword(s):  
Commercial Banks ◽  
Stock Exchange ◽  
Least Square ◽  
Annual Reports ◽  
Return On Assets ◽  
Ordinary Least Square ◽  
Islamic Bank ◽  
Exchange Site ◽  
North Bank ◽  
The Impact

This study examines the influence of liquidity on the profitability of Iraqi commercial banks. Five banks based in Iraq namely: North bank, Iraqi Islamic bank, Sumer bank, Dar Es-Salam bank and Babylon bank randomly selected and analyzed for the current study over the period 2005 to 2013. Moreover,  annual reports of these banks have studied and the main ratios of profitability and liquidity were calculated. These reports are available at Iraqi Stock Exchange site. The variables that were identified as independent for liquidity were, loan deposit ratio, deposit asset ratio and cash deposit ratio, while return on assets as dependent variable for profitability. The Ordinary Least Square (OLS) model used to examine the impact of liquidity on profitability. The study observes that any increase in liquidity ratios as above mentioned will lead return on asset to increase as well. Depending on this study it could be better for Iraqi banks to keep a balance between liquidity and profitability.

scholarly journals The Impact of Liquidity Decision on Managerial Performance: Evidence from Private Commercial Banks in Bangladesh

2021 ◽  
Vol 8 (1) ◽  
pp. 17-24
Author(s):  
Sumi Saha
Keyword(s):  
Commercial Banks ◽  
Return On Investment ◽  
Least Square ◽  
Annual Reports ◽  
Return On Assets ◽  
Managerial Performance ◽  
Return On Equity ◽  
Ordinary Least Square ◽  
Net Profit ◽  
The Impact

This study has examined the impact of liquidity decisions on the managerial performance of ten listed conventional private commercial banks. The required data have been collected from the five years' annual reports of the sample banks and analyzed through formulating different null hypotheses. Findings from the testing of null hypotheses with the use of the ANOVA technique reveal that there is no significant variation of different indicators of liquidity decision as well as the managerial performance of the sample banks. Findings are taken from conducting the multiple regression analysis with ordinary least square (OLS) model also indicate that the indicators of liquidity decision namely current ratio is positively and insignificantly associated with net profit ratio as well as return on equity but negatively and insignificantly associated with return on assets as well as return on investment. Moreover, the networking capital ratio as another indicator of liquidity decision is negatively and insignificantly associated with net profit ratio, return on assets as well as return on equity but positively and insignificantly associated with return on investment of the sample banks over the study period.  

scholarly journals Determinants of Capital Adequacy among the Commercial Banks in Ghana

2020 ◽  
pp. 88-95
Author(s):  
Ernest Somuah Annor ◽  
Fredrick Somuah Obeng ◽  
Nelly Opoku Nti
Keyword(s):  
Commercial Banks ◽  
Fixed Effects ◽  
Banking System ◽  
Secondary Data ◽  
Least Square ◽  
Capital Adequacy ◽  
Annual Reports ◽  
Independent Variables ◽  
Strict Compliance ◽  
Asset Quality

The study examined the determinants of capital adequacy among selected commercial banks in Ghana. Eight banks were sampled for the periods 2009-2016, secondary data was gathered from the annual reports of selected banks as well as the Ghana Banking Survey authored by Price Waterhouse Coopers Ghana (PWC). A balanced panel approach was employed in investigating the determinants of capital adequacy among selected commercial banks in Ghana whilst comparing estimates of pooled OLS, random and fixed effects models and the generalized least square models to ascertain the robustness of the model. The finding suggests that all the independent variables statistically and significantly influence capital adequacy. While non-performing loans negatively relate to CAR, LFTD and ROA positively impact CAR or asset quality. It is recommended that the central bank and various banks operating in Ghana pay attention to strict compliance with the regulatory regimes to keep banks sound and fit to withstand distress and losses which may, in turn, affect the banking system and economy in entirety.

scholarly journals Determinan Suku Bunga dan Likuiditas Bank Terhadap Pertumbuhan Kredit di Indonesia

Jurnal Ecogen ◽  
2020 ◽  
Vol 3 (2) ◽  
pp. 200
Author(s):  
Yeniwati Yeniwati
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Commercial Banks ◽  
Secondary Data ◽  
Least Square ◽  
Bank Credit ◽  
Credit Growth ◽  
Ordinary Least Square ◽  
Banking Community ◽  
The Interest Rate

This study aims to determine the effect of the interest rate (BI rate) on bank credit growth in Indonesia, liquidity on bank credit growth in Indonesia and determine the effect of interest rates and liquidity on bank credit growth in Indonesia. The method used in this study is Ordinary Least Square (OLS) using secondary data from 2009 Quarter I to 2018 Quarter IV. The results of the analysis showed that there was an influence between interest rates on bank credit growth in Indonesia, there was an influence between liquidity on bank credit growth in Indonesia. Together there is an influence between interest rates and bank liquidity on the growth of bank credit in Indonesia. The policy implication of this research is that Bank Indonesia must maintain the benchmark interest rate set in order to trigger an increase in bank credit growth. In addition, Bank Indonesia must monitor the liquidity of commercial banks in Indonesia so that the trust of the banking community is even greaterKeywords : interest rate, Liquidity, Credit

