Commercial Banks Research Articles

Financial Literacy and Mobile Banking Usage: The Moderating Role of Demographic Characteristics

This study aimed to analyze the relationship between financial literacy and mobile banking ‎usage, considering the moderating role of demographic characteristics among commercial ‎bank clients in the Jordanian southern provinces of Jordan. Using a sample of 1,380 commercial bank clients from ‎Jordan's southern region. To achieve the study's objective and test its hypotheses, the authors employed the quantitative method and utilized SPSS software version 28 for data analysis. The results revealed a strong positive relationship between ‎the level of financial literacy and mobile banking usage, with a moderating role of ‎demographic characteristics on the relationship between the level of financial literacy and ‎mobile banking usage. The study found that male clients and individuals with higher income levels were more inclined to utilize mobile banking services compared to female clients and those with lower income levels. On the other hand, age and educational level did not show a ‎moderating effect on this relationship. Based on the findings, the study recommends enhancing financial literacy through the development of programs and diverse digital banking products to meet client's needs, thereby promoting the adoption of mobile banking services. ‎

Creditworthiness Criteria According to the 5Cs Model and Credit Decision: The Moderating Role of Intellectual Capital

The current study aims to examine how creditworthiness criteria based on the (5Cs) model with its dimensions (character, capacity, capital, conditions, and collateral) on the credit decision in the presence of intellectual capital as a moderating variable applied to the branches of Jordanian commercial banks in the southern governorates of Jordan. The study included 449 populations from these branches, with a sample size of 205 employees. The authors employed a quantitative approach and utilized Macro PROCESS v4.2 by Andrew F. Hayes for analysis within SPSS v.28 software to achieve the study objective and test its hypotheses. According to the findings of the study, there is a positive effect of creditworthiness criteria based on the (5Cs) model on the credit decision. Furthermore, the study discovered that there is a presence of a moderating role of intellectual capital on the relationship between creditworthiness criteria based on the (5Cs) model and the credit decision. The study recommends that banks should prioritize investing in training programs for employees to improve their ability to assess credit risk accurately.

Interest rate risk in banking book management at commercial banks in Vietnam

Interest rate risk is potentially averse to a commercial bank's trading book and banking book. The sharp and rapid volatility of interest rates can push commercial banks to fall into difficult situations, thus leading to instability of the whole banking system. Therefore, interest rate risk in banking book (IRRBB) management plays a vital role in banking operations. This paper analyzes the current management of IRRBB at 21 commercial banks in Vietnam by doing in-depth interviews and questionnaires. The finding indicates that the level of IRRBB management of commercial banks in Vietnam is mostly relatively completed or inadequate, with the highest levels belonging to international commercial banks and the banks that implement Basel II. Furthermore, the study also executes a simulation of IRRBB management at one commercial bank according to current regulations of the State Bank of Vietnam. Based on the selected interest rate scenarios, the capital requirement for IRRBB is calculated, which is the actual simulation for commercial banking in implementing the IRRBBB framework. Finally, to improve the effectiveness of IRRBB management in Vietnam, some implications for the State Bank of Vietnam and commercial banks are provided.

IMPORTANCE OF INTERNAL CONTROL SYSTEMS ON DETECTION AND PREVENTION OF FRAUD IN COMMERCIAL BANKS OF NEPAL

This research aims to study the importance of internal control systems to detection and prevention of fraud in commercial banks in Nepal. Advanced authentication techniques, vigilant monitoring for questionable activity, frequent staff education and awareness campaigns, and robust encryption for confidential information are all part of the process of identifying and preventing fraud. Effective internal control mechanisms are essential to the identification and aberrance of fraud in financial organizations. This study used descriptive research design to interpret the data. Using simple random sampling Ten commercial banks were selected as sample out of total Twenty commercial banks. Three level staff officer, manager, and executive were chosen on the study. Structured questionnaire was distributed to Fifty respondents but only 48 were collected and used in the study. Chi square test was applied to analyze the data. Findings of this study found that fraud in the organization is done by concealed hand and inefficient allocation of duties and authorities can not detect and prevent the fraud in commercial banks in Nepal. To detect and prevent the fraud the commercial banks need to apply effective internal control systems, allocate the duties and authorities in systematic way.

