scholarly journals Stakeholder Engagement: Some Empirical Evidence from a Sample of European Banks

2015 ◽  
Vol 2 (2) ◽  
pp. 11 ◽  
Author(s):  
Giuliana Birindelli ◽  
Mariantonietta Intonti ◽  
Massimo Bilancia ◽  
Maura La Torre ◽  
Martina Malorni
Keyword(s):  
Empirical Evidence ◽  
Stakeholder Engagement ◽  
Banking Sector ◽  
Bank Performance ◽  
Bank Profitability ◽  
Research Areas ◽  
Recent Approach ◽  
European Banks ◽  
The Relationship ◽  
Management Issues

<p>Our paper aims to analyse the practice of Stakeholder Engagement (SE) in the banking sector and to investigate if SE affects European bank profitability. To identify how banks engage stakeholders we developed a model for calculating an original "SE rating", that comes from four research areas: "Disclosure", "Stakeholders engaged", "Instruments of engagement", and "Management of the SE process". We then provided empirical evidence about the relationship between bank performance and SE rating through a panel analysis. Our evidence shows that commitment to SE should be increased significantly by focusing on organisation and management issues, and - to a lesser extent - on disclosure towards the market. Finally, our econometric study shows that relationship between SE rating and bank performance is not statistically significant, most likely due to the recent approach of banks to SE practice.</p>

scholarly journals BANK PROFITABILITY AND MACROECONOMY: EVIDENCE FROM LITHUANIA

2017 ◽  
Vol 24 (2) ◽  
pp. 383-405 ◽  
Author(s):  
Laurynas NARUŠEVIČIUS
Keyword(s):  
Banking Sector ◽  
Short Term ◽  
Empirical Examination ◽  
Bank Profitability ◽  
Pooled Mean Group ◽  
Real Gdp ◽  
Income Statement ◽  
Main Determinants ◽  
The Relationship

The purpose of this paper is to investigate the relationship between profitability of the Lithuanian banking sector and its internal and external determinants. We use the panel error correc­tion model to assess long-term and short-term determinants of items from bank income statements (net interest income, net fee and commission income and operating expenses). The results of the pooled mean group estimator show that bank size and real GDP are the main determinants in the long-term. Meanwhile, empirical examination suggests various variables as short-term determinants of income statement items. The pooled mean group estimation technique and the analysis of sepa­rate income statement items enable us to have a better insight into the Lithuanian banking sector and determinants of its revenue and expenses.

scholarly journals Effect of Emotional Intelligence and trust on Bank performance (Evidence SME’s in Indonesia)

2019 ◽  
Vol 12 (3) ◽  
pp. 1848-1855
Author(s):  
Titok Waskito Adi ◽  
Budi Prasetyo ◽  
Erlyna Hidyantari
Keyword(s):  
Factor Analysis ◽  
Emotional Intelligence ◽  
Confirmatory Factor Analysis ◽  
Correlation Analysis ◽  
Financial Performance ◽  
Banking Sector ◽  
Bank Performance ◽  
Confirmatory Factor ◽  
The Relationship ◽  
Practical Implications

This study aims to analyze trust in the relationship between staff and customers in the banking sector, its influence on financial performance in the level of emotional intelligence (EI) and their trust. Respondents were asked to complete EI tests and questions related to trust behavior. Exploratory factor analysis and confirmatory factor analysis and correlation analysis are used to identify relationships. Trust's findings are known to consist of three components: trustworthy; knowledge; and expectations. Furthermore, there is a significant correlation between trust and EI, when compared to the financial performance of relationship managers. Research weaknesses/ implications The method used by banks in collecting performance data limits the analysis that can be held. Practical implications increasing relationship manager awareness of their own emotions, and how they perceive and act on the emotions of others, will positively influence financial performance.

scholarly journals Abnormal Loan Growth and Bank Profitability: Some Evidence from the Recent Crisis

