Performance Of Indian Banks Research Articles

ANALISIS PENGARUH PROFIL RISIKO DAN RENTABILITAS TERHADAP PERMODALAN SERTA DAMPAKNYA PADA KINERJA BPR KONVENSIONAL DI PROVINSI BANTEN PERIODE 2014 – 2018

The purpose of this study was to determine the effect of the Risk Profile and Profitability on Capital and its impact on BPR Performance in Banten Province. This research data uses secondary data published by the Financial Services Authority (OJK) for the 2014-2018 period, namely the financial statements of 15 BPRs domiciled in Banten Province with the criteria of having total assets above 30 billion. The indicators of this research are the Risk Profile which is proxied by: Non Performing Loans, Loan to Deposit Ratio, Cash Ratio, and Earning Asset Quality, Profitability Indicators which are proxied by Operational Costs, Operational Income, Capital Indicators which are proxied by Capital Adequacy Ratio and Rural Bank Performance Indicators. which is proxied by Return On Asset. The method used is a quantitative method. The data analysis technique used a panel data regression model, and hypothesis testing with the Eviews program and continued with path analysis. The results showed that partially CR has a significant effect on CAR while NPL, LDR, KAP and BOPO have no significant effect on CAR. Simultaneously, NPL, LDR, CR, KAP and BOPO have a significant effect on CAR. Partially NPL, KAP and BOPO have a significant effect on ROA while LDR, CR and CAR have no significant effect on ROA, simultaneously NPL, LDR, CR, KAP, BOPO and CAR have a significant effect on ROA.

Bank performance variability and strands of inflationary conditions

PurposeThis study seeks to examine the extent to which strands of inflationary related conditions (inflation expectations, inflation uncertainty and realized inflation); macroeconomic uncertainty and the likelihood of recessionary conditions influence performance indicators in the US banking sector over a specified time period.Design/methodology/approachThe study adopts seemingly unrelated regression model (SUR) advanced by Zellner (1962) in its examination of how specific strands of inflationary conditions, and other adverse macroeconomic conditions influence performance dynamics in the US banking sector.FindingsEmpirical evidence suggest that among various adverse macroeconomic conditions examined, inflation expectations and macroeconomic uncertainty tend to have significant constraining impact on key performance indicators in the US banking sector than other conditions examined. Comparatively, this study finds that inflation expectations and macroeconomic uncertainty tend to have much more constraining impact on return on equity, than on return on assets in the US banking sector. Results further suggest that among the three bank performance indicators examined, net interest margin is the least vulnerable bank performance indicator to various adverse macroeconomic conditions examined in the study.Practical implicationsApart from the various empirical results noted above, this study's findings are projected to help inform strategic planning decisions among institutions in the banking sector. The various findings could, for instance, inform policies and operational strategies geared toward reducing vulnerability associated with specific performance indicators such as return on equity. This reduction could be achieved by critically examining how the various performance indicators react to individual adverse macroeconomic conditions examined in this study. The process could ultimately help in developing tailored measures/procedures aimed at reducing how susceptible key performance indicators are to the various adverse macroeconomic conditions. This study's findings could also provide the platform for more adaptive policies aimed at minimizing the effects of noted macroeconomic conditions on operational efficiency in the banking sector.Originality/valueThe uniqueness of this study, compared to related ones found in the literature, stems from its treatment of three variant of related strands of macroeconomic condition (different variant of inflationary conditions) in the same framework in its empirical analysis.

Financial Performance of Banks in India: A Study of Selected Private Sector Banks

Financial Performance of Banks in India: A Study of Selected Private Sector Banks

Financial Performance of Banks in India: A Study of Selected Private Sector Banks

