Corporate Banking Research Articles

New Audits for Agile Projects in Sumitomo Mitsui Banking Corporation

New Audits for Agile Projects in Sumitomo Mitsui Banking Corporation

КОРПОРАТИВНОЕ УПРАВЛЕНИЕ В БАНКОВСКОМ СЕКТОРЕ РОССИИ В УСЛОВИЯХ НЕБЛАГОПРИЯТНЫХ ФАКТОРОВ ВНЕШНЕЙ СРЕДЫ

The article presents an assessment of the impact of adverse environmental factors on corporate governance in the Russian banking sector. The specifics of national banking corporate governance are revealed. It is concluded that it is necessary to use built-in adaptation mechanisms in the corporate governance system of the banking sector. The main threats from the external environment related to the impact of the package of US and EU sanctions on the financial system of the Russian Federation are identified. Possible ways of using corporate governance tools to smooth out negative influences and reduce the degree of risk in the banking sector are considered. A proactive approach and a focus on maintaining a balance of interests of all interested groups are proposed as the main vectors for the development of corporate governance in the banking sector.

ОЦЕНКА ВЗАИМОСВЯЗЕЙ МЕЖДУ ДОХОДНОСТЬЮ ДОЛГОВЫХ ИНСТРУМЕНТОВ ГОСУДАРСТВА И КЛЮЧЕВОЙ СТАВКОЙ БАНКА РОССИИ

In the article, based on the established relationships between indicators of the development of the government borrowing market and market rates, a representative debt market instrument is identified that is most sensitive to changes in market rates and flexibly protects investments from inflation. At the same time, the trends in the growth of the volume of public debt in recent years, the extent of the use of state debt obligations by organizations of the corporate banking sector in portfolio investments are taken into account. The correlation dependence between the change in the key rate of the Bank of Russia and the government securities index was assessed for two periods characterized by the Bank's monetary policy aimed at lowering or raising the market rate. In the context of a decrease in the key rate, there is an increase in market prices for debt instruments on the exchange market, which means a drop in their yield to maturity. The period of the key rate increase, which is characterized by an atypical situation for the exchange market: a weak inverse relationship between the studied indicators, was additionally studied on the basis of duration. As a result, it was found that bonds with a duration of 1–3 years were the most profitable, according to the evaluation results, since there was a close relationship between the profitability of investments in them and market rates: a decrease in market rates leads to an increase in their profitability.

Related Investing: Family Networks, Gender, and Shareholding in Antebellum New England Corporations

Research into the organization of the firm typically contrasts family businesses with impersonal corporate structures, and kinship ties among corporate elites are often associated with inefficiency and corruption. This analysis of over 14,000 equity investors and executive officers finds that familial networks were embedded in early corporations, not just among directors but also among small shareholders in the firm. Related investing was especially prominent among women and other relatively disadvantaged groups. Personal ties in newer, riskier enterprises encouraged capital mobilization in emerging ventures and persistence in shareholding, and related investing was significantly associated with lower risk of corporate bank failures. The results support a more positive view of family networks in business organizations and in overall economic development.

Dimensional Measurement of Validity Item of Market Complexity and Corporate Strategy in the Banking Sector in Indonesia

The company always faces challenges both internally and externally in managing resources and achieving organizational goals. To be able to compete, corporations need to manage the complexity and uncertainty in the market environment by improving management. To date, few studies are available to verify the items required for business, particularly banking as a guide for designing such complexities. In this regard, this study seeks to provide validity items that are useful for the world of corporate banking, in managing the complexities of the external environment and in formulating and implementing strategies. By combining the concept of human resource management, socio-economic factors through a dimensional measurement with a stakeholder approach, the study findings demonstrate several important keys for banks to manage external elements and strategies as a guide to measuring effectiveness that can be used as a basis for further studies.

