scholarly journals Does the oligopolistic position of banks affect the performance of the banking sector in the Federation of Bosnia and Herzegovina?

2021 ◽  
Vol 13 (2) ◽  
pp. 113-131
Author(s):  
Almir Alihodžić
Keyword(s):  
Growth Rate ◽  
Bosnia And Herzegovina ◽  
Concentration Index ◽  
Banking Sector ◽  
Positive Impact ◽  
Market Concentration ◽  
Return On Assets ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Negative Effect

The level of banking concentration has increased significantly in the banking sector of Bosnia and Herzegovina as a result of the successful completion of privatization, the formation of new banks, the slow transition and rapid liberalization. Rapid liberalization has introduced strong competition in the domestic banking sector on the one hand, while there has been an increased concentration of some larger banks in the system. The main goal of this research will be to analyze the correlation between the basic measures of the oligopolistic position of banks and their impact on improving or deteriorating the performance of domestic banks, such as return on assets (ROA), return on equity (ROE) and net interest margin (NIM). The survey period covers the years from 2008: Q1 to 2020: Q4 on a quarterly basis. The following variables were used as independent variables in the model: HHI market concentration index in the context of loans, share of foreign banks in the total ownership structure of banks (FB), bank size (BS) and growth rate of total loans (GRTL).The interdependence of variables in this study was tested via the OLS regression model. The results showed that the foreign-owned Banks (FB) variable has a positive impact on the variable return on Assets (ROA), while the variables bank size (BS) and market concentration index for loans (HHI) have a negative impact. The result also showed that the two variables the growth rate of total loans (GRTL) as well as foreign-owned banks (FB) have a positive impact on the variable return on equity (ROE), while the variables market concentration index for loans (HHI) and bank size (BS) have a negative effect. The third result is that the variable net interest margin (NIM) has the strongest positive impact on the two variables foreign-owned banks (FB) and credit growth rate (GRTL), while concentrations for credit placements (HHI) and bank size (BS) have a negative effect.

scholarly journals Effects of E-Banking Adoption on the Financial Performance of State-Owned Commercial Banks in Bangladesh

2021 ◽  
Vol 34 (4) ◽  
pp. 1-20
Author(s):  
Md. Imran Hossain
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Negative Impact ◽  
Positive Impact ◽  
Least Square ◽  
Return On Assets ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Adoption And Implementation ◽  
Significant Negative Impact

This study examines the relationship between e-banking adoption and the financial performance of state-owned commercial banks in Bangladesh. The pooled ordinary least square (OLS) estimate was applied to analyze the panel data of the sample banks. The empirical findings reveal that e-banking adoption and implementation has a significant negative impact on banks' profitability in terms of return on assets, return on equity, and net interest margin in the year of adoption. However, the result also shows that e-banking has a significant positive impact on return on assets in the year following adoption.

scholarly journals Sectoral and Firm-Level Determinants of Profitability: A Multilevel Approach

2018 ◽  
Vol 6 (2) ◽  
pp. 32-44 ◽  
Author(s):  
Ivana Blažková
Keyword(s):  
Growth Rate ◽  
Market Share ◽  
Positive Impact ◽  
Market Concentration ◽  
Firm Level ◽  
Size Number ◽  
Firm Profitability ◽  
Negative Effect ◽  
Equity Ratio ◽  
Food And Drink

Abstract The paper aimed to contribute to the literature on the determinants of firm profitability, from the perspective of the Czech economy. We followed a multilevel/hierarchical approach towards the analysis of the sectoral and firm-level determinants of the profitability of companies operating in the Czech food processing industry during years 2005-2012 (622 Firms in 10 Sectors). We assessed an impact of industry (i.e. market concentration, sector growth rate and growth rate of imports) and firm-level characteristics (i.e. market share, firm age, firm size, number of employees, debt/equity ratio and short-term risk) on the return on assets (ROA). Surprisingly, there were no substantial differences between the separate models for industry and firm-level determinants and a combined one. We found a positive impact of market concentration and market share and a negative effect of age and risk-taking behaviour on a firm profitability. Based on these findings, managers in the Czech food and drink industry should pay more attention to the debt policy.