2019 ◽  
Vol 14 (7) ◽  
pp. 36
Author(s):  
Simone Rossi ◽  
Mariarosa Borroni ◽  
Mariacristina Piva ◽  
Andrea Lippi
Keyword(s):  
Bank Profitability ◽  
Credit Growth ◽  
Crisis Period ◽  
Managerial Myopia ◽  
Lending Policy ◽  
European Banks ◽  
Loan Growth ◽  
Credit Standards ◽  
The Relationship

During healthy economic/financial times, credit growth often happens without proper provisioning. This is due to a managerial myopia that underestimates the risks underlying an expansive lending policy, leading to lower profitability in following years. However, given the countercyclicality of credit standards, this effect shouldn&rsquo;t occur during harsh times. In this paper, we analyse the relationship between abnormal credit growth and bank profitability during a crisis period. In particular, we test the hypothesis that during a crisis, abnormal credit growth improves bank profitability, given the need for higher, or at least stable, credit standards. We find support for this assumption using a sample of 101 large European banks observed during the recent crisis period. Results are robust to different robustness checks.

The Effect of Low Employee Turnover Ratio on Bank Profitability in Turkey

2015 ◽  
pp. 324-340
Author(s):  
Hasan Dinçer ◽  
Ümit Hacıoğlu ◽  
Türker Tuğsal
Keyword(s):  
Job Satisfaction ◽  
Economic Crisis ◽  
Employee Turnover ◽  
Banking Sector ◽  
Main Argument ◽  
Bank Profitability ◽  
New Employees ◽  
Private Banks ◽  
The Relationship ◽  
Bank Employee

The purpose of this chapter is to emphasize the effect of bank employee turnover on profitability. Researchers so far have commonly studied employee turnover, job satisfaction, and commitment. The current research intends to fill the gap by focusing on the relationship between employee turnover and profitability. In this chapter, firstly, employee turnover, its terminology, and the nature of turnover are defined. This relationship in the banking sector is analyzed and three private banks in Turkey are scrutinized. The main argument of the research is that there is an adverse relationship between employee turnover and bank profitability. Conversely, the results of the study do not thoroughly support the assumption. As a result, findings show that banks minimize the effects of economic crisis by dismissal and not recruiting new employees to replace a quitting worker or recruiting for a new position.

Ethical values and bank performance: evidence from financial institutions in Malaysia

2020 ◽  
Vol 11 (1) ◽  
pp. 233-256
Author(s):  
Tuan Azma Fatiema Tuan Ibrahim ◽  
Hafiza Aishah Hashim ◽  
Akmalia Mohamad Ariff
Keyword(s):  
Banking Sector ◽  
Positive Association ◽  
Annual Reports ◽  
Bank Performance ◽  
Ethical Values ◽  
Return On Assets ◽  
Content Type ◽  
And Performance ◽  
The Relationship

Purpose The purpose of this study is to investigate the relationship between ethical values and performance in the context of the banking sector in Malaysia. Design/methodology/approach Based on the philanthropic model, this study posits that firms undertaking zakat and charity are ethical firms. Zakat disclosure index (ZDI) and charity disclosure index (CDI) were constructed to measure ethical values. This study hypothesises that ethical values are positively associated with bank performance. Ethical values (i.e. CDI and ZDI) and financial performance data (i.e. return on assets) were collected from the disclosures made in the annual reports of 50 banks for a period of five years (2010-2014). Findings A positive association was found between zakat disclosure and bank performance. The results indicate that higher zakat disclosure is associated with greater bank performance. However, no relationship was found between charity disclosure and bank performance. Research limitations/implications Considering the limitation of the index used in this study, other dimensions such as corporate governance, sustainability, products and environment can be considered in the development of index to measure ethical values in future studies. Originality/value This study offers additional explanation on the relationship between ethical values and performance by examining the role of zakat disclosures that characterize the unique aspects of Malaysian companies.