Purpose: This study aims to evaluate the performance of selected private sector Banks in India. The aim is also to study the profitability performance of these selected banks.
 Approach/Methodology/Design: Eight private Banks were selected as a sample for the study. The statistical tools employed in the study include Minimum and Maximum Net Profit Ratio, Descriptive Statistics and One-Way ANOVA test for the evaluation of performance of Banks. The period for the study is from 2011-12 to 2018-19, and this study is totally based on secondary data.
 Findings: The results of the study reveal that there is a significant difference of Net Profit of the selected banks. The financial performance of HDFC Bank is continuously in a good condition due to the high profit earned and the proper management that is employed. The results indicate that Yes Bank is in a deteriorating financial position because of governance issues, false assurance to customers, non-serious investors, non market-led revival in sight, outflow of liquidity, and non-disclosure practices. Axis Bank and ICICI Bank are slowly declining within the market. Jammu and Kashmir Bank suffered losses in the year 2016-17 due to the tune of Rs 16,000 crores during the five months long unrest in the Kashmir valley.
 Practical Implications: In today’s scenario, most of the banks have more Non-Performing Assets. Due to this condition, many banks go to liquation and merger/acquisition. This paper attempts to examine the current conditions of selected private sector banks in India, assisting in presenting statistical analysis that will be of use to investors as well as management teams of the banks.
 Originality/value: Nowadays, Banking sector is one of the fastest growing sectors and huge funds are invested in banks. The banking system is becoming more complex and therefore there is a strong need to evaluate the performance of the banks. The originality in this study lies in the attempt to provide up-to-date assessment of eight top banks in India.

Developing a Scale for Measuring Non-Financial Service Performance of Islamic Banks in Pakistan

The intention of this research is to develop a measure by which non-financial service performance of Islamic banks can be analyzed. Research methodology comprises of qualitative and quantitative phase. Simple random sampling has been applied to select Islamic banks branches from Multan. In qualitative phase through purposive sampling 10 in depth interviewees were conducted from managerial employees with the help of interviewee guide and scale items were generated to explore non-financial service performance elements. A questionnaire was developed and self-administered questionnaire based survey was performed in quantitative phase. Out of 150 distributed questionnaire 111 complete responses were received and analyzed by applying exploratory and conformity factor analysis with the help of software Smart-PLS. Findings of the study suggests that key performance indicators of Islamic banks are non-financial in nature .Scale contained 40 items. Total 6 factors with Eigenvalues > 1 containing 40 items with factor loading >.7 were extracted and total variance explained was 80%. Variance explained by each factor is as follows 1.Marketin and Sharia board performance, (15items 29.9%)2 Training(7items12.78%), 3.Corporate social responsibility(5items 11.43%) 4.Operational performance(5 items 9.6% VA), 5.Management commitment(4 items and 9.0% VA)and 6.Employee commitment (4 items and 7.16% VA). This research in the form of the scale provides a detail, reliable measure by which non-financial performance of Islamic banking can be comparatively analyzed at bank and branch level. Future corners of improvements can be identified which will result in increasing customer satisfaction, employee satisfaction and service quality improvements.

COMMERCIAL BANKING PERFORMANCE AND ECONOMIC GRPWTH: THE CASE OF TUNISIA BETWEEN 19902018

In this paper, we propose to assess the efficiency scoretechniques of 10 Tunisian commercial banks for the period cover 1990 to 2018. The local banking landscape was marked, during the period studied, by significant changes following the adoption by the Tunisian government, of various financial liberalization measures as well as the period of the subprime crisis and then the revolution of 2011. Given studying the technical efficiency levels achieved by Tunisian commercial banks, we propose a non-parametric method, the approach DEA, data envelopment analysis, on the one hand, and the determination of the variables explaining the level of performance on the other. Our results allow us to conclude that the banks which obtained the best average efficiency scores are: Amen Bank (100%) and Arab Tunisian Bank (98.9%). Whereas, other banks are considered inefficient. To study the impact of banking performance indicators, a variable that measures the crisis, Equity, total assets, and total liabilities on the efficiency scores calculated by the DEA methodology, return on assets (ROA) and return on equity (ROE), we used an ECM error correction model in panel data. The results show the positive impacts of these indicators on banking performance in Tunisia.