An Empirical Investigation on the Determinants of Interest Rate Spread of Commercial Banks in Bangladesh

This paper aims to investigate the determinants or factors affecting the interest rate spread of private commercial banks in Bangladesh from 2013 to 2022. For the purpose of the study, the interest rate spread (IRS) of banks has been considered as a dependent variable while bank-specific factors and macroeconomic factors have been considered independent variables. Bank-specific factors are credit risk, bank size, operating cost ratio, liquidity risk, net interest income as a ratio of total income, capital adequacy ratio, and loan to deposit ratio while macroeconomic factors are Inflation and GDP. The Pooled Ordinary Least Square method (OLS), the Fixed Effect method (FE), the Random Effect method (RE), and the Generalized Least Square method (GLS) have been used to investigate the impact of the factors on interest rate spread. The results exhibit that bank-specific factors such as net interest income as a ratio of total income, and capital adequacy ratio are found to be statistically significant and positively impact the interest rate spread. In contrast, the results also exhibit that bank-specific factors such as bank size, operating expense ratio, and loan to deposit ratio are statistically significant and negatively impact the interest rate spread. Again, the results determine that the macroeconomic factor which is inflation found to be statistically significant and positively impacts the interest rate spread. The study’s findings will assist the banks’ regulatory body in formulating and developing strategies to maintain a satisfactory level of interest rate spread.

The Too-Big-to-Fail Premium in Tier-2 Capital Bonds and Additional Tier-1 Capital Bonds Primary Markets: Evidence from China

Abstract This study examines the too-big-to-fail expectations in the primary market issuance spreads of commercial bank tier-2 capital bonds and additional tier-1 capital bonds in China. Using a sample of 574 issuances with total amount of 4.76 trillion RMB (749 billion USD), we conduct median regressions with the issuance spreads as the dependent variable. The coefficients of DSIB and GSIB are negative and statistically significant at 1% and 5% levels respectively in the full sample, and are negative and statistically significant at 1% level in the subsample after the guidance on asset management businesses was announced. Ceteris paribus, the issuance spreads of capital bonds of systemically important banks are 15.2 bps to 19.7 bps lower than those issued by other banks. The too-big-to-fail expectations and implicit guarantee of systemically important banks in the Chinese bond market, which narrow the primary market spreads of capital bonds issued by systemically important banks, may account for the results. To address the potential endogeneity issues, we use 90% quantile and 95% quantile of sample bank consolidated assets as proxies of systemic importance, and use China Development Bank bond yields to calculate issuance spreads, and the results show that the conclusion is robust.

Pengaruh Return On Equity (ROE) dan Gross Profit Margin (GPM) Terhadap Pertumbuhan Laba Pada Bank Umum Syariah

This research aims to determine the influence of two X variables, namely Return On Equity (X1) and Gross Profit Margin (X2) on Profit Growth (Y) on the Indonesian Stock Exchange with 30 samples from 6 Sharia Commercial Banks. This research uses a type of research using panel data. This research is a causal type of research with a quantitative approach. The data analysis method used is multiple linear regression with SPSS 26 software. The t-test results of the Return On Equity (X1) variable show t-test > ttable, namely 4.906 > 2.050 with a sig value of 0.000 < 0.05, it can be concluded that Ha1 is accepted and Ha0 is rejected. From the results of the t-test for the Gross Profit Margin (X2) variable, it shows tcount > ttable, namely 0.254 < 2.050 with a sig value of 0.801 > 0.05, it can be concluded that Ha2 is rejected and Ha0 is accepted. The test results obtained at Sharia Commercial Banks show that there is a significant influence of the independent variables simultaneously on the dependent variable, so Ha3 is accepted, namely that there is a positive and significant influence of the Return On Equity and Gross Profit Margin variables on Profit Growth.

