scholarly journals Liquidity Risk and Financial Performance of Commercial Banks in Kenya

2017 ◽  
Vol 9 (3) ◽  
pp. 256 ◽  
Author(s):  
Jane Gathigia Muriithi ◽  
Kennedy Munyua Waweru
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Generalized Method Of Moments ◽  
Liquidity Risk ◽  
Coefficient Of Determination ◽  
Return On Equity ◽  
Coverage Ratio ◽  
Long Run ◽  
Negative Effect ◽  
Short Run

The focus of this study was to examine the effect of liquidity risk on financial performance of commercial banks in Kenya. The period of interest was between year 2005 and 2014 for all the 43 registered commercial banks in Kenya. Liquidity risk was measured by liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) while financial performance by return on equity (ROE). Data was collected from commercial banks’ financial statements filed with the Central Bank of Kenya. Panel data techniques of random effects estimation and generalized method of moments (GMM) were used to purge time-invariant unobserved firm specific effects and to mitigate potential endogeneity problems. Pairwise correlations between the variables were carried out. Wald and F- tests were used to determine the significance of the regression while the coefficient of determination, within and between, was used to determine how much variation in dependent variable is explained by independent variables. Findings indicate that NSFR is negatively associated with bank profitability both in long run and short run while LCR does not significantly influence the financial performance of commercial banks in Kenya both in long run and short run. However, the overall effect was that liquidity risk has a negative effect on financial performance. It is therefore advisable for a bank’s management to pay the required attention to the liquidity management.

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 PENGARUH BOPO DAN LDR TERHADAP KINERJA KEUANGAN PADA BANK UMUM KONVENSIONAL PERIODE 2017-2019

SIMAK ◽  
2021 ◽  
Vol 19 (01) ◽  
pp. 42-51
Author(s):  
Tirey Widya Pamungkas ◽  
Gusganda Suria Manda
Keyword(s):  
Regression Analysis ◽  
Quantitative Analysis ◽  
Linear Regression ◽  
Financial Performance ◽  
Commercial Banks ◽  
Linear Regression Analysis ◽  
Liquidity Risk ◽  
Operational Risk ◽  
Multiple Linear Regression Analysis ◽  
Negative Effect

The purpose of this study was to determine the effect of operational risk as proxied by BOPO and liquidity risk as proxied by LDR on financial performance as proxied by ROA. The object of this research is 10 conventional commercial banks for the 2017-2019 period. The analytical method used is descriptive quantitative analysis, multiple linear regression analysis and classical assumption test. The results in this study are operational risk (BOPO) partially has a negative effect on financial performance (ROA) and liquidity risk (LDR) partially has no effect on financial performance (ROA). As well as operational risk (BOPO) and liquidity risk (LDR) simultaneously affect financial performance.

scholarly journals Effect of Liquidity Management on Profitability of Commercial Banks in Nigeria

2021 ◽  
Vol 6 (2) ◽  
pp. 25-34
Author(s):  
Oreoluwa Olaleye ◽  
Muhammed Adesina ◽  
Sulaiman Yusuf
Keyword(s):  
Error Correction ◽  
Commercial Banks ◽  
Profit Maximization ◽  
Unique Contribution ◽  
Liquidity Management ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Negative Effect ◽  
Short Run

Introduction: Commercial banks in Nigeria are more engrossed with profit maximization and as such they tend to neglect the importance of liquidity management. This eventually leads to financial indebtedness and consequently low patronage and deposit flight. Purpose: This study examined the effect of liquidity management on profitability of commercial banks in Nigeria using data obtained from the financial statements of tier 1 banks over the period 1998 to 2018. Methodology: The study employed the correlational research design and engaged the Johansen test with the vector error correction model to access the long run and short run relationship among the variables. Findings: The results of the Johansen test revealed at most two cointegrating equations among the variables, while result of vector error correction revealed a positive effect of liquidity on return on asset and return on equity but a negative effect on net profit margin. Results revealed a fairly stable trend in the liquidity and profitability indicators from 1998-2018 and concluded that banks controlled enough liquidity to serve their obligations. Unique contribution to theory, practice and policy: The study recommends that the central bank of Nigeria should maintain the regulation over the minimum liquidity of commercial banks as this affects their profitability.