scholarly journals The fat years: the structure and profitability of the US banking sector in the pre-crisis period

2009 ◽  
Vol 33 (4) ◽  
pp. 609-632 ◽  
Author(s):  
Fiona Tregenna
Keyword(s):  
Banking Sector ◽  
Policy Implications ◽  
Current Crisis ◽  
Bank Profitability ◽  
Crisis Period ◽  
Efficient Performance ◽  
The Us ◽  
The Usa ◽  
The Relationship ◽  
Robust Evidence

Abstract Bank profitability in the USA was extremely high in the pre-crisis period, yet this did not prevent the current crisis. It has become clear that these profits were on shaky grounds and also that bank profits were not used to buttress banks’ capital bases. This paper analyses the effects of structure on profitability from 1994 to 2005. Bank-level panel data are used to test the effects of concentration, market power, bank size and operational efficiency on profitability. Efficiency is not found to be a strong determinant of profitability, suggesting that banks’ high profits during this period were not ‘earned’ through efficient performance. Robust evidence is found that concentration increases bank profitability. This holds even when the largest banks are excluded from the sample, suggesting that the relationship between concentration and profitability acts in a generalised structural way and that the higher profits arising from concentration are at the expense of the rest of the economy. The analysis points to various policy implications relevant to the current crisis, in particular in terms of the legitimacy of expectations of the restoration of pre-crisis profit rates and the need for much stronger regulation of the banking sector, especially in terms of the structure of the sector, pricing behaviour and use of profits.

The determinants of bank profitability: empirical evidence from European banking sector

2016 ◽  
Vol 14 (1) ◽  
pp. 86-115 ◽  
Author(s):  
Elisa Menicucci ◽  
Guido Paolucci
Keyword(s):  
Banking Sector ◽  
Developed Countries ◽  
Policy Implications ◽  
Loan Loss ◽  
Data Set ◽  
Bank Profitability ◽  
Content Type ◽  
Loan Loss Provisions ◽  
European Banking ◽  
European Banks

Purpose The purpose of this paper is to investigate the relationship between bank-specific characteristics and profitability in European banking sector to find the role of internal factors in achieving high profitability. Design/methodology/approach A regression analysis is built on an unbalanced panel data set comprising 175 observations of 35 top European banks over the period 2009-2013. To this end, the empirical data are collected from Bankscope and a comprehensive set of internal characteristics is examined. Findings All the determinant variables included in the model have statistically significant impacts on European banks’ profitability. However, the effects are not uniform across profitability measures. Regression findings reveal that size and capital ratio are significant company-level determinants of bank profitability in Europe, while higher loan loss provisions result in lower profitability levels. Findings also suggest that banks with higher deposits and loans ratio tend to be more profitable but the effects on profitability are statistically insignificant in some cases. Practical implications This study has considerable policy implications, as the performance of the European banking sector depends on its efficiency, profitability and competitiveness. In view of these findings, some suggestions may be functional for bank regulatory authorities to intensify and sustain robustness and stability of the banking sector. Originality/value The results provide interesting insights into the characteristics and practices of profitable banks in Europe. Few econometric studies have empirically explored the determinants of bank profitability in Europe so far, even though similar studies have been conducted in several developed countries. Therefore, this paper tries to close an important gap in the existing literature improving the understanding of bank profitability in Europe.

scholarly journals Impact of Political Affiliation on Bank Profitability in Nigeria

2009 ◽  
Vol 5 (3) ◽  
pp. 251-261
Author(s):  
Uhomoibhi Toni Aburime
Keyword(s):  
Financial Markets ◽  
Banking Sector ◽  
Political Affiliation ◽  
Bank Profitability ◽  
Essential Requirement ◽  
Micro Level ◽  
The Stability ◽  
Banking Institution ◽  
The Relationship ◽  
Essential Prerequisite