A study on liquidity risk management of selected commercial and private banks in India

The study aims to know the financial performance is analyze using ROA, ROE, ROAA and ROAE. The study on financial performance , liquidity risk management and impact of liquidity risk in both top line and bottom line for selected commercial and private banks in India using e-view software & to know the performance of Indian banks during demonetization and how it has effect the financial performances of banks .The banks need to control and closely monitor the NPL in order to reduce the NPLR with the purpose for better performance of the banks and there is a timely need for the management of the commercial & private banks to maintain their liquidity gap at a safe level in order to avoid the negative impact on the performance of the banks. The risk on bottom line is effect by having low net income earned by banks .The top line performance is effected by more non performing ratio in banks because ROA , ROAE and ROE is showing significant to NPL with P value less than 5 %.

Board characteristics and performance of Indian banks

This paper aims at investigating the impact of variables explaining board characteristics of Indian banks on their performance. Forty eight Indian banks, covering the time period from 2008-2009 to 2017-2018 have been included in the sample. The variables explaining board characteristics of Indian banks which have been included are board size, CEO duality, board independence, gender diversity, age and tenure of the CEO and the chairperson. After incorporating other bank specific variables such as net interest margin, burden ratio, bank capital, liquidity, size, loan quality and macroeconomic variables such as economic growth and inflation, the results show that banks with female CEOs, younger CEOs and CEOs with larger tenures perform better than banks with male CEOs, older CEOs and CEOs with smaller tenures. The other variables representing board characteristics which have come out to be significant determinants of bank performance are board size and tenure of chairperson of the board.

Does board effectiveness matter for bank performance Evidence from India

This study examines the impact of board effectiveness on bank performance over the period 2005/06 to 2016/17. An attempt is made to assess the link, both at aggregate level using board effectiveness index, and at disaggregate level, by exploring the effect of board composition, board structure, board activity, and board independence separately, on bank performance in India. The board's influence on the performance of public and private bank groups is also explored. The econometric results obtained using bias-corrected least squares dummy variable approach suggest that overall board effectiveness does seem to have an impact on the performance of public sector banks, while only board composition significantly explains performance of private banks in India. At disaggregated level, the CEO duality, female directors, and trained independent directors on board exert a positive impact on the bank performance. Finally, the nominee directors exert a negative influence on the performance of private banks.

ANALYSIS OF THE FINANCIAL STATUS OF THE BANKING SECTOR OF UKRAINE

Considering the significant negative impact of financial crises on the banking sector in Ukraine, issues related to the assessment of the financial condition of banks are becoming particularly relevant. Analysis of the impact of the global financial crisis on the activities of Ukrainian banks in recent years has led to the conclusion that an effective, working mechanism for anti-crisis management has not yet been developed, focused on forecasting, overcoming, and limiting the spread of the crisis in the banking system. In this study, we analyzed the state of the banking system of Ukraine, the factors of crises that affected the financial condition of the banking sector of Ukraine in the context of 2009-2019; studied the main performance indicators of banks currently operating in Ukraine; analyzed the financial results of banking activities; Identified systemic risks that operate in the banking sector, as well as the largest risk factors for the financial sector. Calculated indicators of financial stability indicated the existence of systemic risks. According to the results of our study, the dynamics of the ratio of non-performing loans pointed out that the banking system of Ukraine, along with the unstable political and general economic situation, further increases systemic risks for the banking system and for the economy in the entirety; analysis of the Z-score indicator confirmed the presence of systemic risks and clearly demonstrated the duration and level of the crisis; an analysis of the dynamics and the political component of the country's incapacity index indicated that now Ukraine is in the most volatile situation in the last decade.

The Effect of Disclosure and Transparency Criteria In Saudi Banks on The Financial Ratios Indicators

The study aimed to measure the effect of applying the disclosure and transparency standards criteria adopted by the Saudi Arabian Monetary Authority on improving performance indicators in the Saudi banking sector, by measuring the extent of the impact of the bank's financial indicators represented by liquidity, profitability and return on assets in Saudi banks by applying the criteria of disclosure and transparency, which is one of the Main principles in the list of governance, which was approved by the Saudi Arabian Monetary Authority. The analytical approach was followed to achieve the goal of the study, as the financial statements of Saudi banks were analyzed during a period of 8-year to test four hypotheses related to measuring the presence of statistically significant differences between the performance indicators of banks before and after applying the disclosure and transparency standards imposed on Saudi banks. The results of the research confirmed the existence of an inverse relationship between the bank’s liquidity and the percentage of Saudi banks ’profits. The more liquidity, the lower the profitability level of banks, which indicates that the high liquidity in Saudi banks has led to a low profitability in this time period, and the study recommended that The need to pay attention to the concept of disclosure and transparency among all related parties in Saudi banks, and banks should find a balance between liquidity and profitability

