Leveraging Financial Technology Entity into Sustainable Bank Performance through a Competitive Advantage

The study investigates the existence of a fintech entity that effect sustainable bank performance through competitive advantage and introduces a new fintech entity as an antecedent of competitive advantage and performance. Analysis of the causes of disturbance of the performance uses quantitative and qualitative approaches. The study uses 59 questionnaires returned from all 70 bank financial managers as a National Commercial Bank Association member. Five informants were selected from the Central Bank of Indonesia, the Financial Services Authority, the Indonesian Fintech Association, a bank business player, and the Commercial Bank Association Management. Using Partial Least Square, the results show that the fintech entity can drive sustainable bank performance, directly and indirectly, through competitive advantage. The existence of fintech is a dominant factor for achieving performance. From the informants, the results show that collaboration with a fintech entity is necessary and initially, the banks in running a business based on a perspective of experience. Moreover, Informants predicted that fintech and competitive conditions would significantly influence performance in the present and the future. Then, the implication is that fintech cannot be avoided but must be embraced as bank cooperation partners to sustain the performance. Doi: 10.28991/ESJ-2022-06-01-04 Full Text: PDF

The road to the 1980s write-downs of sovereign debt

The Latin American debt crisis consumed the 1980s and was not restricted to Latin America. Starting from the August 1982 Mexican weekend, the crisis had three phases: Concerted Lending (1982-5), Baker Plan (1985-9) and Brady Plan (1989 to mid 1990s). This article describes the evolution of the debt strategy and the road to embracing debt write-downs at the end of the decade. In the absence of an external coordinating mechanism, four groups of parties had to reach agreement on any change in the strategy: the borrowing countries, their commercial bank lenders, the home-country authorities of those lenders, and the International Monetary Fund as the principal international institution. Each group could effectively veto any change in the strategy. This need for consensus is lesson number one from the 1980s for today. Lesson number two is that political economy aspects dictated that the strategy be implemented on a case-by-case basis. The article concludes with an application of these lessons to a similar, but even more global, potential debt crisis in the wake of the COVID pandemic.

Optimization of Credit Activity of a Commercial Bank Based on a Parametric Model

In the past few decades, a line of research focusing on the financial portfolios of banking structures has been actively developed in the world’s economic science. The interest in deposit-and-loan portfolios is caused by the rapid growth of both the banking sector and the entire capital market in the world. This paper presents empirical research in the field of analysis of the credit and investment activities of a commercial bank with an extended set of criteria. The team of authors considered a certain approach to parametric modelling of the optimal banking portfolio taking into account unregulated exogenous (macroeconomic) and endogenous (set by the bank) parameters that affect its structure and composition. As part of the proposed method, a list of monitored parameters of the banking portfolio, which was developed due to financial stability and reliability indicators, was compiled. Accordingly, based on calculations with a modified parametric model and assessment of the level of their financial stability and reliability, shortcomings in the structure and composition of the portfolios of the banking organizations under research were identified with respect to the rationality of resource allocation and the adequacy of equity capital. Thus, it was concluded that taking into account the criteria for managing the banking portfolio, measures of profitability and risk, as well as the reliability of the financial and economic base and financial stability of the bank contributes to the growth of its rating and client base, which is especially important for universal commercial banks. Received: 4 September 2021 / Accepted: 22 November 2021 / Published: 3 January 2022

Financial inclusion and gender-induced poverty in Nigeria

The goal of this study was to see how financial inclusion affects gender-based poverty in Nigeria. Commercial bank branches, deposits, and borrowers were the proxy for financial inclusion. The poverty index was used to measure poverty reduction. The World Development Indicator (WDI) and the CBN Statistical Bulletin 2021 provided the data for this study. Finally, the study included the years 2002 to 2019. Financial inclusion reduces household poverty in Nigeria, according to the study, which used a VAR estimate. The coefficients of commercial bank branches and commercial bank deposits were (-0.004) and (-0.008), respectively, indicating that they had a negative influence on poverty reduction. Furthermore, the study discovered that having access to credit through a financial institution was crucial in lowering poverty in Nigeria over the study period. As a result, the report recommends that steps to promote the rule of law, particularly contract enforcement and financial regulatory inspection, be implemented, resulting in more financial inclusion and a reduction in poverty and income gaps, particularly between men and women. The benefits of financial inclusion must be made more widely known, particularly in rural regions, through promoting financial literacy among the poor through education, advertising, and traditional institutions.

Psychological Status of Private Commercial Bank Employees in Bangladesh during COVID-19

On March 8, 2020, the first Covid-19 case was registered in Bangladesh, and the first death occurred on March 18, 2020. Still, the positive corona patients including banking employees are rising around and many negative thoughts are also increasing day by day in mind. These circumstances make the employees worried. Consequently, this paper's fundamental objective is to find out the psychological status of private commercial bank employees during COVID-19. Using a random sampling technique and a questionnaire through "Google Form" the data was gathered from 151 employees. For the completion of the data analysis procedures, the Statistical Package for Social Sciences (SPSS-22 Version) was used. The major findings showed a maximum of 91% of employees felt nervous when s (he) hears someone died from COVID-19. In addition, 83% of employees are always fear of COVID-19 infection, 81% of employees are fear when they hear someone got tested positive for COVID-19. Besides, 49% of bank employees cannot concentrate on their regular activities while 40% of employees are stressed to lose their current job due to COVID-19. The policy-making authorities of private commercial banks in Bangladesh will get an opportunity to know the employees' psychological status during COVID-19. They can also make some necessary measures (based on our recommendations) to overcome these challenges.