scholarly journals Modeling Bank Capital Adequacy Dynamics and Liquidity Risk Management, Empirical Evidence from the Nigeria Commercial Banks

2019 ◽  
Vol 10 (07) ◽  
pp. 21563-21571
Author(s):  
Dr. S. L. C. Adamgbo ◽  
Prof. A. J. Toby ◽  
Dr. A.A. Momodu ◽  
Prof. J.C. Imegi
Keyword(s):  
Risk Management ◽  
Commercial Banks ◽  
Management Practices ◽  
Time Series Data ◽  
Liquidity Risk ◽  
Capital Adequacy ◽  
Series Data ◽  
Causality Test ◽  
Long Run ◽  
Short Run

This study examines the effects of Capital adequacy on liquidity risk management practices in Nigeria. The secondary time series data were obtained from the annual reports of the fifteen (15) quoted commercial banks in Nigeria as compiled from the Nigeria Stock Exchange Fact book for the period 1989 to 2015. The independent variables capital adequacy are categorised under Tier I, Tier II to total risk assets, capital conservation buffer (CCB), Minimum total capital (MTC) and counter-cyclical Buffer (CCyB). The dependent variable Liquidity risk was modelled with the five variants of capital adequacy measures. The multivariate regression equation were specified and results obtained based on E-views version 9.0. The OLS and cointegration result shows existence of a short run and long run equilibrium relationship between LIQR and capital adequacy (CAR). The Unit root test shows that the variables were stationary at level and first difference i.e. 1(0) and 1(1). The VAR test indicates that fluctuations in liquidity risk are significantly influenced by capital adequacy measures. The granger-causality test shows a unidirectional link between liquidity risk and capital adequacy. The impulse response function (IRF) shows that liquidity risk responded negatively to capital adequacy measures. The variance decomposition results indicates that LIQR accounted for 78.73% of own shocks at the short run, while at the long run accounted for 14.76%, the rest of 86.34% were distributed among the capital adequacy measures with CCB accounted for the highest. This study concludes that transition to Basel III will further mitigate the concentration of liquidity risk and avert systematic failure in the Nigeria banking system. It is recommended that risk management should be a matter policy focus and priority among regulators and operators in Nigeria banking industry.

The effect of the board of directors on the performance: Case of Tunisian banks

2020 ◽  
Vol 2 (2) ◽  
pp. 8-17
Author(s):  
Abdelkader Derbali ◽  
Lamia Jamel ◽  
Ali Lamouchi ◽  
Ahmed K Elnagar ◽  
Monia Ben Ltaifa
Keyword(s):  
Financial Performance ◽  
Board Of Directors ◽  
Stock Exchange ◽  
Market Performance ◽  
Outside Directors ◽  
Return On Equity ◽  
Satisfactory Outcome ◽  
Stock Market Performance ◽  
The Board Of Directors ◽  
Negative Effect

The board of directors plays a crucial role as an internal structure of corporate governance. Certainly, its efficiency is needy on the existence of numerous issues; the greatest significance is correlated to its characteristics that relay principally to the individuality of its memberships, board dimension, combining the purposes of pronouncement and regulator as well the grade of the individuality of the audit board and the diverse gender of the committee. To assess the authenticity of our assumptions, which stipulate the presence of deterministic characteristics of the committee on the profitability of Tunisian banks, we evaluated by three different ratios i.e., ROA (return on asset), ROE (return on equity), and MP (market performance); and we estimate three models with linear regressions. The empirical findings were performed on a data sample composed of 11 Tunisian banks listed on the Stock Exchange of Tunisia (SET) during the period from 1999 to 2018. From the estimated regressions, we find a satisfactory outcome indicating the significance of the influence of the characteristics of the committee on the banking performance in Tunisia. Then, the percentage of outside directors negatively affects the level of the financial performance of banks. The number of institutional administrators performs an essential role in improving financial performance. Finally, the duality of the Presidency of the Council General-Directorate has a negative effect on the level of stock market performance of Tunisian banks.

