Capital Ratio Research Articles

Analisis Tingkat Kesehatan Bank Nagari Syariah Menggunakan Metode RGEC

The purpose of this study was to measure the health level of Bank Nagari Syariah using the RGEC method. The research method used is descriptive quantitative method. The data collection technique used is documentation. The data analysis technique uses ratio analysis contained in the assessment of the bank's health level using the RGEC method. The results showed that the health level of Bank Nagari Syariah in 2017-2022 was in a good rating. In 2017-2018, the Financing to Debt Ratio was in an unhealthy state. But in 2019-2022 the bank has been able to improve its performance. The Net Performing Financing ratio is in a healthy state from year to year. The profitability factor shows that the bank is able to make a profit from its operational activities. Operating Expenses to Operating Income are categorized as healthy. The Good Corporate Governance factor shows that the implementation of the bank's operational structures and processes is in accordance with the regulations set by the OJK. The Capital factor is calculated by the Capital Adequacy Ratio and is in a very healthy state. The health level of Bank Nagari Syariah is in a healthy position.

Impact of Financial Risk and Macro-Economic Variable on Stock Return: Evidence from Commercial Banks of Nepal

This paper examines the impact of financial risks and macroeconomic variables on the stock returns of commercial banks in Nepal. The study focuses on four main types of financial risks: credit risk, market risk, capital risk, and liquidity risk, alongside bank size, return on assets (ROA), and dummy variables for COVID-19 and earthquake impacts. Additional macroeconomic variables include economic growth, inflation, and interest rates. Using panel data regression on yearly data over 11 years for 20 commercial banks, the study investigates these factors' causal impacts on stock returns. The findings indicated that capital risk and liquidity risk negatively affect stock returns, suggesting that higher capital adequacy ratios limit high-risk, high-return investments, and higher liquidity risks lead to financial instability. Credit risk and market risk, however, did not impact stock returns. Larger banks faced negative stock returns, likely due to management complexities and inefficiencies. Economic growth and inflation positively impacted stock returns, reflecting economic optimism and increased activities, while higher interest rates negatively affected returns by increasing borrowing costs. The COVID-19 pandemic had a positive impact due to increased stock market activity amid limited investment opportunities, whereas the 2015 earthquake negatively affected returns as efforts focused on rebuilding. These insights underscore the need for robust risk management and consideration of broader economic conditions in investment and policy decisions.

Which One Is The Most Important In Bank: Liquidity Or Capital Resiliency?

This research aims to examine the fulfillment of the Liquidity Coverage Ratio (LCR) and Capital Adequacy Ratio (CAR) of banks towards bank credit growth in Indonesia. The researchers included macroeconomic factors (GDP and BI Rate) as control variables and bank size (core capital category) to support the research testing. The influence of LCR and CAR on bank credit growth with KBMI categories 2, 3, and 4 during quarterly periods (Q4 2018 - Q2 2023) is tested using multiple linear regression. The study findings indicate that banks that enhance liquidity management by increasing the LCR can lead to a reduction in credit distribution. However, the CAR does not have a major influence on credit growth. This is because bank capital in Indonesia is very robust. The relationship between the LCR and credit growth in all KBMI categories is not significantly influenced by the core capital category of banks. In addition, the KBMI has a little impact on the correlation between CAR and credit growth in KBMI banks 2 and 3, but it does have a moderating effect on KBMI 4 banks

The Effect Of Interaction Between Non-Performing Loans And Operating Expenses On Capital Adequacy Ratio As Moderated By Return On Equity

This study aims to analyze the effect of interaction between non-performing loans (NPL) and Operating Expenses to Operating Income (OEOI) ratios on capital adequacy ratio (CAR) as moderated by return on equity (ROE). A quantitative approach was used in this research. The data in this research were secondary ones and they were obtained from the annual financial statements for 2018-2020 period from commercial banks listed on Indonesian stock exchange (IDX). As many as 42 commercial banks served as the research population. From this number, using the requirement of having complete financial statements for 2018-2020 period as the criteria, 30 commercial banks were sampled purposively. The data were analyzed using multiple linear regression and moderating regression analysis (MRA). This study found that both NPL and operating expenses had a negative effect on CAR. However, while the former’s effect was significant, that of the latter was not. From the moderation regression analysis, it was revealed that ROE could not moderate the NPL’s effect on CAR, yet it could moderate the impact of OEOI on CAR.