scholarly journals PROFITABILITY OF BANKS IN BOSNIA AND HERZEGOVINA: PANEL ANALYSIS

2017 ◽  
Vol 1 (13) ◽  
pp. 11
Author(s):  
Slađana Paunović ◽  
Borka Popović ◽  
Dajana Kovačević
Keyword(s):  
Bosnia And Herzegovina ◽  
Banking Sector ◽  
Internal Variables ◽  
Panel Analysis ◽  
Return On Assets ◽  
Macroeconomic Variables ◽  
Independent Variables ◽  
Net Interest Margin ◽  
External Variables ◽  
Macroeconomic Indicators

This paper examines the factors that determine the profitability of the banking sector in Bosnia and Herzegovina, measured by return on assets and net interest margin in the period 2008-2014. As the independent variables we used internal variables specific to the operations of banks, as well as external variables that represent the most important macroeconomic indicators. The analysis showed that the most significant impact of internal variables includes: cost-assets ratio of permanent and total assets, and the scope of the bank. When it comes to macroeconomic variables, inflation shows a significant effect on the movement of profitability of the banking sector in Bosnia and Herzegovina.

scholarly journals CAPITAL STRUCTURE AND BANK PERFORMANCE OF ISLAMIC AND COMMERCIAL IN YEMEN

2021 ◽  
Vol 9 (12) ◽  
pp. 39-49
Author(s):  
Samer Ahmed Ali Assirri ◽  
C.K. Hebbar
Keyword(s):  
Capital Structure ◽  
Banking Sector ◽  
Positive Impact ◽  
Bank Performance ◽  
Short Term ◽  
Return On Assets ◽  
Return On Equity ◽  
Independent Variables ◽  
Total Debt ◽  
The Impact

This study aims to examine the impact of capital structure on bank performance. This research verified the existence of several relationships between capital structure as measured by LAR, EAR, and Total Debt ratio on bank’s performance as measured by ROA and ROE, EPS, and NPM. Using the panel data of bank from 2010 to 2019, In Islamic banks , the results of the present study revealed that the contributions of the capital structure to ROA were significant. This result was in line with the findings of the past studies. For instance, El-Chaarani and El-Abiad (2019) found that positive and significant impacts of short-term debt and total debt on the return on equity of the banking sector in Middle East region, a negative and significant impacts of short-term debt and total debt on the return on assets, and a positive impact of long-term debt on the return on assets ratio. In commercial banks sector the regression analysis revealed that the contributions of the three independent variables to the EPS were non-significant. Also, the contributions of the total debt and LAR to the independent variables ROE were significant. In contrast, the contribution of the EAR to the independent variable ROE was non-significant. Moreover, the contribution of the LAR to NPM was significant. Also, the contributions of the EAR and the total debt to NPM were non-significant. Furthermore, the contributions of the LAR and EAR to ROA were significant. In contrast, the contribution of the total debt to ROA was non-significant. In general, the contributions of the LAR and EAR to ROA were significant.

scholarly journals Pengaruh Faktor Internal dan Eksternal Terhadap Harga Saham

2020 ◽  
Vol 10 (2) ◽  
pp. 176
Author(s):  
Elvin Ruswanda Yudistira ◽  
I Made Pradana Adiputra
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Inflation Rate ◽  
Banking Sector ◽  
Stock Exchange ◽  
External Factors ◽  
Return On Assets ◽  
Internal Factors ◽  
Return On Equity ◽  
Net Interest Margin

The purpose of this experiment is to prove internal factors and external factors to the stock price. Internal factors include: Return on Assets, Return on Equity, Net Interest Margin and Operating Costs / Operational Scoping. While external factors include: the inflation rate and the BI rate. The population in this study is the company placed on the Indonesia Stock Exchange (IDX) in the banking sector for the 2015-2019 period. There were 32 people represented in this study and used a collection technique, namely purposive sampling. The final results in this study indicate that ROA has a positive and significant effect on stock prices. ROE is negative and significant towards stock prices. Negative shares and insignificant stock prices. BOPO negative and insignificant influence on stock prices. The inflation rate is negative and insignificant towards stock prices. BI Rate has a positive and insignificant effect on stock prices. Simultaneously ROA, ROE, NIM, BOPO, Inflation Rate and BI Rate significantly influence stock prices.

