Performance Of Commercial Banks Research Articles

Sharia Compliance and Profitability in Financial Performance Islamic Banks in Indonesia

This study sought to evaluate the financial performance of Islamic commercial banks in Indonesia from 2018 to 2022, with a specific focus on Sharia compliance and profitability. Secondary data taken from the annual reports of commercial Islamic banks during the specified period were used and a descriptive quantitative approach was adopted. The study population consisted of all 13 Islamic commercial banks registered with the Financial Services Authority in 2022; eight banks were chosen as the research sample. The analysis method used encompasses both Sharia compliance and profitability and is called the Sharia Compliance and Profitability Model. For further analysis, the research findings were divided into four quadrants. The results of the study showed how different Islamic commercial banks in Indonesia performed in terms of Sharia compliance and profitability. It identified banks that showed strong adherence to Sharia principles and high profitability, which could be used as benchmarks by other banks to improve their performance. In more detail, The findings of this research included 3 aspects, namely 1) Identification of Sharia Compliance, this study identified the parameters used to assess Sharia compliance, such as compliance with the principles regulated by the Indonesian Ulema Council (MUI) or equivalent Sharia regulatory institutions. The results of this research revealed banks that consistently complied with Sharia principles in their operations and products. This could include banks that had a financial structure that complied with Islamic law, avoids usury, and adhered to the principles of fairness in transactions. 2) Profitability Assessment. Financial analysis has been carried out to assess the profitability of the investigated banks. This could include profitability ratios such as ROA (Return on Assets) and ROE (Return on Equity), as well as the profit growth from year to year. 3) Factors that influenced the Performance as well as the analysis also included an exploration of factors that contributed to bank performance in terms of Sharia compliance and profitability. This could include internal factors such as risk management and operational efficiency, as well as external factors such as market conditions and regulations. The research has practical implications for commercial banks for enhancing performance and adhering to Islamic values in highly profitable banks that strictly adhere to Sharia principles. By examining the connection between Sharia compliance and profitability, this study added to the understanding of the financial performance of Indonesia's Islamic commercial banks.

Technology Infrastructure and Business Performance of Commercial Banks in Kenya

The general objective of the study was to examine the role of technology infrastructureon business performance of Commercial Banks in Kenya. The philosophy that guided the research is positivism philosophy. The study adopted correlational research design. The target population was commercial Banks in Kenya register by the Central Bank of Kenya. The population consisted of all 42 commercial banks in Kenya. Respondents’ population comprised of five top managers from each bank translating to 210 top managers. Slovin’s formula was used to calculate the sample size. Purposive sampling technique was used to select 138 top managers of the 42 commercial Banks in Kenya. This study used a self-administered, closed and open-ended questionnaire to obtain primary data. A pilot study was conducted to test the validity and reliability of the data collection instrument. Quantitative data was collected and analyzed in this study by calculating the response rate with descriptive statistics such as mean, standard deviation, median and proportions using the Statistical Package for Social Sciences (SPSS) version 24). Regression analysis and correlation analysis was used to carry out inferential data analysis to determine the direction and strength of the relationship between the independent and the dependent variables. In order to test the influence of information technology capability on business performance of Commercial Banks in Kenya, the study employed a hierarchical regression analysis with moderation. The study results were presented through use of tables and figures. The study concludes that technology infrastructure has a positive and significant effect on business performance of Commercial Banks in Kenya. The study revealed that hardware/Software, network and database influence business performance of Commercial Banks in Kenya. This implies that improvement in information technology infrastructure (hardware/Software, network and database) would lead to improvement in business performance of Commercial Banks in Kenya. The study recommends that the management of commercial banks in Kenya should ensure they had adequate and up to date hardware/Software to enable their employees improve their productivity.

