Financial Performance Of Banks Research Articles

HEALTH LEVEL ANALYSIS OF PT. BANK BJB USING THE CAMEL METHOD

AbstractThis study aims to assess the financial soundness level of Regional Development Bank of West Java and Banten (PT. Bank BJB) during the 2012-2021 period using the CAMEL method. The CAMEL method is used to assess the financial aspects of a financial institution, namely Capital, Asset Quality, Management, Earnings, and Liquidity. This study uses a quantitative approach with a descriptive method, which is carried out by analyzing data from the financial report sources of PT.Bank BJB during the 2012-2021 period. The data used in this study are secondary and are analyzed using various financial analysis techniques. The study results indicate that the financial soundness of Regional Development Bank of West Java and Banten (PT. Bank BJB) during the 2012-2021 period can be stated to be very healthy. This can be the basis for managers to predict the bank's financial condition in the future and take appropriate policies to improve the bank's financial performance. This research has an essential meaning because the level of the financial health of a financial institution can reflect how the bank implements its economic policies.Keywords: Assets, Capital, Earnings, Liquidity, Management

LIQUIDITY CAPACITY AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KENYA

This study determined the effect of liquidity capacity on the financial performance of commercial banks in Kenya. Specific the study determined the effect of Net Stable Funding, Liquidity Coverage, Liquidity Gap and Provisioning for Non-Performing Loans on the financial performance of banks in Kenya. Bank competition variable was used to determine the moderating effect on the relationship between liquidity capacity and the financial performance of commercial banks in Kenya. The study was anchored on the positivism philosophy. The study used an explanatory research design. The study applied panel data models (random effects) based on the outcome of Hausman specification tests to determine the effect of liquidity capacity on the financial performance of commercial banks in Kenya. To test the moderating effect of bank competition variable on the relationship between liquidity capacity and the financial performance of commercial banks in Kenya, Keppel and Zedeck (1989) two-step procedure was used. The regression results revealed that Net Stable Funding and Liquidity Coverage have a significant positive effect on financial performance of commercial banks in Kenya. Provisioning for Non-Performing Loans Liquidity Gap and Provisioning for Non-Performing Loans had a significant negative effect on financial performance of commercial banks in Kenya. The study established that bank competition had a significant moderating effect on the relationship between liquidity capacity and the financial performance of commercial banks in Kenya. Based on these findings, the study recommends that commercial banks in Kenya need to have a good appreciation in terms of having full visibility of all cash flows on the positions of exposures across their operations. Further, they need to have a good insight in terms of the assumptions that drive the cash flows both from a liquidity point of view and from the valuation perspective to best address the terms of requirement from the regulatory standpoint. Additionally, they should empress the stress testing element into the overall equation of their operational activities as prescribed in the Basel III accords. Finally, the study recommends that all commercial banks in Kenya should incorporate liquidity costs, benefits, and risks in the performance measurement, pricing, and approval process for all significant business activities to ensure that the performance of commercial banks in Kenya is enhanced. This research was unable to identify all the possible variables with explanation power on commercial banks’ financial performance in Kenya. Hence, this formed a basis for further research.

An Empirical Analysis of Fintech's Impacts on the Financial Performance of Banks in Kosovo

This analysis aims to empirically investigate the impact of different forms of Fintech on the financial performance of banks in Kosovo from 2010 to 2021. The research is based on secondary data, accounting for 48 observations at quarterly frequencies. The model treats bank performance (i.e., net profits of the bank sector) as an endogenous variable of ATMs, POS, and e-payments. The methodology applied in the research is based on the OLS technique and diagnostic tests for evaluating the normality of distribution, multicollinearity, autocorrelation, specification error, and heteroscedasticity. Results show that the variability of ATMs and e-payments determines bank performance variability. In particular, e-payments show a significant positive impact on bank profitability, whereas ATM payments display a negative impact on bank profitability. In addition, an increase in ATM payments by 1% decreases bank profitability by 0.367%. While an increase in e-payments by 1% increases bank profitability by 0.11%. The POS payments were found to have no significant relationship with bank profitability. Doi: 10.28991/ESJ-2023-07-03-016 Full Text: PDF

Effects of Moderated Audit Committee Operations on Financial Performance of NSE-Listed Banks in Kenya