Electronic fraud: an emerging cause of bank failure in Nigerian deposit money banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Folowosele Folarin Akinwale ◽  
Ikpefan Ochei Ailemen ◽  
Isibor Areghan
Keyword(s):  
Deposit Insurance ◽  
Descriptive Analysis ◽  
Secondary Data ◽  
Least Square Method ◽  
Least Square ◽  
Annual Reports ◽  
Content Type ◽  
Ordinary Least Square ◽  
Unethical Practices ◽  
The Impact

Purpose This study aims to review the degree to which fraud and other unethical practices especially in the digital space have affected the Nigerian banking industry both in the past and present, and how it will be a growing concern in the imminent future. The objective of the study was to examine the impact of electronic fraud on the quality of assets and return on assets of Nigerian deposit money banks. Design/methodology/approach The research used secondary data for the periods 2006 till 2018, which were collected from the Nigeria Deposit Insurance Corporation annual reports. Descriptive analysis and the ordinary least square method of regression analysis were used for data analysis. Findings Findings revealed that electronic fraud cases increased progressively over most of the years of study, which can be attributed to the increased bank products that are electronic-based. Originality/value Many of the reviewed literature examined electronic fraud and its impact on bank profitability but this study examined the cause of electronic fraud and what can be done to curtail it.

scholarly journals Pengaruh Capital Adequacy Ratio , Biaya Operasional Pendapatan Operasional dan Net Operational Margin terhadap Financing to Deposit Ratio pada Bank Umum Syariah di Indonesia Tahun 2016-2018

2021 ◽  
Vol 1 (1) ◽  
pp. 27-33
Author(s):  
Moch Fajar Suryo Atmojo ◽  
Nurfahmiyati ◽  
Meidy Haviz
Keyword(s):  
Time Series ◽  
Commercial Banks ◽  
Quantitative Research ◽  
Time Series Data ◽  
Secondary Data ◽  
Equation Model ◽  
Least Square ◽  
Capital Adequacy ◽  
Series Data ◽  
Ordinary Least Square

Abstract. Sharia Banking as an economic sub-system certainly will directly or indirectly have an impact on the development and economic growth of a country. Sharia Commercial Bank (BUS) is a bank that conducts business activities based on sharia principles and in its activities provides services in payment traffic as referred to in Act Number 21 of 2008 concerning Sharia Banking. The health of a bank is very important for all parties involved both the owner, manager (management) of the bank, the banking service user community, monetary authorities, and other parties.This study was conducted to examine the effect of CAR, BOPO, and NOM on Financing to Deposit Ratio (FDR) of Sharia Commercial Banks in Indonesia in 2016-2018. This type of research uses quantitative research with a verification approach. The data used are secondary data taken from the FSA using time series data. Data processing uses Eviews version 7.0 with Ordinary Least Square (OLS) method.The results showed that the CAR variable partially had a negative effect and the BOPO and NOM variables had a positive and significant effect on FDR at Islamic Commercial Banks in Indonesia. From the estimation results obtained R-square of 0.733707, which means 73.37 percent variation of changes in Financing to Deposit Ratio (FDR) of Sharia Commercial Banks is explained by variations in changes in CAR, BOPO, and NOM. While the remaining 26.63 percent explained by other variables not included in the equation model.   Abstrak. Perbankan Syariah sebagai suatu sub sistem ekonomi tentunya baik secara langsung maupun tidak langsung akan memberikan dampak terhadap perkembangan dan pertumbuhan ekonomi suatu negara. Bank Umum Syariah (BUS) adalah bank yang menjalankan kegiatan usahanya berdasarkan prinsip syariah dan dalam kegiatannya memberikan jasa dalam lalu lintas pembayaran sebagaimana dimaksud dalam Undang-Undang Nomor 21 Tahun 2008 tentang Perbankan Syariah. Kesehatan suatu bank merupakan hal yang sangat penting bagi seluruh pihak yang terkait baik pemilik, pengelola (manajemen) bank, masyarakat pengguna jasa bank, otoritas moneter, serta pihak lainnya. Penelitian ini dilakukan untuk menguji pengaruh CAR, BOPO, dan NOM terhadap Financing to Deposit Ratio (FDR) Bank Umum Syariah di Indonesia Tahun 2016-2018. Jenis penelitian menggunakan penelitian kuantitatif dengan pendekatan verifikatif. Data yang digunakan adalah data sekunder yang diambil dari OJK menggunakan data runtut waktu (time series). Pengolahan data menggunakan program Eviews versi 7.0 dengan metode Ordinary Least Square (OLS). Hasil penelitian menunjukkan variabel CAR secara parsial berpengaruh negatif dan variabel BOPO dan NOM berpengaruh positif dan signifikan terhadap FDR pada Bank Umum Syariah di Indonesia. Dari hasil estimasi diperoleh R-square sebesar 0.733707, yang berarti 73.37 persen variasi perubahan pada Financing to Deposit Ratio (FDR) Bank Umum Syariah dijelaskan oleh variasi perubahan pada CAR, BOPO, dan NOM. Sementara sisanya 26.63 persen diterangkan oleh variabel lain yang tidak masuk ke dalam model persamaan.