scholarly journals SECTORAL AND FIRM-LEVEL DETERMINANTS OF PROFITABILITY: A MULTILEVEL APPROACH

2018 ◽  
Vol 6 (2) ◽  
Author(s):  
Ivana Blažková ◽  
Ondřej Dvouletý
Keyword(s):  
Growth Rate ◽  
Market Share ◽  
Positive Impact ◽  
Market Concentration ◽  
Firm Level ◽  
Size Number ◽  
Firm Profitability ◽  
Negative Effect ◽  
Equity Ratio ◽  
Food And Drink

The paper aimed to contribute to the literature on the determinants of firm profitability, from the perspective of the Czech economy. We followed a multilevel/hierarchical approach towards the analysis of the sectoral and firm-level determinants of the profitability of companies operating in the Czech food processing industry during years 2005-2012 (622 Firms in 10 Sectors). We assessed an impact of industry (i.e. market concentration, sector growth rate and growth rate of imports) and firm-level characteristics (i.e. market share, firm age, firm size, number of employees, debt/equity ratio and short-term risk) on the return on assets (ROA). Surprisingly, there were no substantial differences between the separate models for industry and firm-level determinants and a combined one. We found a positive impact of market concentration and market share and a negative effect of age and risk-taking behaviour on a firm profitability. Based on these findings, managers in the Czech food and drink industry should pay more attention to the debt policy.

scholarly journals Indicators influencing performance and stability in GCC banking sector

2017 ◽  
Vol 15 ◽  
pp. 408-420 ◽  
Author(s):  
Majed Alharthi
Keyword(s):  
Banking Sector ◽  
Foreign Direct Investments ◽  
Z Score ◽  
Return On Assets ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Vision 2030 ◽  
Generalised Method Of Moments ◽  
Using Data ◽  
Conventional Banks

The main objective of this study is to identify the factors that can impact on the profitability and stability of GCC banks, using data from the period 2005-2014, to achieve GCC Vision 2030. The profitability indicators are: return on assets (ROA), return on equity (ROE), and net interest margin (NIM). In terms of stability, this can be presented through z-score and capital ratio. The statistical regressions in this study are generalised least squares (GLS) and generalised method of moments (GMM). Using both statistical indicators (GLS and GMM) is highly limited in previous studies. The main results for profitability show that stable banks are typically more profitable than instable banks. Moreover, there is a significant and positive correlation between capital ratio and profits – larger banks obtained higher returns. To achieve GCC Vision 2030, GCC banks may benefit from concentrating on lending services. Furthermore, attracting foreign direct investments can enhance banks’ profits. In contrast, outflow remittances badly affect ROA and ROE. As for the findings of stability, z-score and capital ratio impacted each other significantly and positively. Additionally, larger banks were found to be more risky when compared to smaller banks, and lending services support stability with lower insolvency risks. Finally, ROA significantly and strongly affects both stability indicators (z-score and capital ratio). Using the foreign direct investment (FDI) as an independent variable is a contribution to the performance and stability studies in banking. The result indicates that more FDI leads to better profitability in banking sector. In addition, examining the effects of outflow remittances on performance and stability adds to the knowledge. The outflow remittances decreased ROA and ROE but improve NIM significantly. In general, Islamic banks could achieve more profits (with higher insolvency risks) than conventional banks, and are found to be well-capitalised compared to conventional banks

Is sustainability reporting (ESG) associated with performance? Evidence from the European banking sector

2019 ◽  
Vol 30 (1) ◽  
pp. 98-115 ◽  
Author(s):  
Amina Buallay
Keyword(s):  
Banking Sector ◽  
Positive Impact ◽  
Sustainability Reporting ◽  
Tobin’S Q ◽  
Return On Assets ◽  
Tobin's Q ◽  
Financial Return ◽  
Content Type ◽  
Return On Equity ◽  
The Relationship