The research goal was to assess the effect of moderated audit committee operations on the financial performance of the NSE-listed banks in Kenya. The moderator is the CBK prudential guidelines. Likert collected responses were analyzed while the quantitative data from secondary data from the CBK supervisory reports were analyzed using descriptive ad inferential statistics. The research findings showed that the audit committee operations had no statistically significant effect on financial performance of Kenya’s NSE listed banks. The CBK prudential guidelines, which served as the moderator, did not change the fact that the audit committee operations were not statistically significant. Operations of the audit committee assist boards of directors in carrying out their governance duties, improving performance and competitiveness. Nonetheless, the study was carried out during the COVID-19 era, which may have contributed to the aforementioned results. The members of the audit committee should be chosen based on their qualifications, receive ongoing training, and have a designated reporting route to safeguard their independence and neutrality. The report also suggests that policies be established to govern audit functions, compensation, and fees in order to enhance the performance of NSE-listed banks. A suggestion to research the effects of internal audit procedures different from those used by the audit committee on financial performance of the NSE-listed banks in Kenya is imperative.

Shariah governance disclosure and its effect on Islamic banks' financial performance: evidence from Malaysia and GCC countries

PurposeThe purpose of this study is to examine the level of Shariah governance disclosure among Islamic banks in Malaysia and the Gulf Cooperation Council (GCC) countries (i.e. Kuwait, Bahrain, United Arab Emirates, Qatar, Oman and Saudi Arabia). On top of that, the effect of Shariah governance disclosure on Islamic banks financial performance is investigated.Design/methodology/approachData underwent quantitative content analysis and a mean comparison of the Shariah governance disclosure mechanisms as well as multiple regression analysis. Shariah governance information is obtained from the Islamic banks' official websites and the Bursa Malaysia Exchange.FindingsThe results of the content analysis revealed that the level of Shariah governance disclosure among Malaysian Islamic banks has been more pronounced than in the GCC countries. Additionally, the multiple regression analysis results specified that of the five Shariah governance disclosure mechanisms, the Shariah committee emerged as the strongest determinant in the financial performance of the Islamic banks, followed by transparency and disclosure.Practical implicationsIslamic banks should emphasise publishing Shariah governance information in annual reports to reflect superior accounting practices as assessed by certified Shariah auditors with an effective monitoring system.Originality/valueThe empirical findings are vital for serving as a guideline for Islamic banks in Malaysia and the GCC countries to disclose their practice of Shariah governance and gain empirical insights into its effect on firms’ financial performance. Following that, Islamic banks would improve their accounting practices while adhering to Shariah principles, strengthen internal controls and boost their brand reputation.

Basel III Implementation and Financial Performance of Banks in Rwanda: A Case of Bank of Kigali Huye Branch

Basel III Implementation and Financial Performance of Banks in Rwanda: A Case of Bank of Kigali Huye Branch

Effect of Electronic Banking on Financial Performance of Commercial Banks in Rwanda, A Case of COGEBANQUE Plc

According to the BNR information technology was expected to minimize time, distance, and space and expense thus expanding access to affordable financial services. it was found that, electronic banking is allowing banks to change from the traditional channels associated with human assistance to digital channels that operate on self- service basis reducing operational cost and improving efficiency and financial performance. However, some of the previous researchers give contradicting information on e-baking and the financial performance of commercial banks creating a need for sufficient research to be done on this topic. The general objective of this research is to examine the effect of E-banking on financial performance of commercial banks in Rwanda. Specific objectives were to analyze the use of e-banking in COGEBANQUE PLC from 2018 to 2021; to determine the level of financial performance of COGEBANQUE PLC from 2018 to 2021 and o assess whether there is any relationship between e-banking and financial performance of COGEBANQUE PLC from 2018 to 2021; It should be noted that electronic banking plays a great role in financial performance of banks in Rwanda. Different electronic Banking System tools like ATM, ay direct, mobile phone banking, debit/visa card payment and E electronic check payment has a great impact on bank performance because they increase profitability, return on equity and loans, improves bank management quality, increase bank asset and promotes bank growth and expansion. For the case of COGEBAQUE PLC, Adjusted R squared is coefficient of determination which tells us the variation in the dependent variable due to changes in the independent variable, from the findings in the above table the value of adjusted R squared was 0.625, an indication that there was variation of 62.5% on the performance of COGEBANQUE PLC due to changes in Mobile Banking, internet banking, telephone banking, electronic card banking. This shows that 62.5% changes in performance of COGEBAQUE PLC. As conclusion E banking contributes to the performance of COGEBANQUE PLC in spite of few challenges like network failures inadequate skills and security issues possess a great threat to the confidentiality and integrity of banks information.

