scholarly journals The effect of internal risks on the performance of Jordanian commercial banks

Accounting ◽  
2021 ◽  
Vol 7 (7) ◽  
pp. 1819-1824 ◽  
Author(s):  
Ahmad Alkhazali ◽  
Ghaith N. Al-Eitan ◽  
Hayel Al-serhan ◽  
Tareq O. Bani-Khalid ◽  
Ahmad A. Al-Naimi
Keyword(s):  
Credit Risk ◽  
Financial Performance ◽  
Commercial Banks ◽  
Stock Exchange ◽  
Liquidity Risk ◽  
Negative Influence ◽  
Financial Leverage ◽  
Additional Risk ◽  
Future Studies ◽  
Amman Stock Exchange

This study mainly aimed to examine the effect of internal risks on the financial performance of the Jordanian commercial banks. The study sample comprised the entire commercial banks that are included in the Amman Stock Exchange (ASE) spanning the period from 2009 to 2019. The study formulated four hypotheses, which are related to the effects of liquidity risk and leverage risk on the bank’s performance, proxied by ROA and ROE. Based on the results, liquidity risk did not have a significant effect on both ROA and ROE, while leverage risk did not have a significant effect on ROA, but it did on ROE. It can thus be concluded that the use of financial leverage should be taken into consideration because of its negative influence on the banks’ financial performance, specifically on the shareholders’ returns. It is recommended that future studies examine the effect of additional risk types, like credit risk and operational risk on the performance of banks.

scholarly journals The effect of liquidity risk on the performance of banks: Evidence from Jordan

Accounting ◽  
2022 ◽  
Vol 8 (2) ◽  
pp. 217-226 ◽  
Author(s):  
Mohammed AL-Ardah ◽  
Saleh K. Al-Okdeh
Keyword(s):  
Statistical Analysis ◽  
Financial Performance ◽  
Commercial Banks ◽  
Stock Exchange ◽  
Liquidity Risk ◽  
Survey Method ◽  
Working Capital ◽  
Return On Assets ◽  
Investment Ratio ◽  
Amman Stock Exchange

This study aimed to determine the impact of liquidity risk on financial performance of Jordanian banks, where liquidity risk was measured by (Liquidity ratio, net working capital, cash and investment ratio to total deposits), and financial performance was also measured through the index (return on assets) and the modifying variable (bank size) measured through the natural logarithm of total assets was also added. To achieve the objectives of the study, the analytical quantitative approach was adopted. The study community consisted of all 13 commercial banks listed on the Amman Stock Exchange. All banks in the study community were selected as a study sample using the comprehensive survey method, and the statistical analysis program (SPSS) was used to test the study hypotheses. Based on the results of the statistical analysis, it was found that there was an impact of liquidity risk on financial performance measured by return on assets in Jordanian commercial banks listed on Amman Stock Exchange, and there was an impact for each of (current liquidity ratio, net working capital, cash and investment ratio to total deposits) on financial performance measured by return on assets in Jordanian commercial banks listed on Amman Stock Exchange. It was also found that the size of the bank contributes to modifying the effect of liquidity risk on financial performance measured by return on assets in Jordanian commercial banks listed on Amman Stock Exchange. The study concluded a set of recommendations, the most important of which are: commercial bank administrations should increase interest in exploiting their liquidity within acceptable risk limits to reach optimal ratios for financial performance by balancing the returns to be achieved with the potential risks of such expenses in a way that ensures the positive impact of liquidity risk on the financial performance of those banks.

scholarly journals The The Impact of Liquidity, Credit, and Financial Leverage Risks on Financial Performance of Islamic Banks: A Case of Sudanese Banking Sector

2020 ◽  
Vol 2 (2) ◽  
pp. p59
Author(s):  
Ahmed Nourrein Ahmed Mennawi
Keyword(s):  
Credit Risk ◽  
Financial Performance ◽  
Banking Sector ◽  
Negative Impact ◽  
Liquidity Risk ◽  
Positive Influence ◽  
Islamic Banks ◽  
Financial Leverage ◽  
Loan Financing ◽  
The Impact

This study aims to investigate the impact of liquidity, credit, and financial leverage risks on the financial performance of Islam banks in Sudan during the period of 2008 - 2018. Panel dataset of 143 observations from (13) banks has been used in this study. Two models of ROA and NPM have been constructed using robust random effects estimates for testing the study hypotheses. The independent variables consist of liquidity and credit risks plus the financial Leverage ratio. Credit risk that measured by nonperformance of loan (financing) and provision of loan (financing) loss ratios; while the liquidity risk measured by cash to deposits ratio, liquid assets to total assets ratio and total loan (financing) to total deposits ratio. The financial performance of Islamic banks in Sudan measured by the ratios of return on assets and net profit margin. The results reveal that the credit risk and financial leverage have significant and negative impact on the financial performance of Islamic banks in Sudan, whereas the liquidity risk generally found to be insignificant. Despite that, the liquidity risk in term of liquid assets to total assets ratio provides a significant and positive influence on the financial performance of Sudanese banks. Finally, the importance of this study is that it touches the most significant types of risks that Sudanese Islamic banks face during their operational cycles.

