Performance Of Banking Industry Research Articles

The Influence of Human Resource Management in Banking

In this study, we examined how HRM practises in Kuwait's banking sector affected employees' affective, continuing, and normative organisational commitment Permanent, full-time, and part-time employees are available members managers and non-managers alike from The study included five organisations.Kuwait is dominated by large private banks. The link between these variables was investigated using both exploratory factor analysis (EFA) and hierarchical regression analysis. The findings revealed that, due to factors like culture and values, 50% of the variables agreed with prior study, while 50% of the variables did not. The findings have important ramifications for both the international trade and Kuwait's banking industry. Due to the fierce global competition, businesses are becoming more aware of the importance of HR. Furthermore, efficient One important source of competitive advantage that helps firms succeed is human resources. As a result, By utilising cutting-edge techniques like coaching, HRM is making investments in its people resources to help them grow abilities and improve organisational performance. In this essay, the impact of coaching on worker performance in Lebanon's banking industry is examined. By researching coaching creative and motivating intervening strategies that result in improved employee performance, It aims to close the market gap in Lebanon. This study examines how coaching influences employee creativity and motivation, which has an effect on employee performance, using a case study that is qualitative technique within an experimental framework.

Executive compensation and firm performance: Evidence from Nepalese commercial banks

NRB provision to relate executive’s fixed annual compensation with staff salary and total assets of the respective Banks is different from those of other country (Bhatta, 2010). This is the first study to examine the relationship between executive compensation and firm performance in Nepalese banking industry. Data are collected from 21 commercial banks from the study period 2014/15 to 2020/ 21. Panel data are analyzed through pooled OLS and fixed effect model by using three control variables (i.e. Leverage, size and risk). Result showed that executive compensation is not influenced by firms performance in Nepalese commercial banks. Result also revealed that pay performance relationship is not influenced by size of the firms. It is concluded that possible reason for this insignificant relationship is contradict and impractical compensation directives issued by NRB, as claimed by (Bhatta,2010)

Intervening Role of Sustainability Practices in the Nexuses of Responsible Leadership and Environmental, Task, and Contextual Performance

Purpose: The current study assessed the function of responsible leadership in the banking industry using the stakeholder theory. The current study also looks into the connection between responsible leadership and task, contextual, and environmental performance.
 Methodology: The banking industry's 389 branch employees, including branch managers, business development officers, general banking officers, branch operation managers, cash officers, and relationship managers, were surveyed using a survey questionnaire approach to gather data. Mplus was used to analyze the data using the structural equation modeling method.
 Findings: The study's findings showed that ethical leadership had a direct influence on a firm's environmental (0.204), task (0.365), and contextual performance (0.188), as well as indirect effects through varied sustainability policies.
 Implications: it implies the significance of sustainable policies concerning responsible leadership and a company's success. The current study is a pioneering effort that added to the body of knowledge on the relationship between organizational tasks, contextual performance, and environmental performance in Pakistan's banking industry. It also evaluated the role of sustainability strategies in the interim.

Credit Risk Management Can Gear Up Bank Performance – Moderating Effect of Interest Rate in Developed Countries

This research explores the role of interest rate as a moderator in credit risk management, influencing the performance of banking industry in selected developed countries using a two-step GMM model. The annual data of the top 10 banks of the selected 10 developed countries ranging from 2001 to 2020 was used. The developed countries or G-10 are Belgium, Canada, France, Germany, Italy, Japan, Sweden, Switzerland, the United Kingdom, and the United States, which are the originators of the Basel Accords. Bank performance, proxied by ROA, ROE, ATO, and NPM, is dependent. Interest rate is a moderator, independent and indexed, developed after netting off lending interest rate (LIR), interest rate spread (IRS) & net interest margin (NIM). The credit risk management index (CRM index) was derived after netting off the effects of extra ordinary financing of net loans and leases, negativity of nonperforming loans, and secured cushioning of risk-weighted assets. The results confirmed that CRM improves the growth of banking, especially in case of ROA, ROE, and NPM, improves more by the induction of the moderator of the interest rate index and enhances more with the induction of the interaction. This research guides for rearranging the determinants of CRM, identifying loopholes of CRM, fixing interest rates, and looking after natural fixation of interest rate. CRM policies should be stringent, security analysis must be centralized, offered interest rate must be natural and savings must be used in a productive usage rather than multiple financing at lower interest rates. The research contributed two indexes, the CRM index and the interest rate index (IR index), which were developed by NPLs, NLLs, RWAs and LIR, IRS, and NIM, respectively. The results highlighted that loanable fund theory is starving without remedial measures of CRM for leakage of “credit”, drainage of “capital” or seepage of “money”. The researcher selected ten developed countries with the 10 highest scoring banks in a period of 2001-2020 and used a two-stage GMM technique.