Technology Processes and Business Performance of Commercial Banks in Kenya

The general objective of the study was to examine the role of Technology Processes on business performance of Commercial Banks in Kenya. The philosophy that guided the research is positivism philosophy. The study adopted correlational research design. The target population was commercial Banks in Kenya register by the Central Bank of Kenya. The population consisted of all 42 commercial banks in Kenya. Respondents’ population comprised of five top managers from each bank translating to 210 top managers. Slovin’s formula was used to calculate the sample size. Purposive sampling technique was used to select 138 top managers of the 42 commercial Banks in Kenya. This study used a self-administered, closed and open-ended questionnaire to obtain primary data. A pilot study was conducted to test the validity and reliability of the data collection instrument. Quantitative data was collected and analyzed in this study by calculating the response rate with descriptive statistics such as mean, standard deviation, median and proportions using the Statistical Package for Social Sciences (SPSS) version 24). Regression analysis and correlation analysis was used to carry out inferential data analysis to determine the direction and strength of the relationship between the independent and the dependent variables. In order to test the influence of information technology capability on business performance of Commercial Banks in Kenya, the study employed a hierarchical regression analysis with moderation. The study results were presented through use of tables and figures. The study concludes that technology processes has a positive and significant effect on business performance of Commercial Banks in Kenya. The study revealed that idea generation, technology acquisition and technology Implementation influence business performance of Commercial Banks in Kenya. This implies that improvement in information technology processes (idea generation, technology acquisition and technology Implementation) would lead to improvement in business performance of Commercial Banks in Kenya. Based on the findings, the study recommends that the management of commercial banks in Kenya should ensure they have in place an effective plan for idea generation, technology acquisition and technology Implementation.

Measuring Impact of CAMELS Model on Financial Performance of Indian Commercial Banks

The purpose of this study is to examine the effects of CAMELS components on the financial performance of Indian commercial banks. To fulfill the objectives of the study,secondary data were collectedfor the fiscal year 2016 to 2021 from four public sector and four private sector banks based on their market capitalization. To analyse the data two econometric models are constructed using return on assets (ROA) and return on equity (ROE) as proxies for commercial banks’ financial performance as dependent variables and six CAMELS’s key indicators (capital adequacy, asset quality, management efficiency, earning quality, liquidity, and sensitivity to market risk)as independent variables. To determine the extent to which the independent variables have an effect on the dependent variable, panel ordinal least square regression with their assumption has been used. The findings of the study revealed that the financial performance of Indian banking sector as evaluated by ROA and ROE is statistically and significantly affected by capital adequacy, liquidity and sensitivity to market risk, whereas asset quality, managerial efficiency and earning quality is found to have insignificant impact on the financial performance of Indian commercial banks. In order to perform better, it is suggested that the commercial banks should focus more on the variables that have a substantial impact on their financial performance. Keywords: Random effect, ROA, ROE, liquidity, sensitivity to market risk, CAMELS.

The Effect of Electronic Banking Tools on Operational Performance of Commercial Banks in Rwanda. A Case of Bank of Kigali (2017-2021)

The Effect of Electronic Banking Tools on Operational Performance of Commercial Banks in Rwanda. A Case of Bank of Kigali (2017-2021)

The Influence of Credit Risk Using Derivative Financial Instruments on the Performance Commercial banks

The research aims to reveal the influence of credit risks using Derivative Financial Instruments (DFIs) on the financial performance of commercial banks in Iraq. To achieve the research aim and test its main hypothesis, a questionnaire is distributed to listed commercial banks in the Iraq Stock Exchange and that apply DFIs. The researcher used the questionnaire as the main tool in collecting data. Financial data of the variables of the study are analysed by a simple regression method, the arithmetic mean(AM) and standard deviation. The study used the statistical program (SPSS ) to analyse the data. The research sample consisted of (70) questionnaire forms that were distributed and (68) valid forms were recovered. Research results show that using DFIs reduces exposure to interest rate risks, exchange rates and price fluctuations. The financial crisis is the result of the excessive use of financial derivatives outside regulatory restrictions and securitization to collect liquidity. Financial derivatives represent the fastest-growing form of financial transactions and continue to grow even in crisis conditions. DFIs help to identify risks associated with economic losses incurred by the economic unit as a result of weaknesses in the management and operation of derivatives contracts. Accounting profit-based performance indicators, such as return on assets, return on property rights, earnings per share and cash flows per share, contribute to the evaluation of performance, as well as the use of DFIs contribute to increasing profits. The study shows that credit risks using DFIs have a significant positive influence on performances financial in commercial banks in Iraq. Paper type: Research paper.