The Impact of the COVID-19 Pandemic on Banking Liquidity: A Case Study of Various Bank Types in Indonesia

This study aims to examine the condition of banking liquidity in Indonesia during the COVID-19 pandemic, utilizing linear regression to analyze factors influencing the liquidity of commercial banks in Indonesia from March 2020 to June 2023. The dependent variable used is the Loan Deposit Ratio (LDR), while the independent variables include Capital Adequacy Ratio (CAR), Return on Assets (ROA), Non-Performing Loans (NPL-gross), and Credit Restructuring Ratio to total Credit. The results reveal that CAR has a significant negative effect on the liquidity of Regional Development Banks (BPD), State-Owned Enterprises (BUMN), Private Banks, and Overseas Bank Branch Offices (KCBLN). Conversely, ROA has a positive and significant impact on state-owned banks but is not significant for BPD, private, and KCBLN banks. The NPL ratio does not significantly influence liquidity across all types of banks. Credit Restructuring Ratio negatively affects BPD and positively affects KCBLN, but it does not have a statistically significant effect on State-Owned and Private Banks. This research is unique as it is the first to examine commercial banks in Indonesia during the pandemic, providing valuable insights into the factors affecting bank liquidity during this period. The findings highlight the importance of maintaining adequate capital and profitability to support bank liquidity, especially during economic crises.

Analisis Pengaruh Inflasi dan CAR terhadap Pembiayaan Murabahah pada PT Bank Aceh Syariah

This research aims to analyze the influence of Inflation and Capital Adequacy Ratio (CAR) on Murabahah Financing at PT Bank Aceh Syariah. The data used is Time Series data for the period September 2011 – June 2018 with a quantitative linear regression analysis method. The results of the discussion show that the Inflation variable is partially insignificant and has a negative relationship to distributed Murabahah Financing, while the CAR variable is partially significant and has a positive relationship to distributed Murabahah Financing. However, inflation and CAR simultaneously have a significant effect and are positively related to distributed Murabahah financing. These two independent variables are able to explain the dependent variable by 51.6% of the Adjusted R Square value and the remaining 48.4% is influenced by other variables.

Do banks adjust their capital when they face liquidity shortages? Evidence from U.S. commercial banks

AbstractWe investigate how small and large banks behave when they face liquidity shortages. Our findings reveal that only small banks increase their capital ratios during episodes of liquidity shortages. They do so by downsizing but also by holding less risky assets and by reducing their lending. Furthermore, the increase in capital ratios is higher for small banks which are more reliant on market liquidity and small banks operating below their target capital ratio. On the whole, our findings show that small banks operate prudently whereas large banks are less concerned. Our work has strong implications for bank regulation and supervision.

Islamic Banking and Financial Development: A Cross-Country Analysis

Islamic banking has become an integral part of the modern financial system. Therefore, this study examined the effect of Islamic banking on financial development in countries with a matured practice of Islamic finance. These countries include Iran, Saudi Arabia, Malaysia, UAE, Kuwait, Qatar, Turkey, Bangladesh and Indonesia. Besides, we collected data on Islamic banks' assets and financial development indicators over nine (9) years between 2012 and 2020. The study applied heteroscedastic panel corrected standard errors (HPCSE) regression model to estimate results. The findings indicated that Islamic banks contribute significantly to improving financial development after controlling for banking characteristics (credit risk and capital adequacy ratio) and macroeconomic factors (real per capita GDP, inflation and trade openness). Due to data limitations, this study covers only nine countries over nine years (2012 -2020). The findings provided insight into the contribution of Islamic banks to financial development, which can motivate regulatory authorities and policymakers to improve the practice of Islamic banking and finance through the provisions of enabling and motivational regulations and policies. This study provided a novel contribution as this issue is underresearched. Most existing studies concentrate on the macroeconomic and institutional determinants of financial development, thus relegating the role of Islamic banking in spurring financial development.