Sustainable Banking Business Model for Rural Banks in the Philippines

While rural banks have business strategies to generate and exploit opportunities, they may need to be more sustainable. It suggests that their business model needs to consider sustainability's economic, social, and environmental facets. This study used the survey approach for descriptive-correlational research and eighty managers or key employees knowledgeable of the sustainability policies of particular rural banks made up the study sample. The researcher employed quantitative tools to analyze the survey's hypothesis. The associations between the variables of a research model were examined using multiple regression analysis. In addition to conducting structured surveys, the researcher examined secondary data on rural banks' financial performance on the Bangko Sentral ng Pilipinas website. Results revealed that sustainable and sound environmental banking practices and its capital and loan portfolios significantly influence bank financial performance. Thus, the current study suggested a sustainable banking model for Philippine rural banks.

Effects of Mobile Banking on Financial Performance of Equity Bank

In recent years, financial institutions have embraced mobile banking, which has revolutionized their operations and those of other firms. This research sought to determine the effects of mobile banking on the financial performance of Equity Bank. The specific objectives were to determine the financial performance of Equity Bank, to find out the most mobile banking products contributing to the overall financial performance of Equity Bank, to find out the contribution of mobile banking to the overall financial performance, and to determine the mobile banking major strengths, weaknesses, opportunities, and threats. The target population was the employees of Equity Bank. A sample size of 30 employees was selected by stratified and simple random sampling methods from 10 branches of Equity Bank in Nairobi. The data collection was done using a questionnaire. The results were presented in tables with descriptive measures. The results showed that ROE of Equity Bank was 26.1% and ROA was 3.5% in 2022, which increased from the previous year, 2021. The Equity bank had an outstanding financial performance with large profits to which mobile banking products significantly contributed. It was found that Equity Bank produced mobile banking products such as equitel sim cards, which positively influenced financial performance. The major strength of mobile banking was easy to use, and the main weakness of mobile banking was network downtime. The opportunity of mobile banking was accessibility and reliability, while the major threat of mobile banking was found to be hacking. The study recommended that policymakers should reconsider mobile banking in their design of policies due to its expansion and effectiveness. Equity Bank should continue using mobile banking in its operations because mobile banking is one of the ways by which Equity Bank has generated its revenues and has attracted more customers to use its services and products, which has increased its financial performance. However, Equity Bank needs to take more strenuous measures to eliminate the threats of hacking and minimise network downtime. More strategies should be taken by the management of Equity Bank to effectively continue facing the main competitors.

Financial perfomance before and during the covid 19 pandemic on Indonesia soe Banking

The purpose of this study was to analyze the financial performance of Indonesian State-Owned-Enterprise in banking sector before and during the Covid-19 pandemic. So far, state-owned banks have had superior financial performance, but the economic slowdown during the COVID-19 pandemic has hit their performance hard. Secondary data used in this study are collecting from each bank financial report. Financial performance analysis conducted towards Cash Acquisiton Ratio, Non Performing Loan, Loan to Deposit Ratio, and Return On Assets. Then each ratio is compared with the composite banking index. Furthermore, statistical descriptive analysis and paired sample t-test complete the data analysis. This study concludes that there are significant differences in state-owned banking financial performance before and during the Covid-19 pandemic, especially in the decline in Non Performing Loan.

Liquidity Risk and Bank Financial Performance

Liquidity Risk and Bank Financial Performance

Analysis of Banking Performance and Risk in Indonesia during the Covid-19 Pandemic

The banking sector has experienced a decline in demand for credit and a lack of disbursement, which has had an impact on the income of bank credit borrowers. Knowing the financial performance of banks during the Covid-19 pandemic can provide a good explanation of the problems faced by the banking sector. The analysis used in this study was a comparative comparison of two observations using a paired sample T-test. The variables used in this study are ROA, ROE, BOPO, LDR, CAR and NPL. This research found that the Covid-19 pandemic affected the decline in bank performance in general. This can be seen in the values of ROA, ROE, RORA, NPM, LDR, and NIM which have decreased in value before and after the pandemic. This research also found that the COVID-19 pandemic increased bank risk during the pandemic. This can be seen in the BOPO and KPMM variables which have increased from before and after the pandemic.