Internal audit as a moderator of the relationship between accounting information systems and performance in Jordanian commercial banks

This study aimed to find out the influence of Accounting Information Systems on the performance of Jordanian commercial banks, and the degree to which internal audit moderates this relationship. This was a current quantitative study designed to be at a descending trend of the survey conducted primarily on 12 major Jordanian banks’ accounting departments using descriptive and cross-sectional designs. From a total distribution of 358 questionnaires, 249 were returned, and after screening only 243 were deemed valid. Partial Least Square Structural Equation Modeling (PLS-SEM) was used as a statistical tool for data analysis, which is appropriate when exploring convoluted relationships and testing hypotheses. The findings indicate that there is a clear positive relationship between the implementation of AIS systems and improvement in the performance metrics at Jordanian banks; thus, hypothesis 1 is corroborated at a significant level of p < 0.01. More significantly, the findings suggest that internal audit highly strengthens the positive effect of AIS on bank performance, thereby supporting hypothesis 2 at the same significance level. This dual realization reiterates the needed adoption of advanced AIS by Jordanian banks and a general improvement to the internal auditors of the mechanisms that ensure they maximize on the benefits accruing in performance. More fundamentally, the findings underscore the dire urgency to incorporate efficacious AIS alongside with robust internal audit mechanisms in banking strategies, thereby providing crucial implications for bank managers and sectoral policymakers.

Islamic Bank Performance Assessment Using SATF Value

This study aims to evaluate the performance of Islamic banks based on the shidiq, amanah, tabligh, and fathona (SATF value) approach. The type of research is descriptive quantitative using secondary data. The research population is all Islamic Commercial Banks (ICB) operating in Indonesia for 2018-2022. The sampling technique uses saturated samples. The data combines ICB annual financial reports issued by the Financial Services Authority (FSA) and literature studies. The data analysis technique uses simple additive weighting (SAW). The research results show that Shidiq's performance shows high public confidence in Islamic bank savings products. Amanah's performance shows that the distribution of financing and carrying out responsibilities to bring benefits still need to be higher. Tabligh's performance shows that the level of Islamic compliance carried out by banking operations is Islamic. Fathona's performance shows that Islamic banking still needs to be optimal in increasing human resources (HR) capability or quality. Overall, the results of evaluating the performance of Islamic banking in Indonesia using the SATF value model during 2018-2022 are entirely satisfactory, with the SATF performance value increasing from year to year. The results of this research can be a reference for future research and provide valuable guidance for maintaining and improving Islamic banking performance while actively correcting any identified weaknesses or deficiencies.

Post-Merger Commercial Bank Performance Trends: A Case of Kenya

Commercial banks face performance challenges since most of them react to these challenges in a fairly standardized manner. This is because most of the commercial banks offer similar products and services. In so doing, they face high competitions and as a result, they engage activities in pursuit of a competitive edge in order to keep their current customers and attract new ones. Some of the strategic activities these companies have engaged in the recent past have been Mergers and acquisitions (M&A). M&A have become an effective strategic tool to consolidate the Banks and Financial Institutions (BFIs) in Kenya to increase their capital base, expand their business, and bring financial stability. However, despite venturing into mergers and acquisitions, evidence from elsewhere indicates that financial performance stability and improvement still remains a challenge forming a good basis for further empirical investigation. This paper provides an assessment of the post-merger commercial bank performance in Kenya over the period 2008 to 2019 using return on equity as a proxy for bank performance. The target population for this study comprised all 13 commercial banks operating in Kenya between the year 2008 and the year 2019. The study used purposive sampling to select thirteen (13) commercial banks that had undergone mergers and acquisitions in Kenya over eleven years (from 2008 to the year 2019). The study finds that the post-merger effect of mergers and acquisitions on financial performance is mixed. Some commercial banks reported improved ROEs while a few reported declining ROEs during the study period. To enhance performance, the study recommended that commercial banks should prioritize M&A opportunities that align with their long-term strategic goals. This might include expanding into new geographic regions, entering new markets, diversifying product offerings, or gaining access to new technologies. Banks should assess the potential risks associated with the M&A transaction, including credit risk, operational risk, and reputational risk. Develop strategies for mitigating these risks and ensuring a smooth transition. Keyword: Mergers, Strategy, Acquisitions, Performance, Return on Equity, Synergies, profitability.