Using Granger Causality to Determine Interconnectedness in Unlisted Banking Markets

The proposed model allows to identify the interconnectedness of the banking sector where banks are nonlisted by using causal relationships (direct and indirect) between bank performance indicators. Model was applied to three separate banking markets in Baltics for time period 2014-2018. The results show that least interconnected banking sector is in Lithuania, followed by averagely interconnected Estonian market and highly interconnected Latvian banking market. Model was also able to distinguish bilateral bank pairs with no interconnectedness. This study shows that interconnectedness tests should be based on various performance indicators as banks are able to herd through various channels.

Financial Performance of Banks in India: Are Banks Sound Enough to be Banked Upon

The seemingly untamable Non-Performing Assets are leading the Indian banks towards a highly unstable environment. The financial soundness of the banks is mandatory for any economy considering it is one of the most significant and a pre-requisite of a stable economy. The present study examines the financial performance parameters of banks with a probable variation among public and private sector banks for a period between 2005 and 2018. The study is divided into three sections. The first section studies the financial performance of the Scheduled Commercial Banks (SCBs), Public & Private Sector Banks in three identified time bands of last thirteen years. The second section assesses the probable variation in asset quality among Private and Public Sector Banks through statistical inferences. The third section finally examines the probability of variations in asset quality in the three time bands identified in the study. The study concludes a very high volatility among the SCBs during the said period and found Private Sector Banks to be more consistent and bore better stability parameters compared to Public Sector Banks. The statistically inferred results through T-test, Welch test and Post-Hoc test support a significant variation among both the sectors along with presence of significant variations in asset quality.

Female Leadership and Performance of Indian Banks

Female Leadership and Performance of Indian Banks

Impact of liquidity risk on the performances of Sri Lankan commercial banks

This study investigates the impact of liquidity risk on the performance of commercial banks in Sri Lanka by analysing secondary panel data of six systemically important banks in the Sri Lankan financial system from 2006 to 2016. The objective of this study is to identify the significant liquidity risk factors and the impact of them on both top line and bottom line performance indicators of commercial banks. Researchers find that liquidity gap and non-performing loan ratio are the significant proxies for liquidity risk. Multiple regression analysis reveals that liquidity risk negatively and significantly affects bottom lines Return on Average Assets (ROAA) and Return on Average Equity (ROAE), whilst positively affects the top line Net Interest Margin (NIM) of the commercial banks. The findings of this study suggest that expenses of the banks should be controlled with better liquidity management to enhance bottom line performances.

Growth and Performance of State Co-operative Banks in India: An Analysis

Growth and Performance of State Co-operative Banks in India: An Analysis

Business Sustainability Performance Evaluation for Taiwanese Banks—A Hybrid Multiple-Criteria Decision-Making Approach

The Taiwanese government has encouraged bank privatization and the establishment of financial holding companies to improve banking sustainability and consolidate banks, insurance companies, and securities firms. It is important for bank decision makers to set policies that lead to sustainable development. However, the literature remains unclear about the types of banks that achieve greater business sustainability. This paper aims to (1) identify the criteria that affect banks’ business sustainability and (2) determine the most sustainable types of banks. This study uses a hybrid multiple-criteria decision-making approach on eighteen financial criteria for twenty-five Taiwanese listed banks with data from 2012 to 2016. The results show that non-performing loan ratio is the most critical factor. In addition, financial holding companies outperformed non-financial holding companies. Financial holding companies with insurance companies as their largest subsidiaries performed best. Private banks exceeded state-owned banks in sustainability. The results lead to two implications. First, banks should value risk over profitability and diversify financial products. Second, the government should continue to privatize banks. These findings suggest that bank managers implement an enterprise resource planning (ERP) system with a master plan, framework, and guidelines to help them track bank performance indicators to ensure sustainability.