Corporate Governance and Performance of Commercial Banks Listed at the Nairobi Securities Exchange, Kenya

This study examined the relationships among corporate governance, financial characteristics, macroeconomic variables and financial performance of banking firms listed at the Nairobi Securities Exchange. The specific objectives were to establish the effect of corporate governance on performance of listed commercial banks; to determine the intervening effect of financial characteristics on the relationship between corporate governance and financial performance of banking firms; to establish the moderating effect macroeconomic variables on the relationship between corporate governance and financial performance of listed commercial banks; and to determine the joint effect of corporate governance, financial characteristics and macroeconomic variables on financial performance of listed commercial banks. This study was anchored on, agency, stewardship, resource and wealth maximization theories and positivism philosophy. The study used census approach and targeted population of 11 listed banking firms between 2006 and 2020 was incorporated. The study used panel data extracted from annual reports of the individuals firms, while macroeconomic variables data were extracted from Central Bank of Kenya and Kenya National Bureau of Statistics economic reports. This study used longitudinal descriptive research design to determine relationships amongst independent, intervening, moderating and dependent variables. The study findings indicated that corporate governance, financial characteristics and macroeconomic variables were good predictors of listed commercial banks financial performance. Financial Leverage, Interest Rates and Inflation Rates had a significant effect on Return on Assets while Corporate Governance, Investments, Liquidity and Gross Domestic Product Growth Rate were found to have insignificant effect on Return on Assets. The findings also revealed that Financial Leverage, Inflation Rates and Gross Domestic Product Growth rate had a significant effect on Tobin’s Q of listed commercial banks in Kenya. The relationship between Corporate Governance, Investments, Liquidity and Interest Rates and Tobin’s Q was found to be insignificant. The study concluded that corporate governance, financial characteristics and macroeconomic variables affect financial performance commercial banks. Listed commercial banks therefore should adhere to corporate governance guidelines both from the Central Bank of Kenya and Capital Markets Authority of Kenya for continuous sound financial performance.

Managerial sentiments, non-performing loans, and banks financial performance: A causal mediation approach

The existing literature on corporate disclosures suggests that managerial sentiments are the outcome of the firm's financial performance. We extend this line of research and examine how managerial sentiments emerge in the banks' annual reports are shaped by non-performing loans (NPLs). We use the causal mediation approach, where managerial sentiments are used as the outcome variable possibly affected directly by NPLs or through the mediation of financial performance. Using a sample of large banks from 16 emerging economies during 2007–2018, our casual mediation model results show that managerial sentiments are mainly affected by NPLs reported in banks' annual reports. In addition, the effect of NPLs on managerial sentiments is also mediated through financial performance; however, the effect is relatively low. Taken together, the managerial sentiments stemming from NPLs are particularly valuable for investors as the presentation of NPLs' direct information is inherently ambiguous and difficult to comprehend.

Analysis of the Effect of Capital Adequacy Ratio (Car), Non-Performing Loan (Npl), and Operating Cost Operating Income (Bopo), Net Interest Margin (Nim) to Loan to Deposit Ratio (Ldr) of State-Owned Banks in Indonesia

A bank is an institution with a financial intermediation function that has the authority to raise public funds and also distribute money in the form of loans and other financial services. The purpose of this study is to analyze the effect of Capital Adequacy Ratio (CAR) on Loan to Deposit Ratio (LDR) at State-Owned Banks in Indonesia, 2015 – 2019 and to analyze the effect of Non-Performing Loans (NPL) on Loan to Deposit Ratio (LDR) at State-Owned Banks in Indonesia, 2015 – 2019. This study is a quantitative study. This study uses a hypothesis testing design which is a design aimed at testing the influence between variables where in this case the variables tested are factors that affect bank financial performance. Capital Adequacy Ratio (CAR) has a positive but not significant influence on the Loan to Deposit Ratio (LFR) at state-owned banks in Indonesia in the 2015-2019 period. Non-Performing Loans (NPL) have a negative and significant influence on the Loan to Deposit Ratio (LFR) at state-owned banks in Indonesia in the 2015-2019 period. Operating Costs to Operating Income (BOPO) have a positive and significant influence on the Loan to Deposit Ratio (LFR) of state-owned banks in Indonesia in the 2015-2019 period.