Corporate Social Responsibility and Financial Performance of Commercial Banks in Rwanda: A Case of BPR Bank Rwanda Plc

Corporate Social Responsibility (CSR) denotes firms’ commitment to conduct their activities ethically by considering their social, economic and environment effects. CSR can be vital for commercial banks in Rwanda in creating lasting corporate image that serve to benefit their financial performance. The present research examined the contribution of CSR on financial performance of commercial banks in Rwanda using a case of BPR Bank Rwanda Plc, located in Nyarugenge District, Rwanda. A descriptive and correlational research design was adopted using both quantitative and qualitative approaches. The target population of this research was 125 employees from the bank and sample size of 96 selected using stratified random sampling technique. Data collection was done using questionnaire and interview guide. Secondary data was obtained using desk research from financial statements published by the bank. Pearson correlation and multilinear regression analyses were performed to measure the effect. The findings on employee trainings (r=0.233, p=0.022) was significantly and positively related to financial performance of commercial banks. Since the p-value was less than 5%, then the correlation was statistically significant. Similarly, charity work (r=0.283, p=0.005) and community development projects (r=0.475, p=0.000) positively influence the financial performance of BPR, since the p-value were less than 5%. All the indicator variables of CSR were seen to have positive effect on financial performance of commercial banks though with low correlation.  The regression model (F=23.917, p=0.000) was statistically significant since the p-value was less than 5%. The researcher recommends that bank managers should analyze the viability of the current CSR strategies before launching new strategies. It is only after critical analysis that managers can use new CSR strategies. They should also make sure that any new CSR strategies are aligned to the overall mission and vison of the bank.

The Financial Performance of Commercial Banks and Their Financial Management Practices: A Case Study

The research used IDBI Bank's Hazratganj Branch in Lucknow as a case study to look at how financial management methods affect the bottom line of commercial banks in the city. Its direction came from three main points: i) to investigate the impact of risk management on IDBI Bank, Riyadh's financial performance ii) research the effects of working capital management on the financial performance of IDBI Bank's Hazratganj Branch; and iii) evaluate the effects of assets management on the same branch's financial performance. Integrating qualitative and quantitative methods, the study followed a phenomenological trend. So far, sixty-two people have participated in the research. Analysis of the data showed that the following management functions had the highest Adjusted R Square values: risk (66.4%), working capital (51.9%), and assets (82.5%). Finally, the financial performance was much improved because to the crucial role that risk management played. Evidence from this study supports the idea that risk management is an essential management function for sound financial results. Furthermore, it was shown that the commercial bank's financial performance was significantly improved by better asset management. Management should handle creditors and cash inventories well, according to the report, so that institutions may fund their activities without financial constraints. They also said that as commercial banks deal with liquid currency, it makes sense for them to improve their liquidity by maintaining good relationships with their shareholder

Effect of Capital Structure on the Financial Performance of Ethiopian Commercial Banks

