scholarly journals Determinants of Banks’ Financial Stability in Kenya Commercial Banks

2020 ◽  
pp. 48-57
Author(s):  
Loice Koskei
Keyword(s):  
Exchange Rate ◽  
Regression Model ◽  
Public Debt ◽  
Significant Relationship ◽  
Financial Stability ◽  
Inflation Rate ◽  
Banking Industry ◽  
Multiple Regression Model ◽  
Return On Assets ◽  
Banking Stability

Introduction: The collapse of several banks in Kenya followed by a possibility of acquisition of struggling banks led to bank runs in Kenya causing customers to withdraw their deposits from stressed banks and taking them to financially stable banks. Aim of the Research: The paper investigated the determinants of Bank’s stability as proxied by asset quality in the Kenyan banking sector. Data Collection: Monthly secondary data spanning from the period January 2015 to December 2019 was collected from central Bank of Kenya and Kenya National Bureau of Statistics. Methodology: A multiple regression model with the help of SPSS statistical software was employed to address the objective of this study. Main Results: The multiple regression model results indicated that liquidity ratio; inflation rate and lending rate results presented a negative but statistically significant relationship with banking stability indicating that a decrease in liquidity ratio, inflation rate and lending rates affect banking stability respectively. The results for loan growth and return on equity exhibited a positive but statistically significant relationship with banking stability indicating that an increase in growth of loans and returns on equity diminishes and enhances banking stability in Kenya respectively. Exchange rate results had a positive and statistically insignificant relationship with banking stability implying that exchange rate does not affect banking stability. Return on assets and public debt results indicated a negative and statistically insignificant relationship with banking stability implying that return on assets and a country’s public debt has no effect on banking stability respectively. Recommendation: Banking financial stability is fundamental in reducing the far-reaching social and economic effect that could occur due to challenges facing the banking industry. The study recommends adoption of policies that minimize the negative effect of microeconomic and macroeconomic factors in the banking industry in Kenya.

scholarly journals Non-performing Loans and Banks’ Financial Stability in Kenya; Evidence from Commercial Banks

2020 ◽  
pp. 44-52
Author(s):  
Loice Koskei
Keyword(s):  
Significant Relationship ◽  
Commercial Banks ◽  
Financial Stability ◽  
Inflation Rate ◽  
Global Financial Crisis ◽  
Secondary Data ◽  
Multiple Regression Model ◽  
Vital Role ◽  
Banking Stability ◽  
Loan Growth

The size of non-performing loans plays a vital role in banking stability of any given economy. The paper investigates the resilience and stability of banks amidst the deteriorating quality of its assets since the last Global financial crisis. This study examined the effect of non-performing loans on banks financial stability in Kenya’s commercial banks using secondary data for the period January 2015 to December 2019. A multiple regression model was utilised in analysing the data. Non-performing loans as measured by non-performing ratio had a positive and statistically significant relationship with banks financial stability as measured by Z a-score. The results implied that non-performing loans in Kenya’s commercial banks affects the banks financial stability. Loans to deposit ratio results specified a positive and non-statistically insignificant relationship with banks financial stability. The results inferred that loan to deposit ratio do not affect the banks financial stability. Inflation rate results had a positive but statistically significant relationship with banks’ financial stability indicating that inflation rate affects banks’ financial stability. The results for loan growth had a negative but statistically significant relationship with banks financial stability. The study recommended implementation of measures that curb increase in non-performing loans as they threaten banking financial stability.

scholarly journals Impact of Macro Economic Variables on Return on Assets of Textile Industry of Pakistan

2020 ◽  
Vol 5 (6) ◽  
Author(s):  
Irfan Ullah ◽  
Humaira Noreen ◽  
Zia Ur Rehman ◽  
Naveed Shinwari
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Interest Rate ◽  
Financial Stability ◽  
Direct Investment ◽  
Inflation Rate ◽  
Trade Openness ◽  
Future Research ◽  
Return On Assets ◽  
The Impact