TECHNOLOGICAL DISRUPTION AND DEPOSIT MONEY BANKS FINANCIAL PERFORMANCE IN THE PRE AND POST COVID-19 PANDEMIC IN NIGERIA

The study examined the relationship between technological disruption and deposit money banks financial performance in the pre and post covid-19 pandemic in Nigeria for the period of 2000-2020 (21years). This was done respect of measures of technological disruption, namely; Automated Teller Machine (ATM), Internet Banking (INTB), Point of Sales (POS) and Mobile Transactions (MTs) and how they affects deposit money banks financial performance of in Nigeria {proxy with Return on Assets (ROA)}. The method of data collection used in this study is the secondary source of data (time series data), from the CBN Bank Supervisory Annual Report, CBN Statistical Bulletin and Nigeria Deposit Insurance Corporation (NDIC) Annual Reports for the period 2000-2020. The data set was described using descriptive statistics and the unit root test was conducted to ascertain if the data are stationary in order to have accurate regression result. The correlation analysis will be use to ascertain the co-movement of the independent variables in relation to the dependent variable while the Multiple Regression analysis were employed with the aid of E-VIEW version 9.0 for the purpose of testing the research hypotheses raised. The finding revealed that Automated Teller Machine (ATM), Internet Banking (INTB), Point of Sales (POS) and Mobile Transactions (MTs) have positive and significant effect on Return on Assets (ROA) of deposit money banks in Nigeria. Hence, the study concluded that technological disruption has significant positive effects on deposit money banks financial performance in the pre and post covid-19 pandemic in Nigeria. Based on the findings, the study recommended that deposit money bank management should pay more attention on the activities that will improve the technological disruption channels of their banks if they wish to increase the ROA value of their banks as this will lead to high customer’s satisfaction and patronage.
 Keywords: Technological Disruption, Financial Performance, Deposit Money Banks and Pre and Post COVID-19 Pandemic.

Digitization effects on banks’ financial performance: the case of an African country

PurposeThe concept of digitization covers a wide range of initiatives to achieve sustainable development. This paper aims to determine the impact of bank digitization strategies on financial performance in an African country.Design/methodology/approachThis study used the generalized least squares estimation method to analyze data from a sample of 12 Tunisian banks from 2010 to 2020. The reason for selecting this method was its ability to address issues of heteroscedasticity and autocorrelation.FindingsThis study indicates that digital transformation has a positive effect on Tunisian banks financial performance, as measured by return on assets and return on equity. Specifically, investing in payment tools, digital channels and internet security leads to improved performance for banks. These findings suggest that banks that offer digital services perform better, as they are able to increase profitability, maintain financial stability and improve transparency.Research limitations/implicationsThis study is important for central bank, regulators, policymakers and investors. Overall, this study emphasizes the need for banks in Tunisia to embrace digital transformation to improve their performance and remain viable in the modern business landscape.Originality/valueThis study ponders the effect of Tunisian banks’ digital transformation on financial performance. Tunisia context serves as model for other African countries. Tunisian banks should prioritize investments in digital technologies to stay competitive in the market.

Financial Ratio Analysis To Assess Financial Performance With Bank (Case Study At Bank Btpn Listed On The Indonesia Stock Exchange, 2018-2020)

A bank can be said to be successful if the bank is able and can be measured based on the financial performance of the bank. By looking at the financial performance, it can be concluded that the banking condition is in good condition or not. This study aims to analyze the financial performance of banks listed on the Indonesian Stock Exchange in the 2018-2020 period based on the liquidity ratio with the current ratio and quick ratio, then the solvency ratio with the debt ratio to assets and debt ratio to equity and the last is the profitability ratio with ROA, ROE, and profit margin ratio. This study uses data analysis techniques, quantitative descriptive approach and data collection techniques used in this study are documentation and the data studied are in the form of annual financial reports. The population used in this study is Bank BTPN which is listed on the Indonesia Stock Exchange for the period 2018-2020. The sampling technique in this research is purposive sampling. The results of this study are 4. In general, judging from the four financial ratios, it can be said that the financial performance of banks has decreased in the last year.

An Empirical Study to Measure the Impact of Information Technology Governance Under the Control Objectives for Information and Related Technologies on Financial Performance

Purpose: To determine the effect of information technology governance (ITG) under the control objectives for information and related technologies (COBIT) on financial performance is the objective of this study. Additionally, the article seeks to look into the relationships between the factors under consideration. Theoretical framework: Information technology and operational processes are evaluated and ensure their compliance with the instructions of the Central Bank of Iraq. Therefore, the research dealt with a conceptual framework by reviewing the literature on the importance of the COBIT framework in assessing financial performance. Design/methodology/approach: To investigate the effect of information technology; we the value-added intellectual coefficient approach and a defined corporate governance index were utilized. The performance of the company was assessed using operating efficiency ratio and Economic value Added (EVA). Findings: the results Show there are the high level of application of ITG in the banks listed in the Iraqi stock exchange. Also, we found the effectiveness of ITG under the COBIT framework in banking financial performance. Research, Practical & Social implications: The findings should inform practitioners and legislative institutions of the necessity to follow strong COBIT procedures and enhance the effectiveness of IT to produce a better financial performance for firms. Originality/value: the study is among the first to consider the casual connections and how COBIT policies for ITG affect financial performance in the setting of Iraq.

The Mediating Effect of Corporate Social Responsibility and Corporate Accountability in the Relationship between Corporate Governance and Value-Based Financial Performance of Banks

The Mediating Effect of Corporate Social Responsibility and Corporate Accountability in the Relationship between Corporate Governance and Value-Based Financial Performance of Banks