This study aimed to examine the effects of capital structure on the financial performance of Ethiopian commercial banks. The dependent variable, financial performance, is measured by Return on Assets (ROA), while factors such as loan-to-deposit ratio (LDR), asset-to-total equity ratio (ATER), total deposit-to-total asset ratio (TDTAR), capital adequacy ratio (CAD), and asset growth ratio (GA) were used as proxy independent variables to gauge capital structure. Using a quantitative approach and an explanatory research design, this study analyzes 6 years of audited financial reports from 14 commercial banks in Ethiopia. This investigation employs a random effect regression model and Stata 14 software package to explore the relationships among these variables. The result revealed that both the loan-to-deposit ratio and the total deposit-to-total asset ratio have a positive and significant impact on financial performance, while the asset growth ratio showed a negative effect. Based on these findings, this study recommends that bank authorities concentrate on bolstering their deposit base, managing asset growth efficiently, maintaining adequate capital levels, and optimizing leverage levels to improve financial performance and ensure long-term sustainability in the banking sector. Additionally, this research is anticipated to inform policymakers about regulatory frameworks for banks and assist banking managers in formulating effective capital financing strategies within the Ethiopian commercial banking sector, thus enriching the existing literature on the relationship between capital structure and financial performance.

Corporate Social Responsibility and Financial Performance of First Bank Limited in Nigeria

The study focused on the nexus between corporate social responsibility and financial performance of First Bank Limited in Nigeria. The financial performance of commercial banks in Nigeria pertains to the detailed analysis and disclosure of specific factors influencing the after tax profit, the effectiveness of credit risk management practices, and the impact of macroeconomic variables on asset quality, which are crucial for assessing the overall health and stability of the banking sector. The specific objectives were to: ascertain the effect of social expenditure on profit after tax; and determine the effect of environmental expenditure on profit after tax of First Bank Limited. Ex-post facto “design was adopted for this study. Ex-post facto design was used since the researcher relied on historic or secondary accounting data obtained from published annual financial statements of the bank for a period of ten years covering 2013 to 2022. The finding of the study indicates that: there is a positive and significant effect of social expenditure on profit after tax; and there is a positive and significant effect of environmental expenditure on profit after tax of First Bank Limited. The study concluded that there is significant effect of corporate social responsibility and financial performance of First Bank. It was recommended that the bank continues to prioritize and potentially increase investments in social initiatives, ensuring alignment with its corporate objectives, and also expand its environmental sustainability initiatives, leveraging opportunities to invest in eco-friendly technologies and green infrastructure.

Branchless Banking and Financial Performance of Commercial Banks in Kenya

Commercial banks remain the principal constituents within the financial sector. Their performance is important since it serves other sectors, for example fishing, agriculture, manufacturing, energy and petroleum, mining, hospitality as well as tourism within the economy. Commercial banks’ performance shows a direct effect towards the overall economy and hence there is need for stability in their performance. The current study targets to evaluate how branchless banking impacts financial health of banks. The study aims to establish how banking via mobile phones affects Kenyan banks' performance, how ATM banking affects Kenyan banks' performance financially, how financial deepening affects Kenyan banks' performance financially due to branchless banking, and how regulations affect Kenyan banks' performance financially due to branchless banking. The study was in accordance with agency theory, financial deepening theory, and innovation diffusion theory. The study employed a correlation design and collected secondary data on commercial banks from 2012 to 2020. Causal research design was utilized, and all 39 commercial banks were included in the study. Regression analysis for data spanning eight years (2012-2020) was used. The study findings indicated that branchless banking has a significant impact on the financial performance of commercial banks in Kenya, with financial deepening playing a significant mediating role. Furthermore, bank regulations had a significant moderating effect on the relationship between branchless banking and commercial bank financial performance. The study recommends that commercial banks adopt branchless banking through mobile and ATM banking, increase customer usage of mobile banking, expand ATM banking services, and enhance financial deepening.

