Commercial Banks In Lebanon Research Articles

The influence of knowledge management processes on FinTech innovation: Lebanon evidence

This study aims to examine the influence of knowledge management process on Fintech innovation through the moderating role of managers' demographic characteristics (age, sex, education, experience, and position) in commercial banks operating in Lebanon. To accomplish this aim, a conceptual framework based on knowledge-based theory and literature review was developed. The data for this research was collected through a self-administered questionnaire with 181 respondents. The target respondents were managers of commercial banks in Lebanon. The empirical findings of the study suggest that the practice of knowledge management functions practice has a positive and significant relationship with Fintech innovation. The findings also provide support for the moderating effect of only two demographic characteristics of bank managers: experience and position on the relationship between knowledge management and Fintech innovation in commercial banks in Lebanon. The study findings may aid future researchers in their quest to understand the inherent relationships that lie between the constructs' questions and provide a platform for banking managers in their efforts to improve their innovation strategies through knowledge management. Furthermore, research recommendations, limitations and future directions are discussed in the last sections.

The Impact of Basel III Capital Regulation on Credit Risk: A Hybrid Model

This research examined the impact of Basel III capital regulation (BCR) on credit risk (CR) using a sample of 25 commercial banks in Lebanon over the period 2012–2017. BCR is measured using the capital adequacy ratio (CAR) and the common equity tier one ratio (CET1 ratio), CR is measured using net provision for credit losses /total assets. To analyze the data, we constructed a hybrid model based on 3 statistical approaches. First, we modelled the dual impact of BCR and CR using probabilistic inference in the framework of Bayesian Belief Network formalism (BBN). Second, to highlight more about the correlation between BCR and CR, we used Spearman correlation test as a nonparametric approach. Third to study the simultaneous effect of CAR and CET1 ratio on CR we applied multivariate regression analysis. By analyzing the probabilistic inference for the first approach we concluded that there is an effect of BCR on CR especially for the high level of CET1 ratio, but when we investigated more if this effect is significant using the Spearman correlation test and the multivariate regression analysis, we concluded that there is no effect statistically significant of Basel III capital regulation (BCR) on credit risk (CR).

The impact of knowledge management practice on digital financial innovation: the role of bank managers

Purpose This paper aims to examine the impact of knowledge management functions (acquisition, integration and utilization) on digital financial innovation through the moderating role of managers’ demographic characteristics (age, sex, education, experience and position) in commercial banks operating in Lebanon. Design/methodology/approach To accomplish this aim, a conceptual framework based on knowledge-based theory and literature review was developed the data for this research was collected through a self-administered questionnaire with 181 respondents. The target respondents were managers of commercial banks in Lebanon. Findings The empirical findings of the study suggest that the practice of knowledge management functions practice has a positive and significant relationship with digital financial innovation. The findings also provide support for the moderating effect of only two demographic characteristics of bank managers; experience and position on the relationship between knowledge management and digital financial innovation in commercial banks in Lebanon. Practical implications The managers of commercial banks in Lebanon and similar countries could use the study findings to better understand the practices of knowledge management in the banks and also the skills acquired or existing in the individuals working in their organizations and is also helpful to enhance their level of digital financial innovations. Originality/value This study has investigated the unexplored impact of knowledge management on digital financial innovation via moderating role of managers' demographic characteristics among commercial banks operating in Lebanon as a developing country.

The Impact of Basel III Capital Regulation on Profitability: A Hybrid Model

This research examined the impact of Basel III capital regulation (BCR) on profitability (P) using a sample of 25 commercial banks in Lebanon over the period 2012–2017. BCR is measured using the capital adequacy ratio (CAR) and the common equity tier one ratio (CET1 ratio), P is measured using two ratios: ROAA and ROAE. To analyze the data, we constructed a hybrid model based on three statistical approaches. First, we modelled the dual impact of BCR and P using probabilistic inference in the framework of Bayesian Belief Network formalism (BBN). Second, to highlight more about the correlation between BCR and P, we used the Spearman correlation test as a nonparametric approach. Third, to study the simultaneous effect of the BCR ratio on Profitability we apply multivariate regression analysis. By analyzing the probabilistic inference for the first approach, we concluded that there is an effect from BCR on P. When we investigated more if this effect is significance using the Spearman correlation test and the multivariate regression analysis, we concluded that that the impact of BCR on P is only found between CAR and ROAA and this regression relationship is weak because only 24.3% of the changes in ROAA variance is explained by CAR.

King’s Model on Capitalization under Basel III: The Case of Lebanese Banks

Objective: Lebanese banks have shown immunity towards the 2008 financial crisis that was attributed to many factors including a strong regulatory and supervisory system of conservative practices and structural economic factors such as the recurrence and non-speculative nature of capital inflows towards Lebanon supported by a large pool of offshore savings from diaspora and investors around the globe. The purpose of this study is to investigate the relation between capital adequacy ratios (CARs) and lending spread ratio (LSR). This paper presents the first assessment of the Basel III capital requirements on lending spread ratio before, during and after the financial crisis among commercial banks operated in Lebanon.
 Methodology: We consider King’s approach and assess his model’s applicability in the Lebanese context. Findings indicate some deviations, specifically related to the practices and financial performance of commercial banks in Lebanon.
 Results: We found no indication of impact of the change in CAR on LSR among Lebanese commercial banks in years prior to the recent financial crises; Nevertheless, the impact of changing CAR by 1 pp on LSR has a modest effect on Lebanese commercial banks during the years of financial crises; this effect is lowered to become modest after the crisis.
 Implication: The results of the current study reveal significant implications for managers in commercial banks in particular and all banks in general. Given that Lebanese commercial banks are well-capitalized and their Capital Adequacy Ratios are above international benchmarks, bank managers must carefully monitor the cost of the implementation of Basel III requirements

Efficiency of commercial banks in Lebanon

The study evaluates the key performance indicators of the banking sector in post-war Lebanon, in an attempt to assess the efficiency of the sector in producing the conventional outputs. Using data from 1993 to 2002, we observe that the sector grew significantly in size as measured by assets, but the growth in assets was not accompanied by a similar growth in profits. Equity capital grew significantly over the period and the sector became safer. In fact, the prevalence of Lebanese treasury bills in the banks' asset portfolio indicates that commercial banks during this period did not play their traditional role of financing the private sector initiatives; instead, the bulk of their funds financed the public sector. The stochastic production and cost function estimates show that bank level inefficiency effects decreases with time and increases with number of branches, employees per branch, and ratio of staff to operating expenses.

Developing a model to restructure the overpopulated banking industry in Lebanon

The purpose of this research is to develop a multivariate statistical model to classify the commercial banks in Lebanon in cohesive categories on the basis of their financial characteristics revealed by the financial ratios. This article uses factor analysis as a data reduction technique to reduce 52 financial ratios into seven financial ratios that adequately explain differences in performance among 50 banks in Lebanon. Implication for mergers between commercial banks is based on cluster analysis that is used to divide Lebanese banks into four performance clusters. Multidiscriminant analysis is used to examine the relative importance of the financial ratios discriminating between these clusters.