The Impact of COVID-19 on Bank Efficiency in the Western Balkans: A DEA Approach

Abstract This paper aims to assess and compare the relative efficiency of commercial banks in six Western Balkan developing countries (North Macedonia, Serbia, Montenegro, Bosnia and Herzegovina (B&H), Kosovo1, and Albania), using the leading nonparametric methodology Data Envelopment Analysis (DEA) for the period 2016-2020, and investigating the impact of the COVID-19 pandemics on the performance of banking systems in these countries. The output-oriented DEA model has been implemented with interest expenses and non-interest expenses as inputs and interest revenue and non-interest revenue as outputs. Our findings show that the average efficiency of the six Western Balkan banking systems differs, and Kosovo’s banking system has noted the highest average efficiency in the whole observed period (2016–2020). In contrast, the banking system in Bosnia and Herzegovina noted the lowest average efficiency. The COVID-19 pandemic decreased the relative efficiency of the banking sectors in all six of the Western Balkan countries observed, except Kosovo. However, additional research that includes all pandemic years is recommended to assess the impact of the COVID-19 pandemic on the banking systems in the Western Balkans. This study provides invaluable insights for academic members, banking management and regulatory bodies, governments, and the interested public. It is the first empirical study that includes a glimpse of the first impact of the COVID-19 pandemic on banking systems in the developing countries of the Western Balkans.

A Model for Enhancing the Information Security Management Systems in Yemen Banks

Exposure of valuable assets of Yemen banking sector to various attacks and threats may violate the privacy, confidentiality, integrity and accessibility (availability) of their data, information or computer systems resulting in financial and valuable loss. Such a violation may adversely affect the continuity of the business and the competitive advantages they seek to achieve. The objective of this paper is to evaluate the current security performance of banking systems in Yemen and to introduce a framework for improving information security management based on the ISO 27002-2013 benchmark and standards. The proposed framework includes important security factors which are people, technology and process. IBM SPSS AMOS is applied for testing framework hypothesis on complex variable relationships and gain new insight. Such framework shows that the process variable has obtained the most direct positive effect on improving information security management system with value (0.990), while the technology variable has obtained the second direct positive effect on improving the information security management system with value (0.930). Finally, the people variable has obtained the least direct positive effect on improving the information security management system with value (0.740). The research methodology includes: data collection, data analysis, reliability testing and computing results. The model validated and compared with other similar models available in the literature and the results were in valid range. Also, the research hypotheses were significant and deferent results of the proposed model were very promising.

THE MACRO-PRUDENTIAL POLICY AND BANK NON-PERFORMING ASSETS IN INDONESIA

<em><span lang="EN-US">This study examines the effect of the Macro-prudential Intermediation Ratio (MIR) as an instrument of Bank Indonesia's macro-prudential regulation on Non-Performing Assets (NPA) as one of the banking industry performance indicators in Indonesia. In addition, this study also examines several other independent variables such as bank assets as an indicator of bank size, Bank Indonesia interest rates (BI rate), and inflation as macroeconomic indicators and their effect on NPA. The NPA, MIR, and bank asset data used in this study consist of 109 commercial banks operating in Indonesia during the period from January 2015 to December 2020. This study uses an Ordinary Least Square (OLS) analysis approach by undertaking classical assumption tests and statistical tests. The results show that (1) MIR, bank assets, BI rate, and inflation simultaneously have a significant effect on NPA (2) Partially, bank assets have a negative and significant effect on NPA while other variables including macro-prudential policy have no significant effect on NPA (3) Variable MIR, bank assets, BI rate, and inflation can explain variations of NPA variable by 34% (4) Larger bank size encourages prudent financing and reduces NPA.</span></em>