Tax Aggressiveness and Earnings Management: Evidence from Listed Commercial Banks in Nigeria

This study examined the extents to which tax aggressiveness affects earnings management of listed commercial banks in Nigeria. Ex-post facto research design and panel data was obtained for twelve (12) listed commercial banks from 2014-2023. Tax aggressiveness was measured using cash effective rate while two earnings management models were employed namely, Chang and Jones models. Data collected were analyzed through descriptive, post-estimation and inferential statistical techniques. The fixed and random effects regression models showed that tax aggressiveness significantly affects earnings management models. In view of the findings, it recommends the needs for management of listed commercial banks to dampen earnings management practices since it is negatively influenced by the level of tax aggressiveness. Furthermore, management of publicly listed commercial banks needs to engage in aggressive tax planning to enhance their performance; however such level of tax aggressive planning should be kept minimal as possible to further discourage tax fraud and evasion.

Interest Rate Risk Modelling Using Semi-Heavy Tail Distributions of Normal Variance-Mean Mixtures: A Study on Central Bank of Kenya Interest Rates

Derivative prices such as options and bond prices as well as swaps depend on the distributional assumptions of the underlying economic variables, normally, interest rates. The risk associated with changes in interest rates may worsen the value of the contract that depend on it since the values of these assets (derivative contracts) are affected directly by the fluctuations in interest rates. The distribution of interest rates, therefore, needs to be well understood to reduce the risks of losses associated with it. The Binomial Option pricing model assumes that interest rates are constant throughout the life of the option. Another common assumption of the underlying economic variables is that their returns are normally distributed with constant volatility. These assumptions have been used in pricing derivatives and currencies and has led to over-pricing and in some cases under-pricing. The models of the Normal Variance-Mean Mixtures used in this research shows better performance than the normal distribution. Weekly 91-day and commercial bank interest rates are used from 1991 to 2021. This study will provide a better model for interest rates to avoid mispricing. We find that the 91-day Treasury Bills interest rates follow a Generalized Hyperbolic distribution while the Commercial Bank interest rates follows a Normal Inverse Gaussian distribution. G.A.R.C.H model is then used in forecasting under each of the above findings. A 99pc Value at Risk is then computed for the two models and calculates the minimum expected returns in the subsequent months. This research forms a foundation for the development of advanced pricing models that incorporates the fluctuations of interest rate in the pricing industry. We conclude that the Normal Inverse Gaussian and Generalized hyperbolic distributions provide better fits than the assumed normal distribution.

Indicators for assessing the effectiveness of a commercial bank product

Indicators for assessing the effectiveness of a commercial bank product

The Impact of Asset-Liability Management on the Profitability of Listed Commercial Banks in Vietnam

This paper investigates the effect of asset-liability management on the profitability of listed commercial banks in Vietnam, analyzing annual data from 2013 to 2023. The study uses VIF tests, Heteroskedasticity tests, Model Specification tests, and the Generalized Least Squares (GLS) model with the Modified Wald test to examine the data. The results reveal a positive correlation between bank asset management and annual GDP growth with profitability. Conversely, liability management and the year-on-year growth rate of total assets negatively impact profitability. Specifically, factors such as loans and advances, investments in securities on the asset side, and deposits and borrowings from other credit institutions, along with customer deposits on the liability side, are significant. Lending activities, in particular, are identified as key drivers of financial performance in the Vietnamese banking sector. However, the minimal impact of investment securities on profitability raises questions, given their traditionally significant role in banking profitability strategies globally. The study also highlights the negative effects of certain liabilities on bank profitability, stressing the need for careful liability management for banks in Vietnam. While GDP growth is generally linked with economic prosperity and financial sector growth, its impact on bank profitability in Vietnam appears limited, suggesting that other factors might play a more significant role.

Beyond financials: Examining the impact of customer focus, internal processes, and learning & growth on the sustainable performance of commercial banks—Moderating role of management commitment

AbstractThis study examines the key factors influencing sustainable performance in commercial banks, focusing on the impact of non‐financial metrics—customer focus, internal processes, and learning and growth—within the Balanced Scorecard framework on the performance of commercial banks in Ethiopia. Additionally, it examines the moderating role of management commitment in this relationship, grounded in organizational learning theory, upper echelons theory, and the balanced scorecard model. The study adopts an explanatory research design, utilizing covariance‐based structural equation modeling and interaction‐term analysis. A multi‐stage sampling technique, followed by systematic random sampling, was employed, with Soper's formula used to determine a sample size of 480 from a total population of 4990. Mahalanobis distance was applied to identify and remove biased responses. The findings reveal that non‐financial metrics—customer focus, internal processes, and learning and growth—positively affect commercial banks' sustainable performance, and management commitment strengthens this effect. Furthermore, the results empirically validate the proposed hypotheses, emphasizing the value of incorporating non‐financial metrics into performance measurement and highlighting the essential role of management commitment in ensuring their success. This research fills a gap in the literature on sustainable performance measurement within the Ethiopian banking sector and provides actionable insights for managers and policymakers.