Sustainable Corporate Entrepreneurship of Publicly Traded Commercial Banks: A Developing Country Perspective

This paper aims to create empirical support about Creating Shared Value (CSV) notion developed by Porter, M.E. and Kramer, M.R. (2011). To accomplish the aim, the study has developed a set of decision rules to recognize banking products or services that can be characterized as Sustainable Corporate Entrepreneurship (SCE). This has been done by reviewing the literature of SCE, CSR, and CSV in the domain. Hereafter, it has made content analysis of annual reports of randomly selected banking corporations in light of the decision rules developed earlier. The purpose is to explain if CSV notion can be used as credible evidence of current SCE practices in the context of developing country like Bangladesh. To attain this purpose, the study has randomly selected 50 percent of the commercial banks out of 30 DSE listed commercial banks in Bangladesh. The study has found that banking corporations are engaged in SCE, though their performances on that are increasing in absolute terms (over the year), not in relative terms (over general investment). Moreover, financial performance remains constant for banks that are engaged exceptionally in SCE. Hence, the findings somewhat support the CSV notion to explain the current practices of SCE. Keywords: Entrepreneurship, Sustainable entrepreneurship, Sustainable corporate entrepreneurship, Corporate social responsibility, Creating shared value, Shared value

Influence of financial performance on underpricing of shares

Differences in shares prices before being traded on the secondary market caused investors to prefer to buy shares through the initial market at a much lower set price (underpricing of shares The Company wants to signal open information in terms of financial statements to investors by publishing a prospectus financial statement containing the financial performance of the company so that the company can make the right decisions regarding future investments and avoid information asymmetry (Guiness, 1992). This research aims to empirically test independent variables namely financial performance against variable dependent underpricing shares of banking corporations in 2019-2020, both simultaneously and partially. This study sampled as many as 60 banking corporations taken by purposive sampling methods. This study sampled as many as 60 banking corporations taken by purposive sampling methods. This research uses a quantitative approach through multiple regression analysis testing. The researcher found by partially testing that Earnings Per Share (X4), and Price Earning Ratio (X5) variables together influenced on Of Shares underpricing, whereas, the Current Ratio (X1), Return on Equity-ROE (X1), and Return of Assets-ROA (X3) variables had no significant influence on under-pricing of shares.

Does Better Brand Management Influences Consumer Purchase Decisions? Covid-19 Challenges from Pakistan Banking Sector

Banking Sector (BS) is facing more enormous challenges due to the quick spread of NOVEL COVID-19, which locked people's lives over the globe. Brand management is one of the critical concerns. Organizations are managing their brand to attract potential customers from the market in this pandemic situation. For this objective, data have been collected from 210 customers of banking organizations. Data have been gathered using a snowball sampling method, which allows the respondents to spread the questionnaire link with their friends; this study has used SPSS to analyze the data. However, the findings of the study have portrayed that brand management substantially influences consumer purchase behavior. Therefore, whenever organizations develop their strategies to attract potential customers, organizations can increase brand performance by efficiently managing it. Moreover, when customers link with the brand, they use it to learn about customer service and corporate bank strategies.

The impact of a country’s level of development on the nexus between bank lending structure and economic growth

The purpose of this paper is to determine how the impact of the bank lending structure on economic growth differs depending on the level of a country’s development. The article provides suggestions on how much one can rely on the leading growth of corporate and consumer bank lending in order to promote economic growth. The study is based on the panel data for 211 countries for the period 1990—2019 using methods of qualitative and quantitative analysis. The authors have identified three groups of the countries where the impact of the bank lending structure on economic growth is different. In the least developed and low-income countries, the leading growth of both consumer and corporate lending has a positive impact on economic growth. As GDP per capita reaches 4,700—7,000 constant 2010 U.S. dollars, the outstripping growth of consumer lending begins to negatively affect economic growth, while corporate lending continues to have a positive impact. As GDP per capita continues to increase, corporate lending also begins to negatively affect economic growth. The GDP per capita threshold level, after which the negative impact of corporate lending begins, ranges from 6,000 to 42,000 constant 2010 U.S. dollars, some estimates allow us to specify these limits from 13,000 to 22,000 constant 2010 U.S. dollars. Such broad boundaries are determined by the fact that the role of the banking sector in investments financing may differ because of the financial sector model and the national economy structure. However, our results show that in the most developed and high-income countries, faster growth in corporate lending will not contribute to economic growth. The study also finds that the share of mortgage loans in GDP has a positive but insignificant effect on economic growth in all groups of the countries.