Impact of HRM Practices on Organizational Performance and Growth with Reference to Pakistan Public and Private Banks

HRM practices play a vital role in organizational performance of banking sectors. The objective of this study is to determine how Human Resource Management processes have impacted the organizational performance of public and private banking industry in Pakistan, for that purpose, a public bank i.e. National bank of Pakistan (NBP), and a private bank, United Bank Limited (UBL) was selected. In the current company environment, HRM strategies are essential for two key reasons: talent cultivation and employee motivation. A questionnaire was used to collect quantitative data from both the banks, and the aim of the study was explanatory. The survey was completed by an estimated 270 employees from NBP and UBL from various divisions. The analysis was conducted using SPSS version 22, specifically the Regression and Correlation functions. According to the research, NBP and UBL, Karachi's hiring practices had no bearing on organizational performance. Other HRM strategies, like as training and development, performance evaluation, remuneration, and incentives and recognition, favorably influence organizational performance. According to researchers, the study's results are useful for public and private banking sectors of Pakistan. The results of this study may be beneficial not just to the participating banks, but also to other financial organizations.

Enhancing employee performance through the application of dispute resolutions in the banking industry

This study examined the effect of dispute resolution strategies on employee performance in the Nigerian banking industry. Two variables were discussed; compromising strategy and integrating strategies as they affect employee performance in selected banks in Delta State. The sample size for the study was 162 respondents. A simple random sampling technique was adopted. Validated structured sets of questionnaires were used, the primary instruments for data collection. The study adopted descriptive statistics and frequency analysis. A test of hypotheses was done using regression analysis. The study found that there were positive and significant effects of compromising Strategy and integrating strategy on employee performance. The study concluded that integrating g strategy has a major effect on employee performance in Nigeria's banking industry and Nigeria banks should improve on integrating strategy because it would go a long way in enhancing employee performance and that integrity in the banks could have been achieved through strong moral principles and moral uprightness in financial transactions. It is recommended that Efforts should be made by management to organize seminars/workshops on organizational dispute resolution strategy from time to time for the employees. This will enable employees to learn about disputes and how they can be effectively managed for organizational effectiveness. Credible channels of communication and open discussions of disputes in work relations must be encouraged in an attempt to avoid confrontation, unhealthy competition, and domination as dispute resolution strategies. The study contributed to knowledge by developing a model that explains the relationship between dispute resolution and employee performance in the banking sector and also provided a framework that explains the necessity of dispute resolution and how it relates to employee performance in an organized setting.

ICT adoption, bank performance & development in Sub-Saharan Africa: a dynamic panel analysis

ABSTRACT This paper examines the effect of information and communication technology on bank performance and development in the Sub-Saharan African banking industry. We employ a generalized method of moments technique with a panel data of 35 sub-Saharan African countries on the access and use of automated teller machines, mobile money transactions, return on assets, returns on earning, and net interest margin. The results reveal that while the access and use of automated teller machines are negatively associated with return on assets, they have positive and significant effects on return on earning and net interest margin. The findings suggest that information and communication technology adoption affects bank performance mainly in the short run. We conclude that the discrepancy in how it affects return on assets compared to return on earnings and net interest margin is mainly based on how bank performance is measured.

Digitization and Financial Performance of Banking Sectors Facing COVID-19 Challenges in Central and Eastern European Countries