scholarly journals Dynamic Integrated Model for Assessing Fisheries: Discard Bans as an Implicit Value-Added Tax

2021 ◽  
Author(s):  
Jose Maria Da Rocha ◽  
Javier García-Cutrín ◽  
Maria-Jose Gutiérrez ◽  
Raul Prellezo ◽  
Eduardo Sanchez
Keyword(s):  
Value Added ◽  
Point Of View ◽  
Value Added Tax ◽  
Biological Variables ◽  
A Value ◽  
Long Run ◽  
The Social ◽  
Negative Effect ◽  
Short Run ◽  
The Impact

AbstractIntegrated economic models have become popular for assessing climate change. In this paper we show how these methods can be used to assess the impact of a discard ban in a fishery. We state that a discard ban can be understood as a confiscatory tax equivalent to a value-added tax. Under this framework, we show that a discard ban improves the sustainability of the fishery in the short run and increases economic welfare in the long run. In particular, we show that consumption, capital and wages show an initial decrease just after the implementation of the discard ban then recover after some periods to reach their steady-sate values, which are 16–20% higher than the initial values, depending on the valuation of the landed discards. The discard ban also improves biological variables, increasing landings by 14% and reducing discards by 29% on the initial figures. These patterns highlight the two channels through which discard bans affect a fishery: the tax channel, which shows that the confiscation of landed discards reduces the incentive to invest in the fishery; and the productivity channel, which increases the abundance of the stock. Thus, during the first few years after the implementation of a discard ban, the negative effect from the tax channel dominates the positive effect from the productivity channel, because the stock needs time to recover. Once stock abundance improves, the productivity channel dominates the tax channel and the economic variables rise above their initial levels. Our results also show that a landed discards valorisation policy is optimal from the social welfare point of view provided that incentives to increase discards are not created.

The impact of credit risk on the financial stability of commercial banks in Vietnam

2021 ◽  
Vol 11 (2) ◽  
pp. 67-80
Author(s):  
Nguyen Quoc Anh ◽  
Duong Nguyen Thanh Phuong
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Financial Stability ◽  
Dynamic Panel Data ◽  
Z Score ◽  
Return On Equity ◽  
Score Analysis ◽  
Negative Effect ◽  
The Difference ◽  
The Impact

This study investigates the impact of credit risk on the financial stability of Vietnamese commercial banks. The paper uses the Z-score to proxy the financial stability of banks. We use the data of 27 Vietnamese commercial banks on BankScope, during 2010 - 2019. The paper applied a dynamic panel data approach; the selected method is the difference GMM (DGMM). The key question discussed is which factor impacts on Z-score. Analysis results show the negative effect of non-performing loans on the financial stability of banks. When commercial banks have higher non-performing loans, the lower the financial stability is. Additionally, bank-specific variables such as equity on asset ratio, the return on equity, the size of the bank and set of macroeconomic variables affect the bank’s financial stability. Based on the analysis results, we imply relevant policies for the State Bank of Vietnam and commercial banks.

Corporate social responsibility, visibility, reputation and financial performance: empirical analysis on the moderating and mediating variables from Korea

2017 ◽  
Vol 13 (4) ◽  
pp. 856-871 ◽  
Author(s):  
SeHyun Park
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Least Square ◽  
Mediating Effect ◽  
Financial Benefit ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
Corporate Social