The Impact of the Customary on Achieving the Definition of Receivable and its Applications in the Contemporary Financial Transactions

Praise be to Allah, and may peace and prayers be upon his Prophet Mohammed,
 This research is entitled " The Impact of the Customary on Achieving the Definition of Receivable and its Applications in the Contemporary Financial Transactions". The Researcher sheds the light on three major points; the concept of customary and its authority and conditions of consideration, the receivable concept and its procedure and impact in contracts, and the impact of customary in achieving the definition of recievable and its applications in the contemporary financial transactions.
 This research aims to discover to what limit the receivable is based onto the customary, and apply this on many applications that are conducted by the Islamic banking corporations in order to investigate whether there is customary involved in this matter.
 The Researcher concluded that there are transactions in which would be appropriate to involve receivable. The customary leads to accomplish it with the existence of its effects. Also, there are transactions need a jurisprudential and scientific control closer to the established regulations.
 The research included conclusion and indexes.
 Keywords: arrest, custom, financial transactions, jurisprudence, jurisprudence.

The Effect of Corporate Governance Medied by Capital Adequacy and Credit Risk on Financial Performance (Study on Commercial Banks Listed on the Indonesia Stock Exchange)

This study discusses the causal relationship between bank corporate governance, capital adequacy and the probability of bank failure due to credit risk from the creditor's perspective on the bank's financial performance. The probability of failure of commercial banks in measuring risk-taking behavior. The special characteristics of commercial banks with smaller board sizes, shareholder equity, and long-term loans are associated with significantly lower levels of credit risk. Larger supervisory boards and short-term debt are associated with lower levels of credit risk.This study aims to examine and prove the effect of corporate governance on capital adequacy, and corporate governance directly and mediated by capital adequacy and credit risk impact on financial performance. Test and prove that corporate governance affects credit risk. Test and prove the effect capital adequacy to credit risk, as well as capital adequacy directly and mediated by credit risk have an impact on financial performance. Test and prove the effect of credit risk on financial performance. The analysis technique uses Generalized Structured Component Analysis (GSCA). The unit of analysis is 30 conventional commercial banks listed on the Indonesia Stock Exchange for the period 2016-2020, using panel data, namely time series and cross sectional data, with a number of observations of 30 x 5 years = 150 financial statements.The findings of this study are expected to contribute to the development of science in the study of financial management, especially the theory of corporate governance and credit risk management, namely: corporate governance as a source of value creation, ensuring capital adequacy as a buffer for the risk of losing credit portfolios and managing credit risk at a minimum level. to maintain financial stability and increase Profit which ensures financial performance remains in good or healthy condition. This study concludes that corporate governance has a significant influence on capital adequacy and financial performance, because good corporate governance will manage an optimal capital structure and the availability of capital adequacy that makes the company more able to operate and invest optimally, so as to generate maximum profit to improve financial performance. The influence of corporate governance on bank financial performance is also mediated by capital adequacy. Corporate governance has no significant effect on credit risk. Corporate governance cannot determine credit risk, because credit risk is the responsibility of company management in order to control risk in banking operations. Capital adequacy has a significant influence on credit risk and financial performance, because capital adequacy for the company's operations and investments will improve the bank's financial performance. Capital adequacy has a direct and mediated effect of credit risk on financial performance. Sufficient capital is able to reduce credit risk and improve financial performance, because credit risk which has a negative impact on financial performance has been successfully reduced. Keywords: Corporate Governance, Capital Adequacy, Credit Risk, Financial Performance. DOI: 10.7176/RJFA/12-20-06 Publication date: October 31 st 2021