The COVID-19 pandemic deeply impacted not only human wealth but also all segments of the economy as well as the field of technology. Thus, the purpose of this paper was to analyze the effects that the pandemic crisis and digitization have had on the financial performance of banks in Central and Eastern European Union countries (CEEC) during the 2010–2021 period. In order to capture an overview of the financial performance of the banking systems in the 10 CEECs, we used three variables—ROA, ROE and NPL—as reference indicators. In order to highlight the impact of the COVID-19 pandemic on the performance of banking systems, we used the number of reported cases as a variable, and to highlight the impact of digitization, we used as indicators the number of automated teller machines (ATMs) per 100,000 adults, number of certificates of secure internet servers, number of credit cards, number of debit cards, percentage of individuals using internet banking, and the number of commercial bank branches per 100,000 adults. Thus, the impact of digitization and the pandemic crisis generated by the COVID-19 virus on the performance of the banking systems in the 10 CEECs is outlined through three regression models using the robust regression model. The obtained results show that, as the infection rates with COVID-19 increased, the performance of banks measured by ROE and ROA decreased. Regarding the impact of digitization on performance, we note that an increase in the use of internet banking and the security of bank servers generated positive effects on the performance of banks. The results of the study are useful for banking product development departments, who should consider the important role of digitization in increasing the performance of banking services and thus design new digital products or ways to expand existing ones on a larger scale.

Assessing the Impact of the Covid 19 Pandemic on the Banking System Performance

The outbreak of the Coronavirus, which has caused a global crisis, has affected all aspects of human life. This pandemic has also seriously challenged the business environment, monetary and financial markets, and the performance of banks in countries. Accordingly, this paper aims to answer the question: “What is the impact of the COVID 19 pandemic crisis on the performance of the Canadian banking industry? Thus, the main purpose of the study is to investigate the impact of the Covid-19 pandemic on the performance of the Canadian banking industry. For this purpose, the related literature was systematically reviewed to extract performance indicators. Then, a quantitative approach and a multiple case study strategy were used to examine the hypotheses and answer the questions. So, three Canadian banks including RBC bank, TD bank, and BMO were selected as cases. Document- and records-based method used to collect public data from official, and well-known economic and financial sources. For data analysis, structural equation analysis and correlation test were considered using Amos 28 and APSS 27. Based on the results, although the Covid-19 pandemic has shocked the Canadian banking industry, like many businesses, but because of its high capabilities, they have been able to manage the crisis well and come out of it successfully. The results show that the average profitability and efficiency of Canadian banks decreased slightly during the pandemic period, but it was not significant. In addition, during this period, business risk has increased slightly, but this situation has gradually returned to normal. Plus, some indicators such as the average of ROE, ROI, EPS, etc. after passing the initial shock, they have found a better position than the pre-crisis. Considering the newness of the pandemic and the lack of similar knowledge and experience that has surprised people, the results of this research contribute to the theoretical development of the literature, and its results can be used in the financial, banking, and commercial fields. Since the basis of the investigations was limited to the data of only three banks, therefore, it should be a little cautious in generalizing the results.

Financial Innovation, Financial Patents and Business Performance: An Empirical Study on the Banking Industry in Taiwan

There have been a lot of discussions on financial patents abroad, while the number of domestic fintech patent applications is still small. In view of the past research on financial innovation and financial patents on company performance, the results are inconsistent. Therefore, in this study, a panel data model of the impact of financial innovation and financial patents on business performance in Taiwan's banking industry from 2005 to 2020 is constructed, and the performance determinants of financial innovation and financial patents are further explored. This study also uses the data envelopment analysis (DEA) to distinguish between those who have invested in financial patents and those who have not and compares the difference between their efficiency. Finally, the sample is divided into public and private banks, and financial holding and non-financial holding banks to further examine the differences in the influencing factors of the sub-samples. The results show that non-financial holding banks continue to improve their technical efficiency to keep up with the fierce competition in the banking industry.