The aim of this study was to find the impact of Inflation rate, Interest rate, Foreign direct investment, Trade openness and Exchange rate on Return of assets of textile weaving sector of Pakistan during the period of 1997 to 2019. The Dependent variable was Return on Assets while Inflation rate, Interest rate, Foreign direct investment, Trade openness and Exchange rate were independent variables, Data for the study was obtained from secondary sources like World Development Indicator, Pakistan Stock exchange and financial stability review issued by State Bank of Pakistan during 1997 to 2019. ROA were collected from Annual reports of the selected textile businesses (weaving sector). The results of Co-integration indicated the long run relationship among the variables. However, inflation rate, interest rate and exchange rate have positive and significant impact on return on Assets of textile weaving sector of Pakistan, on the other hand Foreign direct investment and Trade openness have insignificant effect on Return on assets of textile weaving sector of Pakistan. This paper is limited to linear framework some results may be sensitive to non-linearities, a non-linear frame work should be included in future research.

scholarly journals Islamic Banks’ Financial Stability and Its Determinants: a Comparison Study With Conventional Banks in Indonesia

2018 ◽  
Vol 11 (2) ◽  
pp. 371 ◽  
Author(s):  
Zulfikar Bagus Pambuko ◽  
Nur Ichsan ◽  
MB. Hendrie Anto
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Market Share ◽  
Financial Stability ◽  
Banking Industry ◽  
Banking System ◽  
Stability Index ◽  
Islamic Banking ◽  
Bank Stability ◽  
Banking Stability

<p><em>The research aimed to analyze the stability of Islamic banking industry and its determinants in Indonesia. The same analysis was also done to the conventional banking industry as Indonesia practices dual banking systems. Using monthly data on Indonesian Banking Statistics for 2008-2013, this research implemented the Banking Stability Index (BSI) model for predicting the bank's stability. The analysis began with measuring BSI then using VECM to examine the effect of variables on BSI. </em><em>The result showed that the BSI of both banking system was exhibiting the moderate level of stability though Islamic banking is </em><em>more stable and safe way of financing</em><em> than conventional banking. The shocks of inflation, exchange rate, efficiency, income diversity, liquidity, and Industrial Production Index responded positively by Islamic Bank' stability, while interest rate and market share responded negatively. In another hand, conventional bank' stability responded positively the shock of the exchange rate, income diversity, interest rate, liquidity, and market share, while other variables responded negatively. The results of shocking variables strongly indicated that the conventional banking is more vulnerable than Islamic banking. Islamic banking looked tend to the shock resistance and less volatile. This conclusion, however, might be still questioned as the BSI was not designed specifically for Islamic banking. </em><em>Therefore, constructing an Islamic BSI (under Islamic banking characters) was important to measure the banking stability more appropriate and to develop a proper early warning system for Islamic banking industry.</em></p>

scholarly journals DETERMINANTS OF EFFICIENCY IN ALBANIAN BANKING INDUSTRY; AN EMPIRICAL DIAGNOSIS

2016 ◽  
Vol 4 ◽  
pp. 098-105
Author(s):  
Elona Shehu
Keyword(s):  
Regression Analysis ◽  
Significant Relationship ◽  
Commercial Banks ◽  
Banking Industry ◽  
Banking System ◽  
Capital Adequacy ◽  
Efficiency Ratio ◽  
Return On Assets ◽  
Considerable Decrease ◽  
Bank Efficiency

Many articles discuss the importance of banking systems and their profitability as well as the factors determining these. This article examines the determinants of bank efficiency in the Albanian banking industry. During the second half of this decade a considerable decrease in the efficiency ratio of the Albanian banking system was evident. To understand which factors affected the efficiency, and whether Albania should control certain factors in order to improve efficiency, relationships between particular factors were analyzed using a multiple regression analysis. The study examines 16 commercial banks in Albania, from 1998 to 2015. It finds a significant relationship between efficiency, capital adequacy, the return on assets, and solvency

Impact of Exchange Rate and Jakarta Composite Index on Stock Price: A Case of Pharmaceutical Company in Indonesia

2015 ◽  
Vol 21 (4) ◽  
pp. 823-825
Author(s):  
Nino Manggala Prabha ◽  
Togar Alam Napitulu
Keyword(s):  
Exchange Rate ◽  
Pharmaceutical Industry ◽  
Stock Market ◽  
Regression Model ◽  
Pharmaceutical Company ◽  
Multiple Regression ◽  
Stock Price ◽  
Investment Decision ◽  
Composite Index ◽  
Multiple Regression Model