Analisis Rasio 3 - Bank Komersial dengan Uji - Rls: Implikasi dan Bukti Kinerja Keuangan Bank Indonesia dan Malaysia

Abstracts This research aims to analyze the interaction between commercial banks in Indonesia and commercial banks in Malaysia on bank financial performance reports seen from the ratio aspect of bank financial reports. The method used in this research is a quantitative descriptive method by knowing the existence of the Dependent variable value on the variable (Independent) or more without making relationships and comparisons with other variables. In terms of bank value using the 3 - RLS implementation route, namely, the bank's Profitability Ratio is calculated by looking for Return on Assets (ROA), Return on Equity (ROE), Net Profit Margin (NPM), and Operating Expenses / Operating Income (BOPO). The Liquidity Ratio is calculated by finding the Quick Ratio (QR), Loan to Deposit Ratio (LDR), and Loan to Assets Ratio (LAR). The Solvency Ratio is calculated by looking for the Capital Adequacy Ratio (CAR) and Debt to Equity Ratio (DER). The results of this research evaluate and see the feasibility of 3 commercial banks in Indonesia and Malaysia against the Central Bank using the Triple - RLS method concept. As for commercial banks, there is policy integration with central bank criteria. Therefore, there needs to be discipline and commitment in improving financial performance in financial reports between Indonesian and Malaysian commercial banks.

Modeling the risk of bank default

This paper is devoted to modeling the probability of default of Russian banks in 2015–2020. There are relatively few studies on defaults of Russian banks after 2015, and our work intends to partly fill this gap. The purpose of this research is to determine the main variables which significantly impact the risk of default of Russian banks. The work seeks to identify additional factors associated with an increased risk of bank defaults during a relatively stable period of development of the Russian economy (2015–2020) without external shocks, such as COVID‑19 or international sanctions. We apply an integrated approach to modeling the risk of bank defaults. Empirical methodology is represented by logit and probit models, as well as Cox regression. The set of potential predictors for bank defaults include the variables, characterizing various aspects of credit institutions functioning (in accordance with the CAMELS system), as well as macroeconomic variables. The most significant predictors of default turn out to be the capital adequacy ratio N1, bank net assets, the ratio of total loans to assets and the size of secured loan portfolio. In general, the results we obtain are consistent with the CAMELS system of indicators assessing the sustainability of commercial banks, while the impact of macroeconomic indicators tends to be insignificant. The results of the study could be of interest to the regulator both for the purposes of ongoing monitoring of financial stability as well as for default risk prevention; to credit institutions which elaborate internal systems for monitoring their financial soundness; and to financial market participants to select the most stable companies in terms of investment and allocation of funds. Further directions of research are related to the inclusion of a crisis period into the analysis and comparing the set of significant predictors for bank defaults during a crisis and a stable period of economic development, as well as the use of alternative methods, in particular, machine learning algorithms.

Capital and profitability: The moderating role of economic freedom

Using the GMM framework, this paper examines the nexus between capital and profitability in the presence of economic freedom using annual data of US banks ranging from 2002 to 2022. consistent with both the financial stability and regulatory hypotheses, the present study's empirical findings reveal that economic freedom exerts a positive moderating influence on the relationship between bank capital ratio and profitability. The findings are heterogeneous across banks' specific characteristics and market conditions. Furthermore, the results are robust to alternative proxies of profitability. The study's finding is beneficial for policymakers and regulators as liberalization is not always adversely impact the economy; rather, it's a double-edged sword, and they must maintain that delicate balance. The conclusions of this study have meaningful implications for senior bankers and policymakers when formulating strategies for preserving bank value. Specifically, it highlights the importance of considering the interactive role of economic freedom in their decision-making process.

Capital Structure and Financial Performance of Manufacturing Companies in Nepal

In the present competitive globalized business environment, capital structure is a debatable issue in finance, and how firms mix debt and equity to minimize the cost of capital to accelerate firms’ financial performance. Financial performance is influenced by various factors, and capital structure is one of the key factors. Therefore, this study intends to investigate how capital structure (CS) influences financial performance measured by the return on capital (ROC) and net profit margin (NPM) of manufacturing companies in Nepal. This paper employs descriptive and causal research designs to examine the impact of CS on financial performance in Nepalese manufacturing companies. The correlation result explores the positive relation of financial performance with debt to common equity. An inverse association is observed with debt to assets, long-term debt to equity, and long-term debt to capital ratios. The regression result reveals that more debt to equity-capital plays a significant positive role in enhancing financial performance measures such as return on capital employed and net profit margin. Regression results conclude that higher utilization of debt to assets, long-term debt-equity, and long-term debts to capital adversely affect financial performance. Therefore, Nepalese manufacturing companies should manage and control the utilization of their long-term debt to maintain optimal capital structure, which enhances maximizing their financial performance. The implication of this paper is for policymakers, executives, regulatory bodies, and academics to make decisions about capital structure and financial performance in Nepal.