MIFID II and EMIR impact on Romanian banking system performance

Abstract MIFID II/MiFIR represents comprehensive financial market reforms in trading and settlement of financial instruments. The greatest impact of the new regulatory framework in the banking sector relates to pricing, trading, and reporting of banking products and classification of financial institutions. The new role of the financial market infrastructure provides more protection for bank customers and significantly increases market transparency. Banks are required to show their customers the best execution price on the relevant trading venues, transaction costs and market behavior. The regulation will be aligned with other financial market regulations of over-the-counter markets and market abuse protection to avoid regulatory overlap - European Market Infrastructure Regulation (EMIR). The new regulatory framework requires the banking sector to fully comply with the rules governing the banking system of the European Union. Banks must incur significant costs in order to restructure internal processes, acquire new technological support, and forego additional profits in competitive and transparent markets. This study analyses the impact of MiFID II/MiFIR and EMIR implementation on local banks’ performance (credit institutions, Romanian legal persons). Using a unique dataset from banks that have been operating in Romania over the period 2004-2020, it is shown that the implementation of the new regulatory framework did not affect the net trading income ratio of the selected banks. Moreover, the average trading asset ratio in the post-financial crisis period increased in comparison with the average trading asset ratio in the pre-financial crisis period. Local banks that took advantage of the large economies of scale obtained due to branch banking did not reduce their investment banking activities and product offerings to customers in the period following the introduction of the regulatory framework. Most of the costs of implementing the new regulatory framework were borne only by the ultimate parents of the controlled Romanian subsidiaries. All subsidiary banks benefited equally from these economies of scale.

COVID-19: boon/disguise for Indian banks?

Non-performing assets (NPAs) have long been one of the most visible and frightening issues that have shaken the whole banking industry around the world. As a result, the study's primary goal is to elucidate the facts surrounding NPAs, which have harmed the Indian banking industry's soundness, profitability, and performance between 1998–1999 and 2019–2020. The future trends NPAs across ownership types and sectoral groups were also explored. The estimations of NPAs drivers are examined in the second stage regression analysis, which takes into account factors such as innovative COVID-19 and policy initiatives. Later, a clear ranking for 52 samples in Indian banks was utilised to verify stability using the ratio of net NPAs to net advances. During the pre-crisis and crisis periods, gross NPAs and net NPAs as a percentage of gross advances both fell dramatically, according to the trend analysis. During turbulent years, however, they significantly rose. Finally, we noticed that the asset quality of scheduled commercial banks and public sector banks is improving following a seven-year gap during the COVID-19 years. In a Phase II regression analysis, this scenario was thoroughly explored for Indian banks and statistically proved that severe policy actions and the negligible influence of the unique COVID-19 crisis contributed to a decrease in their NPAs ratio during 1999–2020. Credit expansion, recognition and resolution of non-performing assets via the Insolvency and Bankruptcy Code Act, recapitalization of PSBs, and ongoing reforms in the COVID-19 period are all major contributors to sporadic credit default in SCBs and PSBs' balance sheets—which began in 2017–2018 and continued in 2019–2020.

Voluntary Disclosure, Cost of Capital and Performance of Indian Commercial Banks

The relationship between voluntary disclosure, cost of capital and performance of the Indian banks has been examined in this study. The sample of 32 Indian commercial banks has been taken to study this relationship for the observation period of 2013–2014 to 2017–2018. The voluntary disclosure score is calculated by framing an index of 121 items of voluntary information published in the annual reports of Indian banks. The results of panel regression analysis show that there is no significant relationship between voluntary disclosure and cost of capital. Further the results of study also reveal that bank performance does not mediate the relationship between voluntary and cost of capital in case of Indian banking sector, as the results of the interaction term of voluntary disclosure and performance are found to be insignificant. The findings suggest that that voluntary information disclosed in the annual reports of banks is not up to par to guide investors in their investment decisions and to understand the risks. Therefore, it does not influence the cost of capital. This article contributes to the existing literature by exhibiting that benefits of lower cost of capital associated with voluntary disclosure do not hold true for all industries. Additionally, the relationship between voluntary disclosure and performance of the banks is found to be significantly positive in this study. This research will add to the existing literature as no prior study has studied the simultaneous relationship between voluntary disclosure, cost of capital and performance in the context of a developing country. In particular, this study is the first to analyse the simultaneous relationship between voluntary disclosure, cost of capital and performance of banking industry in the context of a developing country by taking the sample from Indian banks.

