scholarly journals The Impact of Globalisation Towards Bank Performance in Malaysia

2021 ◽  
Vol 12 (1) ◽  
pp. 331
Author(s):  
Logasvathi Murugiah ◽  
Mugeshmani Supramaniam
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Banking System ◽  
Secondary Data ◽  
Macroeconomic Fluctuations ◽  
Bank Performance ◽  
Credit Risk Management ◽  
And Performance ◽  
Macroeconomic Determinants ◽  
The Impact

The purpose of this study is to shed some crucial light on the relationship between globalisation and performance of the banking system in Malaysia. This study uses a range of bank-characteristic determinants (internal factors), macroeconomic determinants (external factors) and three different dimensions of globalisation including economic globalisation, social globalisation and political globalisation to explain local commercial bank performance in Malaysia. This study uses regression analysis based on the secondary data for local commercial banks in Malaysia. The period for this secondary data is 10 years which is from the year 2008 till 2017. This study indicates that there is strong evidence stating both economic and politic globalisation have negatively significant effects on the bank performance in Malaysia. Meanwhile, social globalisation shows an insignificant result on this. As for bank characteristics variables, credit risk shows a negatively significant result towards bank performance in Malaysia while bank size shows a positive and significant result towards bank performance in Malaysia. Sole macroeconomic variable which is GDP does not show any significant result towards the bank performance in Malaysia. Therefore, central bank of Malaysia should give some incentive training for local bankers on how to adopt new supervision and risk management. This will give the local bankers some new knowledge to handle better risk management and directly boost the bank performance. Besides that, banks should develop their credit risk management to overcome any default loans and for better financial performances. Banks in Malaysia also need to expand their businesses as larger banks give a larger facility which directly boots the bank performance. It is also recommended for Malaysian banks to improve their forecasting of macroeconomic fluctuations in future to achieve greater efficiency levels.

scholarly journals An Assessment of the Impact of Credit Risk Management and Performance on Loan Portfolio at International Bank Liberia

2021 ◽  
pp. 55-64
Author(s):  
Alvin Boye Dolo
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
The Body ◽  
Management Policy ◽  
Credit Risk Management ◽  
Loan Portfolio ◽  
Net Worth ◽  
International Bank ◽  
And Performance ◽  
The Impact

This research entitled “An Assessment of the impact of credit risk management and performance on loan portfolio at International Bank Liberia Limited from 2015-2017 contributed to the body of knowledge to the beneficiaries. It findings are also important for the Central Bank to use in monitoring credit scoring and history across all commercial bank with in the country. This study was quantitative in nature, and involves mathematical modelling in order to determine the effect of changes in interest rates on profit and net worth of the sampled banks. This study uses panel data and assumes that the effect of interest rate changes vary across the observations and over time, therefore the use of stochastic econometric (panel regression analysis) process is appropriate. The population of the study will consist of 150 credit staffs and other staffs of IBLL. The study adopt a census study and collect data for two years from 1st January, 2015 to 31st December, 2017 and the researcher used sample out 85 respondents representing 57% as the sample size from the population of 150 persons from the study area. The findings reveals that it was established from the study that 25% of the respondents who were picked from the institution agreed that credit score is one of the major system used by the bank in determining loan and 32% selected credit history. It was also observed that that bank operate within a defined credit granting criteria. The findings also show that IBLL established a system of independent, ongoing assessment of the bank‟s credit risk management. It was proven that 48% of the respondents agree while 41% strongly agree. It was established that IBLL have a loan risk management policy in place. This policy is very crucial in providing guidelines on how to manage the various risks the bank encounter in their lending activities. Members of the bank and regulators are those responsible for the formulation of the credit policy with less input from employees.

scholarly journals Credit risk management

2018 ◽  
Vol 10 (2) ◽  
pp. 185-205
Author(s):  
Hassan Akram ◽  
Khalil ur Rahman
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Banking Industry ◽  
Negative Impact ◽  
Descriptive Analysis ◽  
Secondary Data ◽  
Credit Risk Management ◽  
Content Type ◽  
The Impact ◽  
Better Than