scholarly journals Assessing Banks Internal and Macroeconomic Factors as Determinants of Non- Performing Loans: Evidence from Nepalese Commercial Banks

2018 ◽  
Vol 3 (1) ◽  
pp. 13-32
Author(s):  
Bishnu Prasad Bhattarai
Keyword(s):  
Commercial Banks ◽  
National Level ◽  
Least Square ◽  
Capital Adequacy ◽  
Economic Factors ◽  
Return On Assets ◽  
Macroeconomic Factors ◽  
Factors Affecting ◽  
Ordinary Least Square ◽  
Capital Adequacy Ratio

This study has attempted to ascertain the factors affecting to non-performing loans in Nepalese commercial banks using a sample of ten commercial banks for the period of 2013-2017 with 50 observations, a balanced set of panel data. The descriptive and causal comparative research designs have been adopted for the study. The dependent variable was non-performing loans, while independent variables included both bank specific factors; bank size, return on assets, total loan and advance to total deposit ratio, capital adequacy ratio and macro-economic factors; real gross domestic product growth rate and inflation. The existence of high levels of NPLs would hinder the benefits to the county through inefficient financial intermediation. Hence, there is a national level responsibility towards banks, to manage the NPL ratio at an acceptable level. Consequently, it is important to identify “what causes NPLs and significance of these factors on NPLs”. Therefore, this study would help to get an insight on the bank specific and macro-economic factors, which affect NPLs in commercial banks and in which magnitude bank specific or macroeconomic factors contribute to NPLs. The estimated ordinary least square (OLS) regression model reveals that the bank specific: ROA, LTD and CAR and macroeconomic factors GDP have significant impact on nonperforming loan in Nepalese commercial banks.

scholarly journals Determinants of capital structure in Nepalese commercial banks

2020 ◽  
Vol 1 (1) ◽  
pp. 50-70
Author(s):  
Lalit Prasad Timilsina
Keyword(s):  
Capital Structure ◽  
Commercial Banks ◽  
Influencing Factor ◽  
Correlation Coefficients ◽  
Secondary Data ◽  
Annual Reports ◽  
Return On Assets ◽  
Total Debt ◽  
Specific Factors ◽  
The Capital Structure

This study examines the determinants of capital structure in Nepalese Commercial Banks. The study is based on secondary data of 16 commercial banks with 112 observations for the period 2011/12 to 2017/18. The total debt to total assets and total debt to total equity were selected as dependent variables while return on assets, bank size, assets tangibility, assets growth and liquidity are the independent variables. The data were collected from annual reports of concerned sample bank. The Pearson's correlation coefficients and regression models are estimated to test the significance and impact of bank specific factors on the capital structure of Nepalese commercial banks. The result shows that banks size and assets tangibility are positively correlated with total debt to total assets whereas return on assets, assets growth and liquidity are negatively correlated with total debt to total assets. Likewise return on assets, bank size, assets tangibility, assets growth and liquidity are negatively correlated with total debt to total equity. It indicates that higher assets growth, return on assets and liquidity lower would be the total debt to total assets and total debt to total equity. Likewise higher the bank size and assets tangibility higher would be the total debt to total assets. This study concludes that return on assets, bank size and assets tangibility are the most influencing factors and assets growth and liquidity are the least influencing factor affecting the capital structure of Nepalese commercial banks.

scholarly journals Determinants of Non-Performing Financing of Mortgage in Islamic Commercial Banks

2020 ◽  
Vol 4 (2) ◽  
pp. 127
Author(s):  
Rofadatul Hasanah ◽  
Dina Fitrisia Septiarini ◽  
Dian Filianti
Keyword(s):  
Commercial Banks ◽  
Time Series Data ◽  
Negative Influence ◽  
Least Square ◽  
Capital Adequacy ◽  
Series Data ◽  
Return On Assets ◽  
Ordinary Least Square ◽  
Capital Adequacy Ratio ◽  
Saturated Sample

 This study aims to determine the effect of Capital Adequacy Ratio, Return on Assets, BI 7-Day Rate, and Inflation towards Non-Performing Financing Mortgages in Islamic commercial banks in Indonesia. The population of this study is the Islamic commercial banks in the period 2015-2019. The sample used is a saturated sample, which uses all Islamic banks as research samples. This research uses a quantitative approach using time series data. All variables use the percentage of growth and show the results of the level stationary so that the technique used is Ordinary Least Square (OLS) regression analysis which is processed using E-Views 10 software. The results of this study indicate partially the Capital Adequacy Ratio and Return on Assets variables have a negative influence significant to Non-Performing Financing Mortgages. While BI 7-Day Rate and Inflation variables do not influence Non- Performing Financing Mortgages. Nonetheless, Capital Adequacy Ratio, Return on Assets, BI 7-Day Rate, and Inflation simultaneously have a significant effect on the Non-Performing Financing of Mortgages in Islamic commercial banks in Indonesia in the period 2015-2019.

Sign in / Sign up

Export Citation Format

Share Document