Corporate real estate management and bank profitability

Acquiring property for any business is capital intensive and for that matter, strategically managing such assets is considered equally important. This paper provides an analysis of the value-adding attributes of corporate real estate management (CREM) and bank performance in Ghana. The multiple regression method was applied to a cross-section of both primary and secondary data sourced from 25 commercial banks in Ghana. The study shows that the banks identify with the value-adding attributes of corporate real estate asset management even though there are variations in the level of importance to individual banks. These variations are attributable to the unique mandates of the banks. Further analysis shows that CREM has significantly positive impacts on bank profitability by strategies that help to increase innovations, increase productivity, and promote marketing and sales. The finding suggests that optimizing these CREM strategies could help increase bank profits.

Excellent Services by Frontliner Best Corporate Banking

Tight competition in the banking world requires every bank to be able to provide maximum service to each of its customers. To fulfill this, every bank strives to provide excellent service to each of its customers, Bank BRI is no exception. Bank BRI has Smart Service which is a guideline for excellent service, to overcome things that occur, especially frontliners who directly deal with customers.This study uses a phenomenological method with a qualitative approach where the subject in this study is BRI Bank and the object is customer service. This study aims to provide a detailed explanation of the implementation of Service Excellence. So that it can show the best corporate banking service.Based on the results of the study, it was found that the Smart Service from Bank BRI has met the criteria of excellent service (Barata, 2003 & Arasli et al, 2005) so that Smart Service from Bank BRI is a form of Best Corporate Banking from Bank BRI.

Do SMEs benefit from the corporate sector purchase program? evidence from the eurozone

In this paper, we study the impact of the European Central Bank Corporate Sector Purchase Program on small and medium sized firms' financing using restricted data from the Survey of Access to Finance of Enterprises. We find that following the announcement, credit access improved through the reduction of both formal and informal credit constraints. Loans terms also improved as manifested by a reduction on loan application costs. The unconventional monetary policy intervention is also transmitted through trade credit in production networks as unconstrained borrowers extend more trade credit following the announcement of the program.

Sources of finance for tech startups over its lifecycle: what determines their approach of sources and its success?

PurposeThe purpose of this paper is to ascertain the factors determining the choice of sources of finance for a tech startup over its lifecycle.Design/methodology/approachThis study adopts simple random sampling technique to choose 93 sample tech startups in Bangalore. Further, this study employs the primary data collection from the sampled startups under study through a semi-structured questionnaire and in-depth interviews with the founders/CEOs of these startups. Furthermore, it carries out binary logistic regression analysis to primarily examine the likelihood of a tech startup to approach and access a particular source of finance over its lifecycle.FindingsOur results indicate that a tech startup's choice for a financial source varies with its lifecycle stage and financial requirements. We find that while in its early stage, a tech startup's choice of a financial source is limited to business angels (BA), in the growth stage, it approaches the institutional sources, viz. Venture Capital (VC), Corporate Venture Capital (CVC), Banks and Private Equity (PE) firms alternatively. Out of the three major categories of financial requirements: Human Capital (HC), Research Capital (RC) and Social Capital (SC), the requirement for HC and SC is predominantly funded by VCs, while the acquisition of RC is facilitated by early stage investors (BAs) as well as growth stage investors (CVC and PEs).Research limitations/implicationsThe research implication of the study lies in bringing out the need to understand both the nature and the quantum of financial requirements of tech startups would influence the sources of finance it would approach and obtain finance for its operations and growth.Practical implicationsThe major policy implication of the study refers to the need to promote the diverse sources of finance to meet the diverse needs of finance in different stages of a tech startup's lifecycle. Particularly in an emerging economy, where we do not see the emergence and growth of highly innovative tech startups, the need to promote adequate availability of RC is especially important.Originality/valueThis study makes a key contribution to the entrepreneurial finance literature by empirically investigating the factors determining a tech startup's propensity to approach and access a particular source of finance over its lifecycle.