PurposeThis study aims to examine and compare the credit risk management (CRM) scenario of Islamic banks (IBs) and conventional banks (CBs) in Pakistan, keeping in view the phenomenal growth of Islamic banking and its future implications.Design/methodology/approachA sample of five CBs and four IBs was chosen out of the whole banking industry for the study. Secondary data obtained from the banks’ annual financial reports for 13 years, starting from 2004 to 2016, were analyzed. Multiple regression, correlation and descriptive analysis were used in the examination of the data.FindingsThe results show that loan quality (LQ) has a positive and significant impact on CRM for both IBs and CBs. Asset quality (AQ), on the other hand, has a negative impact on CRM in the case of IBs, but has a significantly positive relation with CRM in the case of CBs. The impact of 16 ratios measuring LQ and AQ have also been individually checked on CRM, by making use of a regression model using a dummy variable of financial crises for robust comparison among CBs and IBs. The model proved significant, and CRM performance of IBs was observed to be better than that of CBs. Moreover, the mean average value of financial ratios used as a measuring tool for these variables shows that the CRM performance of IBs operating in Pakistan was better than that of CBs over the period of the study.Practical implicationsThe research findings are expected to facilitate bankers, investors, academics and policy makers to build a better understanding of CRM practices as adopted by CBs and IBs. The findings would be useful in formulating policy measures for the progress of the banking industry in Pakistan.Originality/valueThis research is unique in terms of its approach toward analyzing and comparing CRM performance of CBs and IBs. Such work has not been carried out before in the Pakistani banking industry.

scholarly journals The Impact of Audited Financial Statements on Credit Risk Assessment in the Banking System of Kosovo (Period 2014–2018)

2020 ◽  
Vol 8 (1) ◽  
pp. 119-128
Author(s):  
Albina Kalimashi ◽  
Yllka Ahmeti ◽  
Ardi Ahmeti
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Banking System ◽  
Financial Statements ◽  
Financial Statement ◽  
Credit Risk Management ◽  
Audit Process ◽  
Process Work ◽  
Survey Interviews ◽  
The Impact

AbstractThe main goal of the present research is to address the role and importance of audited financial statements in increasing the efficiency of credit risk management in the banking system of Kosovo. In addition, the research will help users understand the financial statement assurance process and the audit process work for a proper assessment of credit risk by banks. The research is treated in sections as below: the first section includes a review of literature (theoretical and empirical review) related to theoretical concepts regarding the importance and development of financial statement audit at financial institutions, in region and beyond. The second section includes a general overview of the relationship between audit of financial statements of clients that establish financial relations with banks and credit risk management. The third section presents the results of the survey and the confirmation of the formulated hypotheses. The last part of the paper presents conclusions and recommendations that have arisen from our study. The main method during our research has been the use of qualitative/quantitative analysis, which has been carried out during various techniques, among which the main ones are the survey interviews & internal observation of processes based on our own professional experience in the banking channels. The paper aspires to provide a better understanding of challenges in assuring qualitative accounting information for decision-making, as well as presents the basis for further study of this issue in the future. The results of the study aim at adding the value to regulatory bodies’ documents such as politics/strategies/instructions and also setting new rules in regard to credit risk management.

Prediction of Return on Equity Using Capital Adequacy Ratio in Commercial Banks: An ANOVA Table Analysis

2014 ◽  
Vol 4 (2) ◽  
Author(s):  
Meenakshi Chaturvedi
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
News Media ◽  
Commercial Banks ◽  
Banking Sector ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Credit Risk Management ◽  
Return On Equity ◽  
The Impact

The purpose of this study is to predict the impact of Credit Risk Management on Profitability of Commercial Banks in India. Data is obtained from different news media, publication and sample banks to describe present scenario of banking sector in India. To analyze the profitability and credit risk management of banks after implementing the Basel II standard, we collected secondary data of ten years (2003 to 2013) from the annual report of banks. Few bar-diagrams have been drawn to compare the performance among six banks. While, to fulfill the research objective, ROE, and CAR is calculated to evaluate the Credit Risk of the Banks. Using these two ratios, researcher constructed the regression model statistics.

scholarly journals Impact of Credit Risk Management Systems on the Financial Performance of Commercial Banks in Uganda

2018 ◽  
Vol 66 (6) ◽  
pp. 1627-1635
Author(s):  
Isah Serwadda
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Performance ◽  
Commercial Banks ◽  
Risk Measures ◽  
Secondary Data ◽  
Credit Risk Management ◽  
Loan Loss ◽  
Loan Loss Provisions ◽  
The Impact