Digital Financial Services on Financial Performance of Commercial Banks in Nigeria

Since the introduction of information communication technology and the widespread use of the internet, the banking business has undergone considerable changes. Information and communication technology (ICT) is at the heart of Nigeria's current worldwide shift curve in the electronic banking system. In light of this, this study looked into the influence of digital financial services (DFS) on the financial performance of Nigeria's publicly traded commercial banks. The study aims to see if there is a link between the dependent variable, which is financial performance as assessed by banks' earnings-per-share (EPS), and the main independent variables, which are the volume of ATM and POS transactions as a proxy for digital financial services (DFS). Secondary data was employed in the study. The data was collected from the annual report of target banks and the Central Bank of Nigeria from 2012 to 2020. The study used both descriptive and inferential statistics in analysing the data. In general, the study revealed that digital financial services (DFS) have substantial and significant marginal effects on earnings per share in Nigeria’s banking sector. Thus, there exists a positive relationship between digital financial services (DFS) and bank financial performance. In conclusion, electronic banking has made banking transactions to be more accessible by bringing services closer to its customers hence improving banking industry performance. Thus, the study recommends that bank management should enhance digital banking to improve financial performance in commercial banks.

A cross-country analysis on diversification, Sukuk investment, and the performance of Islamic banking systems under the COVID-19 pandemic

This study investigates the relationship between diversification and Islamic banking systems' performance under the impact of the COVID-19 turmoil using a sample of 24 countries from 2013Q4 and 2020Q4. The findings indicate that the performance of Islamic banking systems is positively associated with sectoral diversification of Shari'ah-compliant financing and income diversification. Although this study confirms a negative impact of the COVID-19 shock, income diversification is found to mitigate the adverse effect of this health crisis on the performance of the Islamic banking systems. In which, Sukuk investment is considered an essential channel for pursuing this diversification strategy. Therefore, this research has important implications for policymakers, managers, and academics.

Benchmarking the banking sector of Bangladesh: a comprehensive analysis of performance and efficiency

PurposeThe economic development of Bangladesh is heavily reliant on the banking industry, yet it faces numerous hurdles, including liquidity issues, capital shortages, non-performing loans, inefficiencies and so on. Therefore, this study investigated the performance and efficiency of scheduled banks (state-owned, private commercial, foreign commercial and specialized banks) operating in Bangladesh.Design/methodology/approachThe research was conducted using secondary data from annual reports of banks. The CAMELS rating system and Data Envelopment Analysis (DEA) methods were employed to measure the performance and efficiency of banks, respectively.FindingsIn the overall bank rankings, results revealed that foreign commercial Standard Chartered Bank and state-owned Sonali Bank Limited came in first and last position, respectively. Among the four categories of banks, foreign commercial banks were the best performer, while state-owned banks were the worst. Only two banks, i.e. Citibank NA and HSBC Bank, were scale efficient while the remaining banks were inefficient. In terms of performance and efficiency, state-owned and specialized banks were deemed wanting.Practical implicationsThis study proposes recommendations to the policymakers that could lead to more effective tactics for improving the banking industry's performance and efficiency.Originality/valueAs far as the authors are concerned, this study presents empirical evidence on the performance and efficiency of different types of banks and explores comparisons among them, which has never been done to this extent in the country before.

The effect of economic growth on banking system performance: An interregional and comparative study of Sub-Saharan Africa and developed economies

As an important part of the financial sector, banking systems play a critical role in economic development as well as in improving the quality of life of the people of sub-Saharan Africa (SSA). However, little evidence exists in the literature about the performance of the banking systems in SSA compared with developed economies. This paper investigates the effects of economic development on banking performance across 23 SSA countries and 14 developed countries between 1981 and 2018. Using estimation models such as feasible general least squares, fixed-effects estimation with Driscoll-Kraay standard errors, and system and difference generalized method of moments, our findings show that in SSA as a whole, economic development has a positive impact on commercial bank lending, raises lending rates, increases the amount of domestic credit to the private sector (DCPS), and reduces the number of nonperforming loans (NPLs). In developed countries, economic development has a positive impact on lending rates, DCPS, and the number of NPLs. However, although economic development in developed economies has mostly positive effects on banking performance, SSA countries have more performance issues in banking as a whole and in regional pockets. A careful reassessment of SSA’s interregional banking system is therefore highly recommended. An increase in the number of NPLs in East and Southern Africa, a decline in deposit rates offered in Southern, West, and Central Africa, and increasing real interest rates in SSA despite economic growth are some of the concerns that require careful reassessment and policy adjustments.