Integration and volatility spillover amongst banks: a cross-correlation analysis

PurposeThe rising interconnectedness between international banks, at one end, allow participants to share risk and diversification which leads to stable local lending and increase in competitiveness, however, at the other end poses potential for volatility spillover and thereby contagion phenomena. Therefore, investigating the presence of co-integration amongst international banks can provide useful information about risk spillover in times of financial turbulenceDesign/methodology/approachThe authors employ wavelet correlation and wavelet multiple cross-correlation strategies, following an initial decomposition of returns series through maximal overlap discrete wavelet transformation (MODWT).FindingsThe results indicate high integration level between Citibank and Deutsche Bank whereas potential of diversification exists between pairs of Citibank–Hong Kong and Shanghai Banking Corporation and Bank of America–Deutsche Bank, with former more evident in short- and medium-term relationship and later in long-run investment horizon. This paper carries implications for investors, fund managers and policymakers in foreseeing the prospects of contagion attributable to high level integration levels.Practical implicationsImplications for cross-border banking integration includes the presence of common lender effect which appears as a dominant factor for cross-border contagion. Therefore, banks based in different countries should focus more on funds diversification rather than borrowing much from any single creditor. Furthermore, foreign operations based on subsidiaries instead of relying on direct cross-border lending can help in reducing volatility of the foreign financial resources. Nevertheless, based on the results and significant strand of existing literature, the presence of contagion is inevitable, and therefore, a careful consideration of cross-border banking supervision and co-operation by the financial authorities can help in mitigating the volatility of global capital flows.Originality/valueFirst, this study fills gap in the existing literature regarding the discussion on portfolio diversification opportunities in the banking sector. The banking sector is usually perceived as a main source of fixed income securities or financing; however, on the contrary, investors may also be interested for investments in publicly listed bank's stock. Most of the work regarding portfolio diversification revolves around capital market instruments; however, publicly listed shares of largest bank also present an avenue for diversification. Second, major fundamentals and the associated factor for banks performance are reflected in the its profits, either these profits result from large customer base or proper allocation of bank's assets, etc. Therefore, returns of these banks serve as a barometer for their performance and co-movement between any two banks can highlight the presence and extent of their underlying association. Third, the authors apply the latest extensions in wavelet techniques after decomposing returns series through the MODWT framework. This decomposition followed by wavelet estimations allow us to investigate banks integration level across different time and frequency space thereby carrying implications for both short- and long-run investors. Fourth, by analysing the presence of returns co-movements, the authors can predict the extent of plausible contagion since the recent global financial crisis of 2008–2009 used banks as the main medium of propagation of shocks. Fifth, the work presents many implications for the investment community, major trading partners associated with banks through different instruments and for policymakers so that the effect of contagion can be anticipated or at least mitigated in case of future financial turbulence.HighlightsWe investigate portfolio diversification opportunities in the banking sector.Time-frequency returns co-movements is measures by applying wavelet multiple correlation and cross-correlation techniques on decomposed return series.Deutsche Bank and Bank of America act as highest transmitter and recipient of volatility, respectively using the spillover approach of Diebold and Yilmaz (2012).Citibank and Deutsche Bank exhibit high pairwise correlation indicating no diversification benefits.Citibank exhibits high level of integration with other banks in the short- and medium-run whereas Deutsche Bank exercises high integration levels in the long-run investment period.

Does Gender Representation at Decision Making Levels Matter for Better Financial Performance of Local Licensed Commercial Banks in Sri Lanka?