scholarly journals The Impact of Capital Structure on Jordanian Banks Performance

2021 ◽  
Vol 10 (1) ◽  
pp. 35
Author(s):  
Rania Al Omari
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Commercial Banks ◽  
Return On Investment ◽  
Stock Exchange ◽  
Return On Assets ◽  
Return On Equity ◽  
Total Debt ◽  
Amman Stock Exchange ◽  
The Impact

Due to the great importance of the financing structure of banks, the impact of capital structure on the financial performance of banks listed on the Amman Stock Exchange has been examined. To achieve the objectives of this study, we have followed the experimental approach. The study relied on financial variables. The Capital Structure has been measured by the ratios of total debt to total assets and total debt to total equity. Both ratios are independent variables. The dependent variable in this study is the financial performance of banks represented by the ratio of return on assets, the ratio of return on equity, the ratio of return on investment, and the ratio of return on share. The study community and sample consisted of twelve commercial banks listed on Amman Stock Exchange (ASE) during the period (2007-2017). Statistical Package for the Social Sciences (SPSS) software was used in testing of research hypotheses. The most important results are that the capital structure has an impact on return on assets (ROA), while it has no impact on return on equity (ROE), return on investment (ROI) and earnings per share (EPS) in Jordanian commercial banks.

scholarly journals Risk Management and the Financial Performance of Banks in Nigeria

2020 ◽  
Vol 11 (5) ◽  
pp. 115
Author(s):  
Henry Inegbedion ◽  
Bello Deva Vincent ◽  
Eseosa Obadiaru
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Performance ◽  
Asset Management ◽  
Commercial Banks ◽  
Generalized Method Of Moments ◽  
Liquidity Risk ◽  
Capital Adequacy ◽  
Risk Capital ◽  
Ex Post

The study examined “risk management and financial performance of banks in Nigeria” with focus on commercial banks. The broad objective of the study was to ascertain the effect of risk asset management on the optimal financial performance of commercial banks in Nigeria. The study is a longitudinal survey, so the ex-post facto research design was applied. Research data were analysed using generalized method of moments (GMM) and vector Error Correction Model, after testing and adjusting the data for stationarity and Cointegration.The research findings were: Banks’ profitability is significantly influenced in the short run by liquidity risk and in the long-run by credit risk, capital adequacy risk, leverage risk and liquidity risk. Furthermore, profitability measured by ROaA was found to be positively related to liquidity risk but negatively related credit risk. Arising from the findings, there is the need for effective risk management, especially credit, capital adequacy, leverage and liquidity risks, to enhance the profitability of banks. By helping to enhance the going concern of banks, risk management will help to reduce retrenchment and unemployment and hence help to forestall the attendant social vices.

scholarly journals Risk Management & Financial Performance of Commercial Banks in Pakistan

2020 ◽  
Vol 9 (1) ◽  
pp. 87-103
Author(s):  
Ghulam Saghir ◽  
Emad Tabassam Ch
Keyword(s):  
Panel Data ◽  
Credit Risk ◽  
Financial Performance ◽  
Financial Institutions ◽  
Cross Sections ◽  
Commercial Banks ◽  
Financial Risk ◽  
Developing Economies ◽  
Liquidity Risk ◽  
The Impact

The main objective of this study is to find out how, the two different types of risks,i.e. Liquidity Risk & Credit Risk,affect the overall profitability/financial performance of commercial banks in Pakistan. We used methods that were applicable on a panel data for long run and short run time specifications. Thirty-three scheduled banks listed with the SBP,as of December 2018 have been used for the purpose of the data analysis. The panel data that is used for this study stretches across a period of 10 years,with 33 cross sections. The findings of this current study revealed that the financial performance of the banks present in Pakistan is negatively,and significantly influenced by the credit risk. In addition to this, it was revealed that the lesser the non-performing loans, the lower the risk factor that is experienced. The financial risk comprising of credit risk and liquidity risk tends to have a significantly robust impact on the overall enactment of the commercial banks in Pakistan. This study will prove beneficial for the top management of the financial institutions developing economies, as it will enhance their existing knowledge regarding the impact of financial risk, which will eventually infiltrate into the intensity and quality of the financial performance of the banks. This will also enable banks, and other financial institutions to involve all the relevant stakeholders,in order to determine how they can minimize the effects of the financial risk,so as to maximize the overall returns.

