scholarly journals Simultaneous adjustment of bank capital and risk: Evidence from the Indonesian commercial banks

Accounting ◽  
2020 ◽  
pp. 637-648
Author(s):  
Lutfi Lutfi ◽  
Emanuel Kristijadi ◽  
Mellyza Silvy
Keyword(s):  
Commercial Banks ◽  
Bank Capital ◽  
Simultaneous Adjustment

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 The impact of capital ratio on lending of EU banks – the role of bank specialization and capitalization

Equilibrium ◽  
2016 ◽  
Vol 11 (1) ◽  
pp. 43 ◽  
Author(s):  
Małgorzata Olszak ◽  
Mateusz Pipień ◽  
Sylwia Roszkowska
Keyword(s):  
Commercial Banks ◽  
Robust Estimator ◽  
Bank Capital ◽  
Savings Banks ◽  
Cooperative Banks ◽  
Lending Activity ◽  
The Impact ◽  
The Relationship

In this paper we aim to find out whether bank specialization and bank capitalization affect the relationship between loans growth and capital ratio, both in expansions and in contractions. We hypothesize that the impact of bank capital on lending is relatively strong in cooperative banks and savings banks. We also expect that this effect is nonlinear, and is stronger in “low” capital banks than in “high” capital banks. In order to test our hypotheses, we apply the two-step GMM robust estimator for data spanning the years 1996–2011 on individual banks available in the Bankscope database. Our analysis shows that lending of poorly capitalized banks is more affected by capital ratio than lending of well-capitalized banks. Loans growth of cooperative and savings banks is more capital constrained that lending of commercial banks. Capital matters for the lending activity in contractions only in the case of savings and “low” capital banks.

scholarly journals Market structure, institutional quality and bank capital ratios: evidence from developing countries

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Oyebola Fatima Etudaiye-Muhtar ◽  
Zayyad Abdul-Baki
Keyword(s):  
Market Structure ◽  
Risk Taking ◽  
Commercial Banks ◽  
Institutional Quality ◽  
Bank Capital ◽  
Content Type ◽  
Regulatory Quality ◽  
Capital Ratios ◽  
Excessive Risk Taking ◽  
Excessive Risk

PurposeThis paper investigates the role of market structure and institutional quality in determining bank capital ratios in developing economies.Design/methodology/approachThe generalised methods of moment technique is used to control for auto-correlation and endogeneity in a sample of 79 publicly listed commercial banks. The study period is between 2000 and 2016.FindingsResults show that market structure (proxied with bank competition) as well as institutional quality (regulatory quality) lowers bank capital in the sampled banks. This suggests that banks operating in less competitive markets with good regulatory quality do not need to engage in excessive risk-taking activities that would necessitate holding increased level of capital. Furthermore, the interaction of competition and regulatory quality reinforces the main findings, suggesting the importance of the two variables in determining bank capital ratio.Research limitations/implicationsResearch has limitation in that the study investigated publicly listed commercial banks, the findings may not be applicable to non-listed banks.Practical implicationsTaking into cognisance the developing nature of the banking system in Africa, the findings from this study imply that the maintenance of an improved regulatory quality in an environment where healthy competition exists would encourage banks to hold capital ratios appropriate for their level of banking activities, that is, the banks would not engage in excessive risk-taking activities.Originality/valueThis is one of the first papers that examine the effect of market structure and institutional quality on bank capital ratios in developing countries that have bank-based financial systems.

The Role of Bank Liquidity and Bank Risk in Determining Bank Capital: Empirical Analysis of Asian Banking Industry

2020 ◽  
Vol 23 (03) ◽  
pp. 2050020 ◽  
Author(s):  
Faisal Abbas ◽  
Shahid Iqbal ◽  
Bilal Aziz
Keyword(s):  
Emerging Economies ◽  
Commercial Banks ◽  
Banking Industry ◽  
Negative Association ◽  
Bank Risk ◽  
Standard Errors ◽  
Bank Capital ◽  
Short Run ◽  
The Impact

This study provides new insights about how bank liquidity and bank risk have influenced the capital ratio of commercial banks operating in Asia’s emerging economies after the financial crisis 2007–2008. The data were collected for 377 banks from the Bankscope database covering the period of eight years between 2010 and 2017. The linear regression panel-corrected standard errors approach is used to find consistent estimators. The results of the overall sample and medium-sized banks regression revealed a positive relationship between bank liquidity and bank capital ratio, whereas the liquidity and bank capital ratio of large commercial banks have a negative association. The impact of liquidity on bank capital ratio is positive but insignificant in the case of smaller banks. The impact of bank risk on bank capital ratio is negative in the case of smaller and medium-sized banks, whereas the association is found positive in the case of larger and overall banks data results in short run, other things remain unchanged. The findings have valued information for researchers, analysts, managers, and policymakers.