The paper is set to analyse the impact of credit risk management on the financial performance of commercial banks in Uganda for a period of 2006–2015 using panel data for a sample of 20 commercial banks. The study employs return on assets as a dependent variable and non‑performing loans, growth in interest earnings and loan loss provisions to total loans as credit risk measures. Secondary data is sourced from the Bank scope database, African development bank and the central bank of Uganda. The study employs descriptive statistics, regressions and correlation analysis. Regression models are to estimate the magnitude of significance of credit risk management on the performance of commercial banks in Uganda. The study revealed that credit risk management impacts on the performance of Ugandan commercial banks. The results portrayed that banks’ performance was inversely influenced by non‑performing loans which may expose them to large magnitudes of illiquidity and financial crisis. Thus given such results, the researcher recommends that banks need to enhance their credit risk management techniques not only to earn more profits but also to maintain a qualitative asset portfolio and attention be given to non‑performing loans, loan loss provision to total loans and growth in interest earnings that were found to be significant. Banks need to design appropriate credit policies that must handle all necessary conditions before advancing credit to their customers and also develop strong credit administration committees and teams that must conduct appropriate and sound loan appraisal evaluations and which must also monitor the loans throughout the required processes right from extending a loan to a customer up to the completion of loan repayments so as to mitigate credit risks.

scholarly journals The Impact of OJK Regulation No. 48/POJK.03/2020 on the Quality of Credit and Risk Management of Banking Credit

2021 ◽  
Author(s):  
Christanto Arief Wahyudi ◽  
Evi Aryati Arbay
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Secondary Data ◽  
Credit Risk Management ◽  
The Government ◽  
The Stability ◽  
And Control ◽  
The Impact ◽  
Banking Credit

The COVID-19 pandemic, which is spreading rapidly throughout the world, has seriously harmed many countries, including Indonesia. Many things have been detrimental due to COVID-19, one of which is the economic aspect. This pandemic made it difficult for many debtors to fulfil their credit obligations that led the government to issue a countercyclical policy to provide a stimulus to the national economy. This study aims to determine the impact of OJK Regulation No.48 of 2020 on credit quality and control of banking credit risk in Indonesia. The research method used is descriptive qualitative with a literature approach using secondary data. This OJK regulation regulates economic stimulus through credit restructuring and regulates the implementation of credit risk management in banks. The existence of this regulation can maintain the stability of banking performance by keeping the Non-Performing Loan (NPL) number below 5% and providing a reference for banks in risk management with a model that is relevant to economic conditions during the COVID-19 pandemic.

scholarly journals Pengaruh Credit Risk Management Pada Financial Performance Bank Konvensional Yang Terdaftar di BEI

2021 ◽  
Vol 26 (3) ◽  
pp. 447
Author(s):  
Ervina, Vivi N. Fatimah, H.S.Lestari
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Performance ◽  
Secondary Data ◽  
Sampling Technique ◽  
Capital Adequacy ◽  
Credit Risk Management ◽  
Capital Adequacy Ratio ◽  
Conventional Banks ◽  
The Impact

The purpose of this study is to analyze the impact of credit risk management on the financial performance of Indonesian conventional banks in 2016-2020. The sample in this study was 32 conventional banks from 160 observations using purposive sampling technique and secondary data. The dependent variable in this paper is measured by profitability using the return on assets proxy while credit risk management as an independent variable. From the research results, LDR and NPLR have no effect on financial performance. CAR has a positive influence on financial performance so that bank managers are expected to be able to maintain their capital adequacy ratio in accordance with the provisions set by Bank Indonesia to maintain their financial performance because a high capital adequacy ratio is considered safe and tends to meet its financial obligations, while CIR and LDR negative effect on financial performance. By increasing the ratio of costs to income indicates a low level of efficiency in banking operational costs, and low liquid assets will increase cash reserves to reduce liquidity risk. Investors can invest their funds in banks that have a high capital adequacy ratio, cost of income ratio and liquidity ratio to avoid financial risk.

scholarly journals The Impact of OJK Regulation No. 48/POJK.03/2020 the Quality of Credit and Risk Management of Banking Credit

2021 ◽  
Vol 4 (1) ◽  
Author(s):  
Christanto Arief Wahyudi ◽  
◽  
Evi Aryati Arbay ◽  
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Secondary Data ◽  
Credit Risk Management ◽  
The Government ◽  
The Stability ◽  
And Control ◽  
The Impact ◽  
Banking Credit