Purpose This paper aims to substantiate the mechanism through which corporate social responsibility (CSR) affects financial performance (FP). Specifically, this paper focuses on the moderating effect of visibility and mediating effect of reputation in the relationship. Design/methodology/approach This paper investigates 175 Korean firms from 2010 to 2012 that have been listed in the Korean Economic Justice Index for all three years. The hypotheses are tested using various measures of visibility and the Korea’s Most Admired Company index as proxy for reputation. The logistics regression and the ordinary least square are used. Findings This paper initially demonstrates that the visibility moderates the correlation between CSR and reputation. On this finding, it further proves that CSR has positive effect on the long-run FP, measured in the Tobin’s Q, both directly and indirectly through reputation. However, the influence is irrelevant in the short run. In sum, visibility moderates the correlation between CSR and reputation, which mediates the CSR-FP relationship in the long run. Practical implications This paper argues for the importance of visibility in practicing CSR, especially when reputation building and financial benefit is sought through CSR. Originality/value Despite its strategic importance, the visibility of CSR has not been sufficiently studied. Moreover, as scholars have recently suggested that the CSR–FP relationship is rather indirect, there is even more significance in investigating the moderating and mediating variable. Hence, with the intuitive results, this paper lays an integral foundation in the literature.

scholarly journals INFLASI DARI SUDUT PANDANG MONETER DAN FISKAL (STUDI KASUS SUMATERA BARAT)

2019 ◽  
Vol 1 (1) ◽  
pp. 131
Author(s):  
Zul Azhar ◽  
Alpon Satrianto ◽  
Nofitasari Nofitasari
Keyword(s):  
Interest Rate ◽  
Money Supply ◽  
Government Spending ◽  
Descriptive Research ◽  
Distributed Lag ◽  
Long Run ◽  
Negative Effect ◽  
Short Run ◽  
The Interest Rate ◽  
Positive Effect

This study aims to analyze the effect of money supply M2, interest rate, government spending and local tax on the inflation in West Sumatera. This type of research is descriptive research and secondary datain the form of time-series from quartely 1 2007 to 2017 quartely 4 using the method of Autoregresive Distributed Lag analysis. The results of this study indicate that money supply in the long run have a significant and positive effect on inflation West Sumatera. In the short run  and long run the interest rate has a significant and positive effect on inflation in West Sumatera. Government spending in the Long run has a significant and negative effect on inflation in West Sumatera. Based on the result of this study can be concluded that there is inflation in West Sumatera is monetery of phenomenon in the long run. 

scholarly journals MENINGKATKAN KINERJA KEUANGAN RETURN ON EQUITY (ROE) MELALUI RASIO STRUKTUR MODAL DEBT TO ASSET RATIO (DAR) DAN DEBT TO EQUITY RATIO (DER) PADA PT BANK MANDIRI TBK YANG TERDAFTAR DI BURSA EFEK INDONESIA

2021 ◽  
Vol 12 (1) ◽  
pp. 52-65
Author(s):  
Armalinda Armalinda
Keyword(s):  
Financial Performance ◽  
Quantitative Research ◽  
Time Series Data ◽  
Stock Exchange ◽  
Statistical Tests ◽  
Financial Statements ◽  
Coefficient Of Determination ◽  
Series Data ◽  
Return On Equity ◽  
Equity Ratio

This study aims to determine how much influence the Debt to Assets Ratio (DAR) and Debt to Equity Ratio (DER) have on the Return on Equity (ROE) of PT Bank Mandiri Tbk which are listed on the Indonesia Stock Exchange. The research design used in this research is associative/quantitative research. The population in this study is the annual financial statements of PT. Bank Mandiri Tbk for the period 2012-2019, while the sample was taken using time series data, namely the annual financial statements of PT. Bank Mandiri Tbk for the period 2012-2019 which consists of balance statements, income statements, and cash flow from funding activities from 2012 to 2019. The result of the coefficient of determination (R Square) is 0.813. This figure means that 0.813 or 81.3% of the diversity of data from financial performance data can be explained by the two independent variables, namely the Debt to Asset Ratio and the Debt to Equity Ratio. While the rest (1-0.813 = 0.817) or 18.7% is explained by other factors outside the study. The results of statistical tests show that the Asset Ratio and Debt to Equity Ratio together (simultaneously) have an effect on financial performance (Return on Equity).

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