Evaluating the influence of corporate governance mechanisms and bank-specific factors on the performance of Nepalese commercial banks

This purpose of the study is to evaluate the influence of corporate governance mechanism factors: board size, board independence, capital adequacy ratio, as well as bank-specific factors: dividend payout ratio and firm size, on the performance of Nepalese commercial banks. The study covered 10 years’ secondary data from 2013/14 to 2022/23, derived from the annual reports and websites of four selected commercial banks that were listed on the Nepal Stock Exchange: Kumari Bank Limited, Himalayan Bank Limited, Prabhu Bank Limited, and Prime Commercial Bank. A non-probability sample method, especially the purposive sampling approach, was used in this study. Earnings per share (EPS) is regarded to be the dependent variable, whereas two elements, namely, corporate governance mechanisms and bank-specific factors, are considered to be independent variables. Data analysis was carried out using the SPSS 25 software, which includes descriptive statistics, Pearson correlation, and multiple linear regression. The empirical results indicate that board size has a favorable influence on EPS, but this association does not reach statistical significance. In contrast, board independency has a notable and statistically significant negative impact on EPS. The capital adequacy ratio is positively correlated with EPS. However, the impact of firm size on EPS is not statistically significant. On the other hand, the dividend payout ratio has a significant positive effect on EPS.

Identifying the Determinants of Dividend Payout Ratios in Nepalese Commercial Banks

The banking sector in Nepal has experienced significant growth since its formal inception, playing a crucial role in the country's economic development. This study aims to explore the factors influencing the dividend payout ratio in commercial banks of Nepal. The research is based on secondary data to analyse the commercial banks operating in Nepal. Quota sampling was employed to select seven banks, and data were analysed using descriptive and analytical research designs, along with statistical tools like regression analysis. The findings reveal that liquidity ratio and bank size have a significant positive impact on dividend payout ratios in Nepalese commercial banks. However, variables such as leverage, capital adequacy ratio, and profitability ratios exhibit insignificant relationships. Additionally, significant differences in dividend payout ratios, return on assets, leverage, and capital adequacy ratio were observed among different bank types. Higher liquidity ratios and larger bank sizes correspond to higher dividend payout ratios, indicating their pivotal role in shaping dividend policies in Nepalese commercial banks. Banks and financial institutions may focus on managing liquidity and expanding their size to enhance the dividend payout ratio.

PENGARUH PERPUTARAN MODAL KERJA, PERPUTARAN PERSEDIAAN DAN PERPUTARAN PIUTANG TERHADAP PROFITABILITAS

The phenomenon of declining profitability of manufacturing companies from 2018-2020 causes investors to need to know the company's activities through the working capital turnover ratio, inventory turnover, accounts receivable turnover. Therefore, this study aims to determine the effect of working capital turnover, inventory turnover, accounts receivable turnover on profitability in manufacturing companies listed on the Indonesia Stock Exchange in 2018-2020. The method applied to process research data is a quantitative-descriptive method with data from the financial statements of the manufacturing sector from 2018-2020. From the results of multiple regression analysis using SPSS 25.0, it is known that working capital turnover has a significant negative effect on profitability. Meanwhile, inventory turnover has no significant negative effect on profitability. Accounts Receivable Turnover has no significant positive effect on profitability.

