scholarly journals The Threats of Unsystematic Risks in Jordanian Commercial Banking Sector

2017 ◽  
Vol 9 (9) ◽  
pp. 175
Author(s):  
Ghaith N. Al-Eitan ◽  
Ismail Y. Yamin
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Banking Sector ◽  
Fixed Effect Model ◽  
Commercial Banking ◽  
Capital Adequacy ◽  
Credit Risk Management ◽  
Effect Model ◽  
The Impact ◽  
The Empirical Analysis

The objective of this study is to empirically examine the effect of unsystematic risks on the performance of commercial banks in Jordan, using panel data for the period of 10 years (2005-2015). The study uses earning per share and dividends as dependent variables to represent Banks’ performance. The empirical analysis based on the fixed effect model selected on the basis of Hausman test. The results indicate that the impact of Non-performing loans on commercial banks’ dividends is positive and significant while the impact of capital adequacy is negative and statistically significant on dividends. The results indicate that the credit risk, liquidity risk, non-performing loan and capital adequacy have significant effect on earnings per share and the effects are negative as expected. Based on the study it is recommended that the Jordanian commercial banks needs enhance the process of credit risk management to determine loan defaulter and impose the appropriate legal action against them.

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 The Impact of Credit Risk Management on the Commercial Banks Performance in Nigeria

2014 ◽  
Vol 3 (5) ◽  
pp. 295-306
Author(s):  
Idowu Abiola ◽  
Awoyemi Samuel Olausi
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Commercial Banking ◽  
Capital Adequacy ◽  
Credit Risk Management ◽  
Financial Reports ◽  
Return On Equity ◽  
Management Indicators ◽  
The Impact

Credit risk management in banks has become more important not only because of the financial crisis that the industry is experiencing currently, but also a crucial concept which determine banks’ survival, growth and profitability. The aim of this study is to investigate the impact of credit risk management on the performance of commercial banks in Nigeria. Financial reports of seven commercial banking firms were used to analyze for seven years (2005 – 2011). The panel regression model was employed for the estimation of the model. In the model, Return on Equity (ROE) and Return on Asset (ROA) were used as the performance indicators while Non-Performing Loans (NPL) and Capital Adequacy Ratio (CAR) as credit risk management indicators. The findings revealed that credit risk management has a significant impact on the profitability of commercial banks’ in Nigeria.

scholarly journals Does Credit Risk Management affect the Financial Performance of Commercial Banks in Kosovo?

2018 ◽  
Vol 7 (2) ◽  
pp. 49-57
Author(s):  
Rrustem Asllanaj
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Performance ◽  
Multiple Regression ◽  
Commercial Banks ◽  
Multiple Regression Model ◽  
Capital Adequacy ◽  
Regression Equations ◽  
Credit Risk Management ◽  
The Impact

This study analyses the impact of credit risk management on financial performance of commercial banks in Kosovo, and comparing the relationship between the determinants of credit risk management and financial performance by using CAMEL indicators. Panel data of 85 observations from 2008 to 2012 of ten commercial banks was analysed using multiple regression model. Findings through multiple regression analysis are presented in forms of tables and regression equations. The study also elaborates whether capital adequacy, asset quality, management efficiency, earnings and liquidity have strong or weak relationship with financial performance of commercial banks. The study concludes that CAMEL model can be used as a system of assessment and rating of credit risk management by commercial banks in Kosovo.

scholarly journals The Impact of Credit Risk Management on the Moroccan Commercial Banking Sector

2021 ◽  
Vol 11 (4) ◽  
pp. 5713-5724
Author(s):  
Fatima Bellaali ◽  
Abdelhamid Al Bouhadi
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Management Practices ◽  
Banking Sector ◽  
Commercial Banking ◽  
Credit Risk Management ◽  
Loan Portfolios ◽  
Market Requirements ◽  
The Impact ◽  
Different Sources

The study aimed to analyze the credit risk management practices that the commercial banking sector in Morocco is committed to and their impact on the banking sector.Accordingly, the study reached many conclusions about the importance of applying the mechanism of transferring risks into credit opportunities in the market, which can be achieved through diversifying the bank’s revenue schemes in an optimal manner and correct compatibility with market requirements, which allows the bank to use different sources of interest and fees granted from other areas of service that provided by the Bank, rather than focusing primarily on loan portfolios. In addition, the study highlighted the importance of the relevant specialist within the Bank to deal with more macroeconomic research. Designed for market-based economies, other than adopting credit trend analysis alone, therefore, depreciation of bank assets comes from a variety of market drivers, which have a fundamental role in influencing the credit capabilities of the bank.