The Effectiveness of Prudential Regulations for Banks: Global Perspective and Indian Context

Banking regulations intend to protect the interest of depositors, reduce the risk of bank failures, minimize the moral hazard, and strengthen the financial stability by controlling the behavior of financial system participants and by building financial buffers. In countries like India, where banks dominate the financial sector, banking regulations assume added significance. This paper provides a global perspective on the prudential regulations and examines the extent to which the regulations could mitigate the risk of financial crises. It also analyses the role of macro-prudential regulations in achieving financial stability and its interaction with micro-prudential regulations. It further delves into the role of regulations in catalyzing financial innovations and hence, indirectly contributing to irrational exuberance and excessive risk-taking in the financial system. Certain other issues deliberated upon in this paper include a need to closely look at the nature and design of prudential regulations with a view to reducing complexities in regulatory and supervisory processes, and evaluation of the role of regulations in growth, governance, and performance of banks in India. The paper looks at the movement of credit to GDP ratio, the GDP growth trajectory, and a periodic emergence of credit gap in the Indian context, and discusses the utility of credit gap as an indicator for macroprudential policy in India. This paper also analyses the pattern and movement of gross and net NPAs of the Indian banks and its relations with regulatory forbearance and supervisory processes. It suggests a continual need for strengthening institutional credibility for improving the effectiveness of regulatory and supervisory processes so as to achieve stability, transparency, and robustness in financial institutions and financial markets.

FINANCIAL INCLUSION AS AN INDICATOR OF MANAGEMENT OF BANK COMPONENT OF THE STATE FINANCIAL SECURITY

It is established that financial inclusion is an instrument that is capable of transforming savings into investment and, therefore, it can be an effective tool for raising the level of financial sovereignty of the state and stabilizing its financial security. The necessity of updating methodological approaches to assessing the financial security at the macro level was substantiated by supplementing the list of indicators of the state of the banking component of the financial security system of Ukraine by the indicator of financial inclusiveness in the banking sector. The definition of financial inclusion in the sphere of banking services and of management of bank security is offered. It is found out that World Bank analytical materials are currently the only relevant source of information about the level of financial inclusion in different countries of the world, and in national economies internal experts do not assess the level of financial inclusion. Taking into account this circumstance, it is suggested, using the information of domestic statistics, to formulate judgments on the state of financial inclusion in the sphere of banking services by indicators that characterize the level of use different types of banking operations by population and business structures. An analysis was made and a critical comment on the financial inclusion of Ukrainians to the banking services segment as of the beginning of 2018 was provided. It has been established that in Ukraine the level of financial inclusion in the last few years is lower than the value that is inherent for its global indicator. Assumptions regarding availability of reserves in the financial system of Ukraine for the growth of the level of financial inclusion in the future are made. Based on a retrospective analysis of financial results and key performance indicators of banks in Ukraine, the need to take measures to increase the level of financial inclusiveness of the population and business entities based on the growth of their interest in the use of banking products and services has been substantiated. The possibilities of using the indicator of financial inclusion level as an indicator of the state of the banking component of the state financial security management are revealed.

Tougher than the rest? The resilience of specialized financial intermediation to macroeconomic shocks

This paper uses a unique and comprehensive dataset comprised of 41 years of detailed banking data from the German building society industry to provide empirical evidence of the resilience of specialized financial intermediation (SFI) to macroeconomic shocks. Compared to studies on the German banking industry, we show that SFI is extremely stable despite generally less diversified revenue streams. We are also able to illustrate the impact of various economic conditions and cycles on the interactions between the building society sector and macroeconomic development. We use a VAR approach to demonstrate that 1) macroeconomic and mortgage-specific market shocks have limited or no impact on the banking performance (return on equity) or distress (write-off) indicators, and 2) the results of previous studies showing that financial rewards lead to higher bank funding stability on a contractual level also hold when analyzing data on an institutional level. As much research has found, and as the recent worldwide financial crisis highlighted spectacularly, banking stability is fundamental to the overall stability of financial systems and economies as a whole. Therefore, our results contribute to the ongoing discussion of whether specialized financial intermediation can indeed lead to more stable banking systems.