The Impact of Blockchain Technology on the Future of Commercial Banking

This study investigates the ramifications of blockchain technology on the future landscape of commercial banks in the Kurdistan Region of Iraq, drawing insights from expert perspectives. The evolution of blockchain has significantly reshaped all facets of banking services and operations, resulting in a paradigm shift away from the traditional banking modus operandi in terms of systems, external events, and human intervention. Employing the Analytical Hierarchy Process (AHP) methodology and utilizing SPSS software (Version 26), the study analyzed data collected through questionnaires distributed among banks and universities in the Kurdistan Region of Iraq, totaling 90 responses. The findings reveal a notable, statistically significant inverse correlation between blockchain adoption and the future trajectory of commercial banks in the Kurdistan Region. Increased integration of blockchain technology enhances the resilience and viability of commercial banks, thereby reducing the likelihood of adverse impacts. Moreover, blockchain technology demonstrates tangible and positive prospects for the future of commercial banking, facilitating enhanced operational efficiency and cost reduction through streamlined processes and accelerated transactions, one of the key recommendations derived from the research is the necessity for banks to adopt blockchain technology. This technology contributes to reducing the costs of banking services provided in the Kurdistan region and enhances operational efficiency by minimizing intermediaries and expediting transfer and settlement processes.

An in-depth analysis of financial metrics and their interrelations in shaping the performance of commercial banks in Cambodia

This study aims to systematically identify and analyze key financial metrics that influence the performance of commercial banks in Cambodia. Utilizing 2023 data from the National Bank of Cambodia across 59 banks, the research adopts an explanatory framework based on cross- sectional data analysis. The findings reveal that Loan Growth (LG) exhibits no statistical significance in relation to Return on Equity (ROE), suggesting that increases in lending do not necessarily enhance bank profitability in the Cambodian context. Conversely, Non-Performing Loans (NPL) demonstrate a marginally significant positive relationship with ROE, indicating that effective management of these loans can still yield profitability. Additionally, the Loan to Deposit Ratio (LDR) shows a significant negative impact on ROE, suggesting that higher liquidity risks associated with elevated LDR levels may hinder profitability. The study further confirms that Market Share (MS), Loan Loss Provision (LLP), Cost to Income Ratio (CIR), Effective Tax Rate (ETR), and Net Interest Margin (NIM) significantly influence ROE. These results underscore the importance of effective risk management, operational efficiency, and strategic financial planning in enhancing bank profitability. Recommendations for Cambodian commercial banks include improving risk management practices, focusing on loan portfolio quality, optimizing LDR, implementing cost efficiency measures, and enhancing tax management strategies.

Efficiency Of Sharia Commercial Banks In Indonesia (Two-Stage Analysis)

This research is motivated by the importance of efficiency in the banking industry, especially in the Islamic banking sector which has a vital role in the Indonesian economy. This study aims to analyze the efficiency of Islamic commercial banks in Indonesia using a two-stage analysis approach. The method used is divided into 2 stages, the first stage is to measure efficiency using the Data Envelopment Analysis (DEA) method to assess the operational performance of banks. The second stage is to analyze the factors that influence efficiency through panel regression. The results of the study indicate that although there are variations in the level of efficiency between banks, factors such as bank size, capitalization, and information technology have a significant influence on efficiency. These findings are expected to provide insight for stakeholders in improving the performance of Islamic banks in Indonesia

Electrochemical Sacrificial Alchemy: Crafting Hollow Hydroxide Hierarchy for Practical Aqueous Energy Storage Solution