scholarly journals The Impact of Credit Risk Management Indicators on Profitability Attributes: Evidence from the State-Owned Commercial Banks in Bangladesh

2021 ◽  
Vol 8 (3) ◽  
pp. 215-224
Author(s):  
Mst. Hasna Banu ◽  
Md. Sayaduzzaman ◽  
Subhash Chandra Sil
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Banking Sector ◽  
Management Practice ◽  
Management Policy ◽  
Annual Reports ◽  
Credit Risk Management ◽  
Management Indicators ◽  
The Impact

The focal attempt of this research is to identify the consequence of credit risk management indicators on profitableness attributes of state-owned commercial banks functioning in Bangladesh. To attain the objectives of this research study researcher has analyzed four sample banks’ audited annual reports covering the period 2012 to 2016. The study has employed the ANOVA technique, multiple regression model, and correlation matrix to reach the concluding remark as per study objectives. The findings revealed that there is significant and insignificant variation as well as relationship in the different indicators of credit risk management but there is insignificant variation in the different attributes of profitability in the midst of the sample banks within the study period. Furthermore, there is the insignificant impact of the different indicators of credit risk management namely loan and advance, classified loan, unclassified loan, leverage ratio, bad debt, default ratio, cost per loan asset, and cost to income ratio on profitability attributes such as return on assets, return on equity along with net profit percentage of the sample banks over the study period. Hence, the study has recommended that the management of the banking sector should emphasize creating a smart credit management policy as well as lending guidelines to formulate the suitable credit risk management practice to meet the demand of loans applicants properly.

scholarly journals Determinants of Bank Credit Risk in Developing Economies: Evidence from Benin

2018 ◽  
Vol 11 (4) ◽  
pp. 154 ◽  
Author(s):  
Kevin Ghislain Adjé
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Developing Economies ◽  
Fixed Effect Model ◽  
Bank Credit ◽  
Empirical Literature ◽  
Credit Risk Management ◽  
Internal Factors ◽  
Effect Model

Our study mainly focuses on the determinants of credit risk of Beninese banks. Theoretical and empirical literature teach us that both external and internal factors are the determinants of credit risk. From a sample of seven (07) commercial banks (only one of which is listed on the BRVM), we tested the simultaneous effect of external and internal factors on credit risk over the period 2004-2013. After an econometric analysis on panel data (fixed effect model estimated by the PCSE method), it appears that the "growth of GDP", "credit by signature", "interest margin" and the "proportion of institutional administrator "are the determinants of credit risk. Therefore, political authorities and bank officials could improve credit risk management by issuing policies on these factors.

scholarly journals Credit risk management and profitability: empirical evidence on Ethiopian commercial banks

2020 ◽  
Vol 8 (4) ◽  
pp. 377-386
Author(s):  
Shibiru Tade Kidane
Keyword(s):  
Risk Management ◽  
Gross Domestic Product ◽  
Credit Risk ◽  
Commercial Banks ◽  
Negative Impact ◽  
Capital Adequacy ◽  
Domestic Product ◽  
Credit Risk Management ◽  
Macroeconomic Factors ◽  
The Impact

The aim of the study was to assess the impact of credit risk management on the profitability commercial banks in Ethiopia. Secondary data was gathered from National Bank of Ethiopia for ten year periods (2010-2019). The study adopted Correlation analysis and fixed effect Model. Return on Asset was used to measure profitability of commercial banks, bank specific factors(Capital adequacy, Loan and Advances to total deposit, Non- Performing Loans, Bank size and Liquidity and macroeconomic factors (Inflation and Gross Domestic Product) as indicators of credit risk management. The findings showed that Credit Risk Management in terms of bank specific and macroeconomic factors has significant impact on profitability of commercial banks in Ethiopia. Also the result displayed that profitability of commercial banks is not affected by the amount of non- performing loans during the study. The study recommended that banks’ credit risk management should not give due devotion only to the internal factors  but also to external factors exclusively (Gross Domestic Product and Inflation) in order to minimize their negative impact on profitability of commercial banks in Ethiopia