Impact of strategic planning on the performance of commercial banks: the case of public commercial banks in Eastern Hararghe, Ethiopia

Impact of strategic planning on the performance of commercial banks: the case of public commercial banks in Eastern Hararghe, Ethiopia

Effects of Non-Performing Loans & COVID-19 Pandemic on the Performance of Commercial Banks in Sri Lanka

The COVID-19 pandemic has significantly impacted the global economy, and the non-performing loans (NPLs) have become a pressing issue for commercial banks in Sri Lanka. It is doubtful how the NPLs and COVID-19 Pandemic have affected the performance of commercial banks in Sri Lanka. Thus, the purpose of this study is to investigate effects of non-performing loans & COVID-19 pandemic on the performance of Sri Lankan commercial banks for the period of 2011 - 2021. The panel data regression analysis was used to investigate the effects of non-performing loans & COVID-19 pandemic on the financial performance of Commercial Banks. The results of the analysis revealed that non-performing loans and the pandemic period have a negative impact on the profitability of commercial banks in Sri Lanka. Thus, this study is useful for bank management officials to protect banks from crises and create ideas to enhance the performance of banks.

Transformative Waves: Impact of Information Technology on Operations of Commercial Banks in India

This research abstract provides a glimpse into a study focused on investigating the profound impact of Information Technology (IT) on the operations of commercial banks in India. Employing a mixed-methods approach, incorporating qualitative insights and quantitative analyses, this study aims to explore the multifaceted dimensions of IT integration, its challenges, and the resultant transformation in the operational landscape of Indian commercial banks. The qualitative aspect of the study involves interviews, case studies, and expert opinions to capture nuanced perspectives on how IT adoption has reshaped banking operations in India. Simultaneously, quantitative data will be analyzed to identify trends, correlations, and statistical patterns associated with the impact of IT on key operational metrics. Various dimensions of the impact of IT on banking operations will be investigated, including enhanced efficiency through automation, the evolution of digital banking channels, cybersecurity challenges, and the overall influence on customer experience. The study aims to provide insights into the strategic implications of IT integration for commercial banks in India.
 The findings from this research are anticipated to offer valuable insights for banking professionals, IT experts, policymakers, and decision-makers. By understanding the multifaceted impact of IT on operations, stakeholders can formulate strategies to harness technological advancements, address challenges, and contribute to the ongoing digital transformation of the banking sector in India. This study serves as a foundation for informed decision-making and future research within the realm of its impact on the operations of commercial banks.

Accounting Information System as the Predictor of the Performance of Private Commercial Banks in Bangladesh

Accounting Information System as the Predictor of the Performance of Private Commercial Banks in Bangladesh

Corporate Communication and Organizational Performance: A Study in Commercial Banks in Kenya

The research delves into the influence of corporate communication on the organizational performance of commercial banks in Kenya, prompted by the sector's persistent decline despite its substantial number of licensed institutions, with only a handful dominating the market. The predominant focus on financial metrics has overshadowed the concerns of vital stakeholders such as employees, customers, communities, and regulators. Using a descriptive cross-sectional approach, data were gathered from 394 respondents across 39 banks via a questionnaire, which was then analyzed using SPSS. The findings reveal a significant correlation between corporate communication and banks' performance, suggesting that ineffective communication during corporate changes significantly contributes to performance decline. The study proposes the integration of corporate communication into corporate change strategies, a priority set by senior management, to drive comprehensive organizational performance and address stakeholders' needs, thereby fostering sustainable growth and expansion opportunities for banks.

ORGANIZATION OF CASH WORK IN COMMERCIAL BANKS IN UZBEKISTAN, IMPROVEMENT OF AUDIT OF COLLECTION OF CASH AND OTHER VALUES AND DEVELOPMENT OF THE FINANCIAL SYSTEM

“Banks take into account the optimization of their liquidity risk, external factors associated with their overall choice, as well as the risk of the financial system. The banking sector in Kenya has had problems with liquidity and from financing to market risks. The purpose of the study is to assess the impact of monetary reserves as well as the performance of commercial banks in Kenya. The study showed that cash reserves have a strong negative impact, and the interaction with the profitability of capital gives a significant negative relationship with the performance of capital. The study recommended that banks minimize cash reserves and invest instead, effective investments are those money, diversification as their sources, and diversification of investments are those funds”.