scholarly journals KARAKTERISTIK DAN FUNGSI INTERMEDIASI PERBANKAN DI INDONESIA

2012 ◽  
Vol 15 (1) ◽  
pp. 61-83
Author(s):  
Renniwaty Siringoringo
Keyword(s):  
Capital Structure ◽  
Credit Risk ◽  
Ownership Structure ◽  
Commercial Banks ◽  
Multivariate Regression ◽  
Total Effect ◽  
Bank Capital ◽  
Level Data ◽  
The Capital Structure

This paper analyzes the influence of ownership and specific characteristic of banks on the capital structure and the intermediation function of commercial banks in Indonesia. Using multivariate regression on bank level data of 2006-2009, the result shows the ownership structure, profitability, size, and management expense affect the bank capital structure, with a total effect of 50.14%. Towards the bank intermediation, with a total effect of 27.01%, the ownership structure, profitability, bank size, credit risk, expense management and capital structure influence the banks intermediation function.Keywords : Ownership structure, specific characteristic of bank, capital structure and bank intermediation functionJEL Classification: G21, G32

scholarly journals Effects of Bank Capital on Profitability and Credit Risk: The Case of Vietnam's Commercial Banks

2016 ◽  
Vol 23 (04) ◽  
pp. 117-137
Author(s):  
Vinh Nguyen Thi Hong ◽  
Thao Le Phan Thi Dieu
Keyword(s):  
Moral Hazard ◽  
Credit Risk ◽  
Method Of Moments ◽  
Commercial Banks ◽  
Generalized Method Of Moments ◽  
Bank Risk ◽  
Bank Capital ◽  
Negatively Associated

This paper seeks to examine the effects of bank capital on profitability and credit risk of 30 Vietnam’s commercial banks from 2007 to 2014. Using the system generalized method of moments (GMM), the paper conducts several tests on the moral hazard and regulatory hypotheses on the relationships among bank capital, profitability, and credit risk. With no regard to other determinants, its results indicate that the effects are evident, i.e. bank risk is found to impact differently on bank returns, and it is also negatively associated with credit risk of commercial banks in Vietnam.

scholarly journals Impact of credit risk (NPLs) and capital on liquidity risk of Malaysian banks

2017 ◽  
Author(s):  
Yaman Hajja
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Positive Relationship ◽  
Liquidity Risk ◽  
Dynamic Panel Data ◽  
Bank Capital ◽  
Dynamic Panel ◽  
Macroeconomic Variables ◽  
The Impact ◽  
The Relationship

We investigate the relationship between bank liquidity risk and credit risk and the impact of bank capital on liquidity risk. Using 19 Malaysian commercial banks data over 2002-2011 and applying dynamic panel data GMM estimation after controlling for bank-specific and macroeconomic variables, empirical results document a positive relationship between liquidity and credit risk and a non-linear U-shaped relationship between bank capital and liquidity risk.

scholarly journals Peculiarities of ensuring financial sustainability of the Ukrainian banking system

2018 ◽  
Vol 13 (1) ◽  
pp. 184-195
Author(s):  
Olha Vovchak ◽  
Viktoriia Rudevska ◽  
Roksolana Holub
Keyword(s):  
Commercial Banks ◽  
Financial Stability ◽  
Banking System ◽  
Developed Countries ◽  
Equity Capital ◽  
Capital Adequacy ◽  
Financial Sustainability ◽  
Bank Capital ◽  
Strategic Objective ◽  
Capital Ratios

Ensuring and strengthening the financial sustainability of banks is a difficult and not completely resolved task. It is inherent not only to developed countries, it has also be¬come nationally important in Ukraine, which was largely predetermined by the specifics of the domestic banks development. This is explained, in particular, by the banking insti¬tutions’ focus mainly on the relatively short-term activity, the need to work under high risk, resulting from economic and political instability in the country. Therefore, nowa¬days, it is urgent for each Ukrainian bank to focus on the main strategic objective – effec¬tive management and ensuring financial sustainability. The purpose of this study is to assess the current state and identify the features of ensuring financial sustainability of the banking system of Ukraine.It was pointed out in the study that the negative tendency to increase the number of in¬solvent commercial banks during 2012–2017 indicates problems with providing finan¬cial sustainability to commercial banks. The tendencies have been revealed that testify to the problems of the banking system capitalization in Ukraine, which greatly affects its financial stability. Given the analysis of indicators of banks financial sustainability that characterize the bank capital adequacy, the conclusion is made on ambiguous as¬sessment of sufficient level of capitalization, since despite the correspondence of most values of coefficients to the indicators, there is a lack of capitalization of the domestic banking system and equity capital concentration. In general, the results made it pos¬sible to identify trends in the development of capital ratios and financial sustainability indicators and to shape appropriate measures to increase the level of capitalization in order to ensure the financial sustainability of the banking system.

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