Stock market is growing in Indonesia and has become an important source of financing for industry in the country. This is true for pharmaceutical industry and as such, predicting the stock price in this industry is deemed very important in making investment decision. It is therefore necessary to know variables that affect stock price in this industry, in particular those that can be easily acquired and have relationship with the stock price. The objective of the study then is to find such variables. It was conjectured that exchange rate and the Jakarta Composite Index were among such variables. A linear multiple regression model was utilized to test such hypothesis. The results indicated that exchange rate positively affects stock price with a magnitude of 0.105 points. Similarly, the Jakarta Composite Index also positively affects stock price with magnitude of 0.417 points. The reliability of this model in predicting the stock price was 63%. Therefore, it is recommended to consider these variables in predicting stock price of the pharmaceutical company, hence important indicators for investors to be considered in making decision whether to buy or not to buy.

scholarly journals PENGARUH ROA, TINGKAT INFLASI DAN NILAI TUKAR RUPIAH TERHADAP HARGA SAHAM

2019 ◽  
Vol 1 (2) ◽  
pp. 23-30
Author(s):  
Selvi Yona Sari ◽  
Neni Sri wahyuni Nengsi ◽  
Desi Permata Sari ◽  
Anisa Tunaswara
Keyword(s):  
Exchange Rate ◽  
Hypothesis Testing ◽  
Significant Influence ◽  
Stock Prices ◽  
Stock Price ◽  
Inflation Rate ◽  
Stock Exchange ◽  
Share Price ◽  
Return On Assets ◽  
Calculated Number

His study aims to analyze the effect of Return On Assets, Inflation Rate and Rupiah Exchange Rate on the share price of banking companies on the Indonesia Stock Exchange. Based on the results of the research processed for the variables Return on Assets, Inflation Rate and Rupiah Exchange Rate on Stock Prices shows the simultaneous and significant influence. This is shown in the results of hypothesis testing with F count. 36.99996> F table 3.06. With a significance of 0.000000 <0.05. The Return On Assets variable is partially negative and insignificant on the Stock Price. This is shown in the results of hypothesis testing with the number t count <t table that is 0.577606 <1.65566 with a significance value of 0.5647> 0.05. Variable Inflation Levels on Stock Prices show a positive and significant influence. This is shown in the results of hypothesis testing with a calculated number of 14.42283> t table 1.65566 with a significance value of 0.0000 <0.05. While the Rupiah Exchange Rate partially has a negative but significant effect on the Stock Price. This is shown in the results of hypothesis testing with the number t -12.45095 <t table 1.65566 with a significance value of 0.0000 <0.05.

scholarly journals Analisis Perubahan Nilai Tukar Rupiah Akibat Peningkatan Inflasi, Tingkat Suku Bunga SBI dan Pertumbuhan Ekonomi (Studi Pada Bank Indonesia Periode 2008 – 2017)

2021 ◽  
Vol 23 (1) ◽  
pp. 20
Author(s):  
Mirna Herawati
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Interest Rate ◽  
Regression Model ◽  
Interest Rates ◽  
Direct Relationship ◽  
Inflation Rate ◽  
Rate Coefficient ◽  
Independent Variables ◽  
The Interest Rate

The purpose of this study was to determine the simultaneous effect of the inflation rate, interest rates and economic growth on the rupia exchange rate. This study also examines the partial effect of the inflation rate on the rupia exchange rate, finds the effect of interest rates on the rupia exchange rate, and economic growth on the rupia exchange rate. The research method used in this study is a quantitative method. The data source used is secondary data in the form of a Time Series. Time-series data is data that is collected over a specified period / period of time. The data collection technique used in this research is the documentary method taken from the Central Bureau of Statistic's data. From the calculation of the F value it is known that 0.00467 < 0.050, so there is a simultaneous influence of the inflation rate, interest rate and economic growth variables on the Rupiah exchange rate. The regression equation is Y = . The inflation rate coefficient for variable X1 is 0.009 and positive. This shows that the inflation rate has a direct relationship with the Rupiah exchange rate. This means that every time one unit of inflation increases, the beta variable (Y) of the rupia exchange rate will also increase by 0.009 with the assumption that other independent variables from the regression model have been corrected. The value of the interest rate coefficient for variable X2 is -0.02 and is negative. This indicates that the interest rate has a direct relationship with the Rupiah exchange rate. This means that each time the interest rate increases by one unit, the beta (Y) variable of the rupia exchange rate will decrease by 0.02 assuming that the other independent variables of the regression model have been corrected. If the value of economic growth (X3) increases one point, then the Y value will decrease by 0.06, assuming that the other independent variables of the regression model are fixed.Keywords: Inflation rate, interest rate, economic growth, rupia exchange rate

scholarly journals Analisis Determinan Dana Pihak Ketiga Bank Umum Syariah di Indonesia