Purpose Sustainability reporting has been widely adopted by firms worldwide given the need of stakeholders for more transparency on environmental, social and governance (ESG) issues. The purpose of this paper is to investigate the relationship between ESG and bank’s operational (Return on Assets), financial (Return on Equity) and market performance (Tobin’s Q). Design/methodology/approach This study examined 235 banks for ten years (2007-2016) to ends up with 2,350 observations. The independent variable is the ESG disclosure; the dependent variables are performance indicators (return on assets, return on equity and Tobin’s Q). Two type of control variables are utilized in this study: bank specific and macroeconomic. Findings The findings deduced from the empirical results demonstrate that there is significant positive impact of ESG on the performance. However, the relationship between ESG disclosures is vary if measured individually; the environmental disclosure found positively affect the ROA and TQ. Whereas, the corporate social responsibility disclosure is negatively affect the three models. However, the corporate governance disclosure found negatively affects the ROA, ROE and positively affects the Tobin’s Q. Originality/value The results of this study can be used to present a successful model for worldwide banks to concentrate on the role of ESG disclosure in performance.

scholarly journals The Effect of Declarations of Sustainability Reports on Financial Performances of Banks in Turkey

2020 ◽  
Author(s):  
Ömer Dinçer ◽  
Ayşenur Altınay
Keyword(s):  
Human Resources ◽  
Financial Performance ◽  
Banking Sector ◽  
Performance Criteria ◽  
Return On Assets ◽  
Return On Equity ◽  
Sustainability Criteria ◽  
Net Interest Margin ◽  
Sustainability Reports ◽  
Interest Margin

Banking sector is generally taken out of sample while the sustainability performance, and the financial performance are compared with each other. The core aim of this study is to analyze the effect of the declarations made in the cope of sustainability reports on the financial performance in the banking sector. Seven banks were included in the study which were placed at least one time in BIST Sustainability Index in between 2010-2017 years. Environment, human resources, product liability and community involvement were determined as sustainability criteria and return on assets, return on equity and net interest margin were determined as financial performance criteria. Non-Parametric Statistic Tests and Panel Data Analysis were used for analysis and types, and the sizes of banks were selected as dummy variables. As a result, it is found that the declarations of sustainability reports have a significant effect only on return on assets and have no significant effect on return on equity and net interest margin. And also, when we analyzed the relationship of sustainability criteria and return on assets, we found that the declarations about environment and human resources have negative effects on return on assets.

scholarly journals Effects of banking regulation on the performance of the banking sector: Evidence of banks in the Western Balkans

Bankarstvo ◽  
2021 ◽  
Vol 50 (3) ◽  
pp. 36-72
Author(s):  
Almir Alihodžić
Keyword(s):  
Banking Sector ◽  
Positive Impact ◽  
Random Effect ◽  
Banking Regulation ◽  
Capital Adequacy ◽  
Western Balkans ◽  
Return On Assets ◽  
Variable Size ◽  
Return On Equity ◽  
Capital Adequacy Ratio

The main objective of this quantitative study is to examine the relationship between the following independent variables: capital adequacy ratio (CAR), liquid assets to total assets (LATA) and bank size (BS) and dependent variables: return on assets (ROA), credit worthiness indicator (Zscore) and return on equity (ROE) for selected Western Balkan bank countries. This model was estimated using a panel data methodology based on the assumption of a fixed and a random effect as decided in the Hausman test. The results showed that the variable size of the bank (BS) has a positive effect on the return on assets of banks in the Western Balkans, while the variable liquid assets to total assets (LATA) and capital adequacy ratio (CAR) have a negative impact. The results also showed that the variable share of liquid assets in total assets has a positive impact on the creditworthiness indicator of banks in the Western Balkans (ZScore). The third result is the variable return on equity (ROE) and it had the strongest positive impact with the independent variable size of the bank.

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