Evaluasi Perubahan Segmentasi Kinerja Keuangan PT. KB Bukopin, TBK Sebelum dan Sesudah Akuisisi dengan Metode K-Means Clustering

This study aims to evaluate changes in the segmentation of PT KB Bukopin Tbk's financial performance before and after Kookmin Bank's acquisition. This study uses the K-means clustering method using secondary data in the form of financial data taken from the official website of the Indonesia Stock Exchange, IDX.co.id. The results of the k-means analysis showed that the change in BBKP segmentation from Category 4 (cluster E) in 2019 to Category 3 (cluster C) in 2023 showed significant changes in the company's financial stability and capital adequacy. This research reveals that post-acquisition strategies and policies have successfully made a substantial impact on BBKP's financial structure, as evidenced by a positive increase in the solvency ratio (DER) and capital adequacy ratio (CAR). However, the decline in return on assets (ROA) indicates that operational efficiency is required to improve profitability. The results of the comprehensive and ongoing evaluation show how important it is to thoroughly understand the impact of acquisition activities in the banking industry.

The Influence of Company Fundamentals and Director Characteristic towards Fair Value Measurement in the Indonesian Banking Industry

Fair value is part of the International Financial Reporting Standards (IFRS) which attract attention of researchers due to its controversial issues. Studies investigating factors influencing opportunistic behaviour through fair value figures in developing countries are limited. This study aims to investigate the effect of company fundamental factors on fair value. This research applies multiple regression of banking companies listed on the Indonesia Stock Exchange from 2018 to 2022. The fundamental factors, as independent variables are return on equity (ROE), ratio of operating expense on operating income (OEOI), capital adequacy ratio (CAR) and the proportion of female directors. Meanwhile, the dependent variable is fair value through modelling calculation i.e. fair value level 3 inputs. This study found that only OEOI significant influence fair value level 3 inputs. Meanwhile, ROE, CAR, and the proportion of females in the board of directors does not significant influence on fair value level 3 inputs. The study implications Indonesian banking industries should prioritize fair value disclosure, especially at level 3, as it provides crucial information about a company's performance and condition, potentially enabling investors to evaluate its performance.

Financial Performance Analysis of Bank Aceh's During the Covid-19: RGEC Approaches

The Covid-19 pandemic has had a significant impact on various sectors in Indonesia, including the banking industry. This study aims to compare the financial performance of PT Bank Aceh Syariah before and during the Covid-19 pandemic using the RGEC (Risk Profile, Good Corporate Governance, Earnings, Capital) analysis method. Secondary data used in this research were obtained from the financial statements of Bank Aceh Syariah published on the bank's official website. Data analysis was conducted using the independent sample t-test hypothesis testing. The results indicate that there were no significant differences in the ratios of Non-Performing Financing (NPF), Financing to Deposit Ratio (FDR), Good Corporate Governance (GCG), Return on Assets (ROA), Return on Equity (ROE), Operating Expenses to Operating Income (BOPO), and Capital Adequacy Ratio (CAR) between the periods before and during the Covid-19 pandemic. These findings suggest that Bank Aceh Syariah has been able to maintain its financial performance despite the challenges posed by the pandemic. This study contributes to the understanding of the resilience and adaptability of Islamic banks in the face of economic shocks and highlights the importance of robust risk management and governance practices in ensuring financial stability during times of crisis.

Analisis Perbandingan Kinerja Keuangan PT Bank Syariah Indonesia, Tbk dan PT Bank Muamalat Indonesia pada Tahun 2020-2023

The purpose of financial statements is to provide data that refers to the financial function, achievements (business results) of an organization and adjustments to the financial function of an institution that are beneficial to customers in making financial decisions. The research method used is a quantitative method. This research method uses literature research, which is a technique of collecting records of the use of notes and analyzing theories from various literature related to research. The improvement of Islamic banking through laws, guidelines for Indonesian financial institutions and the fatwa of the Indonesian Ulema Council with the existence of the Sharia-MUI Council is a concrete and tangible step as an effort to realize the dream of mankind for Islamic banking services and products in Indonesia in 2017. in accordance with modern trends. The decline in capital in Muamalat financial institutions shows that this financial group is starting to experience difficulties. Muamalat economic institutions need a capital boom to increase their capital ratio. With this additional capital, it will be able to help capital at Bank Muamalat Indonesia.

Response of Stock Market Capitalization Ratio to Fiscal Policy Variations in Nigeria

Response of Stock Market Capitalization Ratio to Fiscal Policy Variations in Nigeria