scholarly journals The Effect of Liquidity Risk and Credit Risk on the Bank Performance: Empirical Evidence from Iraq

2021 ◽  
Vol 3 (1) ◽  
pp. 58-67
Author(s):  
Noor Hashim Mohammed Al-Husainy ◽  
Hamid Mohsin Jadah
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Fixed Effects ◽  
Stock Exchange ◽  
Liquidity Risk ◽  
Bank Performance ◽  
Bank Profitability ◽  
Dynamic Panel Model ◽  
Credit Risks ◽  
Generalized Methods Of Moments

The main objective of this paper is to study the effect of liquidity risk and credit risk on the profitability of commercial banks in Iraq. The sample is 18 private commercial banks listed in Iraqi Stock Exchange for six years for the period 2010 to 2020. This paper especially focuses on Iraqi commercial private Banks. The dependent variable is bank performance is measured by return on asset (ROA) and independent variables are, liquidity risks, credit risks. This paper employs a dynamic panel model, using Generalized Methods of Moments (GMM) panel data regression of Fixed-effects models. Furthermore, the findings illustrate that liquidity risk has a positive significant association with bank profitability. Meanwhile, credit risk has an adverse significant association with bank profitability. This paper contributes to the debate of risk management as well as determinants of bank performance from several dimensions. First, this study is the first to investigate the impacts of liquidity risks on bank performance in Iraq. Secondly, this is the first study that investigates the impacts of credit risks on bank performance in Iraq. It is hoped that the result of this paper can fill the gap of the literature on the association between liquidity risks, credit risks, and bank performance.

scholarly journals Financial Performance of Commercial Banks in Jordan: Application of the CAMELS Model

Prosperitas ◽  
2021 ◽  
Vol 8 (2) ◽  
pp. 1-9
Author(s):  
Saleh Jawarneh
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Stock Exchange ◽  
Capital Adequacy ◽  
Basel Committee ◽  
Management Efficiency ◽  
Market Risks ◽  
Amman Stock Exchange ◽  
Earning Ability ◽  
Asset Quality

The study aims to analyse and rank the financial performance of Jordanian commercial banks using the elements of the CAMELS model. The study relies on a sample of 12 Jordanian commercial banks listed on the Amman Stock Exchange during the period 2016–2020. The study used variables included in the CAMELS model, namely: capital adequacy, asset quality, management efficiency, profitability, liquidity, and sensitivity to market risks. The research results indicate that Jordanian commercial banks enjoy high Capital Adequacy Ratios that exceed the minimum required by the Central Bank of Jordan and the Basel Committee. Jordanian banks have a strong sensitivity to market risks; therefore, they can control market risks and face any risk to which they may be exposed as well as the variety of the securities invested in these banks. Jordanian commercial banks are also characterized by a good earning ability. On the other hand, Jordanian commercial banks have a weak asset quality, and they also maintain weak and insufficient liquidity ratios to meet any unforeseen needs. These banks also show weak management efficacy, and this rating reflects weak management in expense controls.

scholarly journals PENGARUH PENERAPAN MANAJEMEN RISIKO TERHADAP KINERJA KEUANGAN SEKTOR PERBANKAN PERIODE 2013-2017

2020 ◽  
Vol 10 (1) ◽  
pp. 102
Author(s):  
Deny Ismanto
Keyword(s):  
Interest Rate ◽  
Credit Risk ◽  
Financial Performance ◽  
Interest Rates ◽  
Foreign Exchange ◽  
Stock Exchange ◽  
Liquidity Risk ◽  
Operational Risk ◽  
Interest Rate Risk ◽  
Rate Risk

This study discusses liquidity risk, credit risk, operational risk, and interest rates risk on finance performance at the National Private Foreign Exchange Commercial Bank listed on the Indonesia Stock Exchange for the period 2013-2017. In this study, the independent variables are liquidity risk, credit risk, operational risk and interest rate risk and the dependent variable is financial performance. The object of research is the National Private Foreign Exchange Private Bank listed on the Indonesia Stock Exchange for the period 2013-2017. The population in this study was 23 banks. The sampling technique using purposive sampling method, based on research criteria, the research sample won 11 banks. The analysis tool used is panel regression data with eviews 6. The data used in this study is secondary data obtained from the official website pages of the Indonesia Stock Exchange and Bank Indonesia. Partially, the results of the study indicate that negative liquidity risk is not significant to finance, negative credit risk is significant to finance, operational risk is significantly negative to financial performance, and interest rates increase significantly positive to finance. Simultaneously liquidity risk, credit risk, operational risk and interest rate risk affect financial performance.

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