scholarly journals The Impact of Credit Risk on Bank Profitability in Nigeria

2020 ◽  
Vol 1/2020 (13) ◽  
pp. 5-22
Author(s):  
Onyeiwu Charles ◽  
◽  
Gideon Ajayi ◽  
Obumneke Muoneke B. ◽  
Keyword(s):  
Risk Management ◽  
Regression Analysis ◽  
Credit Risk ◽  
Commercial Banks ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Strong Impact ◽  
Credit Risk Management ◽  
Risk Parameters ◽  
The Impact

This study examines the impact credit risk management has on the profitability of commercial banks in Nigeria. The main objective of this material is to show how credit risk parameters are related to the expected performance of commercial banks in Nigeria. Using the regression analysis, relationship was drawn between credit risk parameters (which include capital adequacy ratio and non-performing loan ratio) and the profitability ratio (return on average asset, in particular) of five big Nigerian banks. Mixed research methodology was adopted in that primary data were sourced via questionnaires and secondary data were used via annual report of selected banks. Regression analysis was used to analyse the data. The conclusion drawn from the data analysis shows that there is a strong relationship between credit risk parameters and returns of the bank implying that credit risk management has a strong impact on the profitability of commercial banks in Nigeria. The study recommends that banks’ capital should be matched with their total risk exposure and if there is an imbalance, new capital requirements are necessary. Insider-related interests in loan applications should be closely monitored by the regulators to ensure continuous performance of the loan facility. Also, there should be an extant profiling of loan defaulters whether individuals or corporate entities.

scholarly journals IMPACT OF CREDIT RISK ON PROFITABILITY OF COMMERCIAL BANKS IN NEPAL

2018 ◽  
Vol 3 (6) ◽  
pp. 161
Author(s):  
Shiva Raj Poudel
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Negative Impact ◽  
Positive Impact ◽  
Panel Data Analysis ◽  
Fixed Effect Model ◽  
Capital Adequacy ◽  
Return On Equity ◽  
Significant Negative Impact ◽  
The Impact

The main purpose of the study was to examine the impact of credit risk on profitability of the commercial banks in Nepal. Data were collected from the sample of 15 commercial banks operated in Nepali economy for the period of 2002/03 to 2014/15. One way Fixed Effect Model (FEM) of panel data analysis is used as a major tool of analysis. The profitability of the commercial banks is measured in terms of return on equity and is regressed on bank specific variables and macro-economic variables. The results confirmed that credit risk has the significant negative impact on profitability of commercial banks in Nepal. In addition, solvency ratio, interest spread rate, and inflation have the insignificant negative impact on profitability. In contrast, capital adequacy ratio, total assets, and GDP growth have the significant positive impact on profitability of commercial banks in Nepal. Finally, inter-bank interest rate has insignificant positive impact on profitability.

scholarly journals Does the target market affect bank performance? Evidence from the geographic diversification of city commercial banks in China

2021 ◽  
Vol 15 (1) ◽  
Author(s):  
Xiaonan Li ◽  
Chang Song
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Capital Adequacy ◽  
Bank Performance ◽  
Chinese Government ◽  
Target Market ◽  
Geographic Diversification ◽  
Cross Sectional ◽  
The Impact ◽  
Geographical Diversification

AbstractAfter the opening up of the banking sector to domestic and foreign capitals which is approved by the Chinese government, the China Banking Regulatory Commission (CBRC) has permitted city commercial banks to diversify geographically. Since this deregulation in 2006, city commercial banks began to geographically diversify to occupy the market and acquire more financial resources. To examine the causal relationship between geographical diversification and bank performance, we construct an exogenous geographical diversification instrument using the gravity-deregulation model and a policy shock. We find that bank geographical diversification negatively affects bank performance. Moreover, we conduct some mechanism tests in the Chinese context. We find that the target market with several large- and medium-sized banks and a high level of local protectionism in the target market decreases the performance of city commercial banks. Finally, cross-sectional analyses show that the impact of geographical diversification on banks’ performance is more notable among city commercial banks that are younger, and have a lower capital adequacy ratio and a higher non-performing loan ratio.

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