INTERNATIONAL FINANCIAL REPORTING STANDARDS AS A TOOL FOR REGULATORY SUPPORT OF OPERATIONS WITH THE LOAN PORTFOLIO OF UKRAINIAN BANKS

The article analyzes the problem of application of information-analytical and regulatory support of operations with the credit portfolio of the Bank, which is currently relevant and Central to successful lending, and therefore to ensure the return of loans and increase the profitability of credit operations. The necessity of forming an effective and efficient system of information-analytical and legal support of operations with the credit portfolio of commercial banks, the main tool of which is the international financial reporting standards, is revealed. It is determined that the requirements of the modern level of globalization are still ahead of the adoption of integration changes regarding the rules and principles of accounting and management accounting by commercial banks of Ukraine. A universal, effective and efficient system of legal regulation of operations with the credit portfolio of a commercial Bank is built on the basis of the study. It is proved that the regulation of operations with the credit portfolio of a commercial Bank can be schematically represented as a hierarchical scheme with 4 levels, where International accounting standards and International financial reporting standards represent the main first level. It was revealed that according to the international financial reporting standards, loans provided by banks belong to the category of financial assets, which are one of the types of financial instruments. The other three levels of the system of legal regulation of operations with the credit portfolio of a commercial Bank, which are derived from the first level, are analyzed. It is concluded that for a more effective organization of accounting it is necessary to harmonize the Ukrainian legislation in accordance with the requirements of International financial reporting standards, and therefore commercial banks with the help of such a system of analytical indicators will be able to constantly monitor changes in the economic system and respond in a timely manner by making appropriate adjustments in case of unsatisfactory developments

The Role of Evaluating the Financial Performance of Banks using Financial Ratios in Determining Economic Growth A Comparative Study between Iraq and Jordan for the Period (2005-2020)

The research aims to analyze the balance sheet disclosure (the assets side and the liabilities side) and their impact on determining the credit policy of Sumer Commercial Bank with a reference to the Jordan Investment Bank, and extracting growth rates for the variables, as well as using the VAR methodology to clarify the functional relationship between the variables of the two sides of assets and liabilities, and the research concluded that there are A significant relationship between the variables based on Kranger's causal analysis, the variables on the assets side had an upward trend resulting from large investments, which formed the vast majority of total assets, in order for the bank to achieve successes in managing bank liquidity, while the bank failed to manage the liabilities side.

RETURN ON ASSETS DAN DETERMINASI FAKTOR-FAKTOR YANG MEMPENGARUHINYA (STUDI PADA BUS NON DEVISA PERIODE 2018-2019)

Return on Assets (ROA) is important for banks. This is because ROA can be used to measure a bank's ability to make profits in general. In the period 2018-2019 there were problems in the financial statements where when Murabahah Financing and Revenue Sharing Financing increased ROA decreased and when NOM increased ROA decreased. The purpose of this study tested the effect of murabahah financing, revenue sharing financing and NOM on ROA on Bank Uumum Syariah Non-Foreign Exchange. The novelty of this research is in the form of research methods used, which have never previously been used with murabahah financing variables, revenue sharing financing and NOM together. This research is a type of quantitative research with panel data regression methods. The sample used amounted to 4 from Non-Foreign Exchange Sharia Commercial Banks using quarterly data for the period 2018-2019. The findings in this study stated that murabahah financing, revenue sharing and NOM partially had no effect on ROA. However, together murabahah financing, revenue sharing financing and NOM affect ROA. The amount of influence given by the three variables to the ROA is 95.34%. Non-Foreign Exchange Sharia Commercial Bank can increase bank profits and maintain bank stability in financing and investment by increasing the three variables together. Return on Assets (ROA) merupakan sesuatu yang penting bagi Bank. Hal ini dikarenakan ROA dapat digunakan untuk mengukur kemampuan bank dalam memperoleh keuntungan secara umum. Pada periode tahun 2018-2019 ditemukan permasalahan pada laporan keuangan dimana ketika Pembiayaan Murabahah dan Pembiayaan Bagi Hasil meningkat ROA menurun dan ketika NOM meningkat ROA mengalami penurunan. Tujuan penelitian ini menguji pengaruh pembiayaan murabahah, pembiayaan bagi hasil dan NOM terhadap ROA pada Bank Uumum Syariah Non Devisa. Kebaruan dari penelitian ini berupa metode penelitian yang digunakan, yang sebelumnya belum pernah digunakan dengan variabel pembiayaan murabahah, pembiayaan bagi hasil dan NOM secara bersama-sama. Penelitian ini berjenis penelitian kuantitatif dengan metode regresi data panel. Sampel yang digunakan berjumlah 4 dari Bank Umum Syariah Non Devisa dengan menggunakan data triwulan periode 2018-2019. Hasil penemuan dalam penelitian ini menyatakan bahwa pembiayaan murabahah, pembiyaan bagi hasil dan NOM secara parsial tidak berpengaruh terhadap ROA. Akan tetapi secara bersama-sama pembiayaan murabahah, pembiayaan bagi hasil dan NOM berpengaruh terhadap ROA. Besarnya perngaruh yang diberikan ketiga varibel tersebut terhadap ROA sebesar 95,34%. Bank Umum Syariah Non Devisa dapat meningkatkan keuntungan bank dan menjaga kestabilan bank dalam melakukan pembiayaan maupun investasi dengan meningkatkan ketiga variable tersebut secara bersama-sama.