The importance of bank profitability can be appraised at the micro and macro levels of the economy. At the micro level, profit is the essential prerequisite of a competitive banking institution and the cheapest source of funds. It is not merely a result, but also a necessity for successful banking in a period of growing competition on financial markets. Hence, the basic aim of a bank’s management is to achieve a profit, as the essential requirement for conducting any business. At the macro level, a sound and profitable banking sector is better able to withstand negative shocks and contribute to the stability of the financial system. The importance of bank profitability at both the micro and macro levels has made researchers, academics, bank managements and bank regulatory authorities to develop considerable interest on the factors that determine bank profitability. The broad aim of this paper is to analyze, on the basis of empirical evidence, the relationship between political affiliation and bank profitability in Nigeria.

scholarly journals Investigating the relationship between bank performance and accounting standards: evidence from M&As in European banking

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ali İhsan Akgün
Keyword(s):  
Financial Performance ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Poor Performance ◽  
Bank Performance ◽  
Control Group ◽  
Content Type ◽  
European Banks ◽  
The Relationship

PurposeThe study aims to identify whether international financial reporting standards (IFRS) or local generally accepted accounting principles (GAAP) reporting provides investors and senior management of acquirer banks with superior information on target banks under post-merger bank performance.Design/methodology/approachThe authors examine the claim that IFRS improves corporate transparency and increases financial reporting quality in European Bank merger and acquisitions (M&As). The authors compare the financial performance of merged banks where the target and acquirer banks employed the same reporting system (up to 305 merged banks) to the performance of a control group of banks not engaged in M&A activity (up to 1,690 European banks).FindingsLocal GAAP reporting allows a more transparent assessment of financial performance using traditional indicators, making it a superior tool for assessing potential acquisition targets.Practical implicationsOverall, the empirical findings are consistent with prior studies and indicate a significant relationship between local GAAP and post-merger performance, while IFRS does not contribute to post-merger bank performance.Originality/valueThe study is one of the very few studies to investigate the relationship between bank performance, M&A activity and accounting standards in EU-28 countries. The primary contribution the finding of poor performance of IFRS reporting merged banks compared to local GAAP banks in EU-28 countries in line with prior results of Huian (2012). In addition, several deal- and bank-specific characteristics that affect accounting standards influence M&A transactions in European banks.

scholarly journals Nexus of Market Risk, Dividend Policy and Commercial Banks’ Performance in Sub-Saharan Africa

2020 ◽  
Vol 20 (2) ◽  
pp. 279-297
Author(s):  
Odunayo M. Olarewaju
Keyword(s):  
Commercial Banks ◽  
Dividend Policy ◽  
Banking Sector ◽  
Market Risk ◽  
Agency Cost ◽  
Sub Saharan Africa ◽  
Bank Performance ◽  
Long Run ◽  
Sub Saharan ◽  
The Relationship

Abstract Research Background: The concept of risk is of great importance in any financial system, due to unstable economic situations and fluctuating environmental factors. Like other variables, risk has a significant effect on firms’ returns and profit. Purpose: This study aims at examining the relationship between dividend policy and performance taking cognisance of the uncontrollable risk (market risk). Research methodology: This study was modelled using 250 commercial banks from 30 selected Sub-Saharan African countries in the period 2008 to 2017. The Panel-Vector Error Correction Model was used to estimate the model. Result: From the long run analysis, a long run relationship between dividend policy, agency cost, and bank performance is evident. The disequilibrium will take about 39.5% yearly speed of adjustment to return to a steady state. There is an inverse relationship between Lending interest rate (market risk proxy) with bank performance while there is a positive relationship of foreign exchange rate (market risk proxy) and bank performance in SSA. Novelty: Market risk’s influence on the relationship between dividend policy and bank performance was firstly established. Therefore, it is recommended that the banking sector in SSA should focus more on endogenous factors and review some of their policies as these contribute more significantly to variations in their performance than exogenous factors.

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