The COVID-19 pandemic, which is spreading rapidly throughout the world, has seriously harmed many countries, including Indonesia. Many things have been detrimental due to COVID-19, one of which is the economic aspect. This pandemic made it difficult for many debtors to fulfil their credit obligations that led the government to issue a countercyclical policy to provide a stimulus to the national economy. This study aims to determine the impact of OJK Regulation No.48 of 2020 on credit quality and control of banking credit risk in Indonesia. The research method used is descriptive qualitative with a literature approach using secondary data. This OJK regulation regulates economic stimulus through credit restructuring and regulates the implementation of credit risk management in banks. The existence of this regulation can maintain the stability of banking performance by keeping the Non-Performing Loan (NPL) number below 5% and providing a reference for banks in risk management with a model that is relevant to economic conditions during the COVID-19 pandemic.

scholarly journals Credit Risk Management Evaluation and Bank Management Effectiveness: 1995 – 2015 Dimensionality

2020 ◽  
pp. 178-188
Author(s):  
John Nkeobuna Nnah Ugoani
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Banking System ◽  
Total Risk ◽  
Credit Risk Management ◽  
Management Effectiveness ◽  
Nonperforming Loans ◽  
Bank Management ◽  
The Board Of Directors ◽  
Banking Institution

Credit risk management is central to the success or failure of a banking institution because banks earn the greatest quantum of their interest income from interest on loans which represents a critical component of a bank’s profitability. Therefore, any carelessness with regard to credit risk management automatically results to creating huge nonperforming loans which often prepares the grounds for bank distress or failure. In the 1990s and specifically in 1995, 50 percent of 120 banks became technically distressed, as they were characterized by poor management and weak liquidity ratio. For example, in 1995, the ratio of nonperforming loans to total loans was about 33 percent compared to about 5 percent in 2015, and the average liquidity ratio of banks in 1995 was 0.49, against 58.18 in 2015. Also the loans, to deposit ratio in 1995 was 58.4 and 73.21 in 2015, while the number of banks with average liquidity ratio of less than 30 percent was 50 in 1995 against 1 in 2015. Distress persisted in the Nigerian banking system in the 1990s with dwindling profitability and the erosion of shareholders’ equity. In 1995, the adjusted shareholders funds was – N8791.1million against N3,240 billion in 2015, while the capital to total risk weighted asset ratio was about 67.18 percent in 1995 and only about 17.66 percent in 2015. In 1995, the ratio of nonperforming loans to shareholders’ funds was about 496 percent against about 13 percent in 2015. These major performance indicators showed that there was improved credit risk management and bank management effectiveness after 1995 until 2015. The expo-facto research design was employed for the study and the result showed strong positive relationship between credit risk evaluation management and bank management effectiveness. The study was not exhaustive, and further research could examine the relationship between regulatory efficiency and the performance of deposit money banks in Nigeria. The board of directors of banks should always take measures to avoid lending arrangements over and above the repayment capacity of borrowers to reduce the creation of nonperforming loans.

scholarly journals Credit Management and Issues of Bad Debts: An Empirical Study of Listed Deposit Banks in Nigeria

2020 ◽  
pp. 32-49
Author(s):  
Peter E. Ayunku ◽  
Akwarandu Uzochukwu
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Random Effect ◽  
Credit Risk Management ◽  
Loan Loss ◽  
Data Set ◽  
Credit Management ◽  
Loan Loss Provision ◽  
The Impact

This study examines the impact of credit management on firm performance amidst bad debts, among Nigerian deposit banks. Five hypotheses were formulated following the dependent variables of Return on Asset and Tobin Q. The independent variables employed for this study include: Loan Loss Provision, Loan to Deposit Ratio, Equity to Asset Ratio, and Loan Write off. This study is based on ex-post facto research design and employed a panel data set collected from fourteen (14) commercial banks over six years ranging from 2014 to 2019 financial year. We analyzed the data set using descriptive statistics, correlation and Ordinary Least Square Regression Technique. The random effect models established that non-performing loan, loan loss provision and equity to asset impact significantly on banks’ performance in both Return on Asset and Tobin-Q models. This suggests that the sampled banks need to establish efficient arrangements to deal with credit risk management. In all, credit risk management indicators considered in this research are important variables in explaining the profitability of Nigerian commercial banks. However, based on the outcome from the empirical analysis, the study carefully recommends that investors and shareholders in these banks should be aware of the possible use of provisions for losses on non-performing loans by managers for smoothening of profits. The shareholders specifically should be ready to meet optimal agency costs to reduce the manager's information asymmetry by hiring competent internal and external auditors.

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