AbstractEffective utilization of internal active sites in high‐mass loading electrode materials is essential for advancing practical energy storage. Herein, a novel electrochemical sacrificial alchemy for the first time to directly transform the solid Co‐Ni‐Zn carbonate hydroxide (CH) into its hollow structure with a strategic hierarchical architecture is introduced. In contrast to the complex and often cumbersome procedures of traditional methods, the approach is built on the simple electrochemically induced in situ etching and remodeling process. The experimental and theoretical analyses highlight the significant role of electric field force‐induced Zn sacrificial etching and hydroxide redeposition in creating internal cavities and regenerating external active sites, leading to the final hollow hierarchical structure with primary 1D hollow nanorod arrays and secondary reconstructed 2D nanoflakes, effectively exposing abundant energy storage sites. Benefiting from the synergistic effect, the resulting Co‐Ni‐Zn CH exhibited exceptional electrochemical performance. As proof of concept, a modular pouch‐type hybrid supercapacitor (HSC) composed of Co‐Ni‐Zn CH cathode achieved an ultrahigh energy density of 46.9 Wh kg−1. This device can efficiently power consumer electronics with a faster charging speed compared to commercial shared power banks. This research unveils a facile electrochemical approach for structuring electrode materials in energy storage solutions.

Effect of Strategic Planning on Financial Performance of Commercial Banks in Rwanda A Case of BPR Bank Rwanda PLC Headquarters

Effect of Strategic Planning on Financial Performance of Commercial Banks in Rwanda A Case of BPR Bank Rwanda PLC Headquarters

Central Bank Digital Currencies: Experimental Evidence of Deposit Conversion

Abstract In this paper, we provide unique experimental evidence of depositors’ behaviour in presence of a possibility to convert commercial bank deposits into central bank digital currency (CBDC). Theoretically and experimentally we analyse whether such an option incentivises bank runs. We find that the availability of the deposit conversion option does not lead to a significant outflow of deposits. However, when conversion is restricted, depositors are eager to actively use it as a coordination tool. These findings highlight the importance of considering coordination and decision time in determining the choice to convert deposits into CBDC. Our study evidences that policy-makers should balance accessibility and control measures to maintain financial stability, ensuring that CBDC implementation supports the resilience of the banking system.

The Influence of the Number of Banks, Distribution of Funds, and Sources of Funds on the Performance of Commercial Banks in Indonesia

This research aims to determine the impact of the number of banks, distribution of funds, and sources of funds on the general performance of banks in Indonesia. The location of this research is Indonesia. The object of this research is to collect data on the number of banks, distribution of funds, sources of funds, and performance of commercial banks in Indonesia, taken from the Central Statistics Agency website during 2018–2022. The data analysis method used is the multiple linear regression test using the classical assumption test, regression testing, and hypothesis testing. Based on the research results, it can be explained: 1) Partially, the number of banks does not influence but is significant on bank performance (-3.333 < 2.110; 0.004 < 0.05), the distribution of funds does not influence and is not substantial on bank performance (-1.992 < 2.110; 0.5063 > 0.05), and the source of funds influences and is significant on bank performance (3,440 > 2,110; 0.003 < 0.05); 2) Simultaneous positive and significant influence of the number of banks, distribution of funds, and sources of funds on performance (17.113 > 2.96; 0.000 < 0.05; 3) The bank performance variable has no relationship with the variable number of banks, distribution of funds with the figures shown being -0.753, -0.482 and has a relationship to the source of funds of 0.501

Linkage of Money Growth on Inflation and Economic Growth - Evidence from Indonesia

AbstractThis study is about money growth, and its linkage on inflation and economic growth. It was found that money growth in the previous period affected by 0.1539 on changing of economic growth, inflation affected by -0.2637 on economic growth, and money growth affected changing of inflation by 1.0468. Money growth is a source of economic growth but it will then induce economic shocks stemming from inflation, then money growth must refer to normal growth. It was found that normal money growth is 16.7631%. Because deviation of money growth in a certain period from its normal growth will affect inflation and economic growth, money growth must be controlled by a small deviation from its normal growth. This method on determining normal money growth can be used as reference to Bank Indonesia in determining economic growth and inflation, and to commercial banks in determining interest rates. Keywords:Economic Growth, Inflation, Money Growth, Normal Growth of Money