2021 ◽  
Vol 7 (1) ◽  
pp. 154
Author(s):  
Ayif Fathur Rahman ◽  
Yuyun Setiawansi
Keyword(s):  
Exchange Rate ◽  
Linear Regression ◽  
Multiple Linear Regression ◽  
Significant Relationship ◽  
Commercial Banks ◽  
Third Party ◽  
Return On Assets ◽  
Regression Methods ◽  
The Exchange Rate

This study aims to analyze the effect of inflation, exchange rate, BI Rate and Return On Assets (ROA) on Third Party Funds of Sharia Commercial Banks in Indonesia. Data used in the study are Third Party Funds, Inflation, Exchange Rate, BI Rate and Return On Assets (ROA). In this study using multiple linear regression methods and test classic assumptions with the help of Stata application. The results showed that Inflation variable (0,226) had a positive and not significant relationship to Third Part Funds of sharia commercial banks in Indonesia. BI Rate variable (0,000) has a negative and significant relationship to Third Part Funds of sharia commercial banks in Indonesia. While the Exchange Rate (0,000) and Return On Assets (0,000) have a positive and significant relationship to Third Part Funds of sharia commercial banks in Indonesia.

scholarly journals DANA PIHAK KETIGA DAN FAKTOR-FAKTOR YANG MEMPENGARUHINYA PADA PERBANKAN SYARIAH DI INDONESIA

2013 ◽  
Vol 2 (2) ◽  
Author(s):  
Dewi Sartika
Keyword(s):  
Exchange Rate ◽  
Gross Domestic Product ◽  
Regression Model ◽  
Statistical Method ◽  
Financial Statements ◽  
Multiple Regression Model ◽  
Third Party ◽  
Domestic Product ◽  
Islamic Banking ◽  
The Exchange Rate

This study examines the effect of GDP (Gross Domestic Product) and the exchange rate on U.S. dollar against the TPF (Third Party Funds) in Indonesia. The objective of Islamic banking in this study was to analyze the influence of GDP (Gross Domestic Product) Rupiah rate against U.S. dollar deposits (Fund Party Third) of Islamic banking in Indonesia. In writing this makes the GDP (Gross Domestic Product) and the rupiah rate to U.S. dollar as the variables that influence to measure how much influence on Deposits (Third Party Funds). This study used 24 samples comprising the financial statements starting from January 2004 till December 2009. The method used in this study is the statistical method with a multiple regression model, where to find or measure how much influence given by the GDP (Gross Domestic Product) and exchange rate on U.S. dollar against the TPF (Third Party Funds) Islamic banking. The result showed that the variables GDP (Gross Domestic Product) and the exchange rate on U.S. dollar deposits have a significant effect on the Fund (Third Party) Islamic banking in IndonesiaDOI: 10.15408/sjie.v2i2.2426

scholarly journals The Influence of the Macroeconomical Variables on the Bankruptcy Rate of the Romanian Entities Working in the Agricultural Sector

2016 ◽  
Vol 26 (2) ◽  
pp. 38-47
Author(s):  
Maria-Daciana Rodean (Cozma) ◽  
Nicolae Baltes
Keyword(s):  
Exchange Rate ◽  
Regression Model ◽  
Failure Rate ◽  
Default Risk ◽  
Inflation Rate ◽  
Agricultural Sector ◽  
Rate Model ◽  
Macroeconomic Variables ◽  
Explanatory Variables ◽  
Bankruptcy Rate

Abstract The study’s main objective is represented by the analysis of the reasons that lead to the appearance of an agricultural companies’ default risk, based on the failure rate model developed by Wilson. In the construction of the regression model were taken into consideration the evolution of the two macroeconomic variables: the inflation rate and the variation of the exchange rate over a period of 4 years (2010-2013). The research’ results have shown that the variation of the bankruptcy rate registered by the agricultural sector is 99.99% explained by the variation of both of the macroeconomic explanatory variables.

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