Aim: Female representation in top corporate positions has been discussed widely around the world over the last decade, mainly due to the significant gap observed between the number of females with higher educational qualifications and the number of females in employment. Accordingly, this study aims to identify the relationship between the female presence within boardrooms and top management teams of local licensed commercial banks and the financial performance of those banks, which is a timely concern.
 Place and Duration of Study: Amana Bank PLC, Commercial Bank of Ceylon PLC, DFCC Bank PLC, Hatton National Bank PLC, National Development Bank PLC, Nations Trust Bank PLC, Pan Asia Banking Corporation PLC, Sampath Bank PLC, Seylan Bank PLC, and Union Bank of Colombo PLC were studied during the time period 2011 to 2019.
 Methodology: The time series data analysis method has been used for 10 local licensed commercial banks in Sri Lanka, excluding one bank which was not a PLC. The annual reports of the respective banks were used to gather the secondary data required for the study.
 Results: The regression analysis explained that female presence within boardrooms is positive and significant with respect to ROE and positive and insignificant with respect to ROA, whereas females in top management has a positive but insignificant relationship to ROA and a negative but insignificant relationship to ROE. The percentage changes in ROE and ROA explained by the two independent variables are relatively low. Accordingly, no significant relationships between female presence within boardrooms and top management teams and firm financial performance were identified.
 Conclusion: The insignificant relationships between the variables indicate that it is not necessary for these banks to employ females in order to prosper in their financial performance. However, the banks could still consider employing females in the boardroom to empower gender equality since such a presence does not have a negative impact on financial performance.

Leveraging CSR for Sustainability: Assessing Performance Implications of Sustainability Reporting in a National Business System

In the light of Agenda 2030 awareness of sustainability is steadily growing all over the world. Devastating phenomena like pandemics (Sustainable Development Goal 3 (SDGs—Agenda 2030)), poverty (Sustainable Development Goal 1 (SDGs—Agenda 2030)) as well as climate change (Sustainable Development Goal 13 (SDGs—Agenda 2030)) threaten humanity, calling for more sustainable solutions. Although economic growth (Sustainable Development Goal 8 (SDGs—Agenda 2030)) is one of the principal goals for a sustainable future, little research has been devoted to the interface of corporate social responsibility (CSR) and sustainability and their contribution to the financial sector, in view of sustainable banking. Even fewer are the studies concerning sustainable banking in Greece. This paper attempts a comparative overview of sustainability integration into businesses, focusing on the banking industry. The current theoretical analysis initially provides an extended review of the CSR and sustainability concepts, which is followed by a comprehensive analysis of non-financial disclosures (NFDs) and their business value, providing some evidence from Greece. The following sections refer to the performance implications and sustainability integration in the banking industry. Eventually, sustainable banking seems to enhance banking performance in a national business system. This is a very important deduction for sustainability to be both the cause and effect of corporate banking. Along with the discussion, some avenues for future research are highlighted.

Assessment of the impact of bank lending on business entities’ performance using structural equation modeling

The paper aims to assess the influence of bank lending on the performance of enterprises in the real sector. The relevance of the study for different countries, including Kazakhstan, Kyrgyzstan and Ukraine, is shown. Structural equation modeling of the impact of bank lending on the performance of enterprises in the real sector is carried out using Ukraine as an example. Six key indicators of real sector enterprises’ performance for the period of 2007–2019 were selected as an information basis of the study. To assess the abovementioned impact, structural equation modeling was used, i.e., the Statistica program was selected as a software tool to evaluate the resulting model’s adequacy and determine the level of statistical significance of its parameters. The obtained results prove that the business lending sector in Ukraine has significant potential for its development, which ultimately will have a positive effect on the efficiency of the real sector enterprises. Moreover, adopting a balanced state policy in the sector of corporate bank lending can give impetus to the development of the domestic sector of real production and help Ukrainian enterprises overcome the crisis caused by COVID-19.

Modelling corporate bank accounts

We discuss the modelling of corporate bank accounts using a proprietary dataset. We thus offer a principled treatment of a genuine industrial problem. The corporate bank accounts in our study constitute spare, irregularly-spaced time series that may take both positive and negative values. We thus builds on previous models where the underlying is real-valued. We describe an intra-monthly effect identified by practitioners whereby account uncertainty is typically lowest at the beginning and end of each month and highest in the middle. However, our theory also allows for the opposite effect to occur. In-sample applications demonstrate the statistical significance of the hypothesised monthly effect. Out-of-sample forecasting applications offer a 9% improvement compared to a standard SARIMA approach.