Financial Performance Of Banks Research Articles

Impact of senior management’s financial intelligence on the financial performance of banks and insurance companies in the Gaza Strip

PurposeThis study investigates the impact of senior management’s financial intelligence on the financialperformance of banks and insurance companies operating in the Gaza Strip.DesignThe study followed the descriptive analytical approach to measure financial performance by relying on the financial reports of the sample companies for 2022. Two primary sources were employed: a questionnaire to collect the financial intelligence data, and it was distributed to a sample of individuals representing the management of companies operating in the Gaza Strip. A total of (67) completed questionnaires were obtained. In addition, secondary data from 11 banks and insurance companies operating in the Gaza Strip was collected to compute the financial performance variables such as returns on investment (ROI), assets (ROA), and equity (ROE). The collected data were then analyzed using SPSS software version 28.FindingsThe results indicated that the dimensions of financial intelligence were available. Banks and insurance companies have good financial performance. Furthermore, financial intelligence (understanding beyond the numbers, understanding financial analysis, and grasping the overall financial picture) significantly affected the performance of banks and insurance companies, as measured by ROI and ROA. The dimensions of financial intelligence (mastering financial and monetary skills, understanding financial analysis, and grasping the overall financial picture) also significantly impacted the performance of banks and insurance companies as measured by ROE. Simultaneously, there was no significant effect of financial intelligence (mastering financial and monetary skills) on the performance of banks and insurance companies as measured by ROI and ROA. Furthermore, there was no significant effect of financial intelligence (understanding beyond the numbers) on the performance of banks and insurance companies as measured by ROE.OriginalityTo the best of the author’s knowledge, the current study is among the first research efforts in Palestine.Practical implicationsThe findings indicate that senior management should pay greater attention to developing financial intelligence skills among employees in supervisory positions, especially those in the administrative, financial, and planning fields, due to their impact on improving companies’ performance.

Good Corporate Governance Toward Financial Performance Of Islamic Bank In Indonesia

This research aims to analyze the influence of good corporate governance (GCG) on the financial performance of Islamic banks in Indonesia. This study uses a quantitative approach. The population in this research is 16 Islamic banks registered with the Financial Services Authority (FSA) for the 2021-2022 period. The sample used was 10 Islamic banks that issued quarterly report data. Sample selection was carried out using the purposive sampling method. The data collection technique uses secondary data in Islamic bank documentation and is processed using the SPSS 25 application with multiple linear regression tests. The results of this research are that the board of commissioners has a negative effect on the financial performance of Islamic banks, and the board of directors has a positive effect on the financial performance of Islamic banks. In contrast, the Sharia supervisory board does not affect the financial performance of Islamic banks. Theoretical research can complement existing theories and be a reference for future research. This research can be a reference for Islamic banking in analyzing corporate governance standards to provide investors with more knowledge and understanding about the financial performance of Islamic banking and enable investors to make the right decisions.

Risk and reward: unraveling the link between credit risk, governance and financial performance in banking industry

Purpose This study aims to investigate the moderating role of corporate governance (CG) on the relationship between credit risk (CRs) and financial performance (FP) of banks listed in the Palestine Securities’ Exchange (PEX) and Amman Securities’ Exchange (ASE). Design/methodology/approach This study used a hypothesis-testing research design to collect data from the annual reports of 21 banks listed on (PEX) and (ASE). Secondary data, annual reports and disclosures were used between from 2009 to 2019. Descriptive and inferential statistics were used, along with correlation analysis to evaluate linear relationships between variables. Data was collected based on panel data, the VIF was used to test multicollinearity and binary logistic regression was used to develop the research model. Findings The regression results showed the association between CR and firm performance depends on the measurement of each factor applied. The results showed mixed results between loans to total assets (LTA) and nonperforming loans to total loans (NPLs) with FP. LTA has a significant and positive effect on TOBINSQ and return on equity (ROE), but an insignificant and positive effect on return on assets (ROA). On the other hand, NPLs have a significant and negative effect on ROA, whereas NPLs have a weak and positive effect on TOBINSQ. However, there is an insignificant and positive effect of NPLs on ROE. Moreover, the results demonstrated that CG moderated the relationship between CRs and FP of banks. The practical contribution of this paper, for bank policymakers and authorities, the study’s implications are noteworthy. Understanding the varied impacts of different CR measures on FP can help regulators and policymakers design more tailored and effective risk management frameworks for banks. Research limitations/implications This study had limitations that future research might be able to address. First, the small size of the sample used in the study included 21 banks listed on the PEX and ASE. Likewise, the ASE and PEX are considered developing stock exchanges, so the results of this study may differ from those of other stock exchanges. Second, only CRs were considered in this study when examining the association between the profitability of Palestinian banks and ASE. Other studies can be undertaken on other nonfinancial risks, such as operational risk, to measure the differences between them and examine their effects on the profitability of Palestinian and Jordanian banks. Other studies might be performed to compare CRs and its impact on profitability in Palestinian and Jordanian banks with those in other Western and Eastern banks. Furthermore, in addition to TOBINSQ, ROA and ROE, researchers can use other financial indicators to measure profitability. This will contribute to substantiating the present study’s findings. Originality/value Although several studies have examined the relationship between CRs and FP in developed and developing countries, the results have been mixed. However, this study is one of the few studies that examined the moderating role of CG in association with CRs and FP, especially on Palestinian and Jordanian contexts. Finally, the findings offer policymakers and practitioners of Palestinian and Jordanian contexts.

Ratio Analysis of Axis Bank

This report presents a thorough examination of AXIS Bank's financial performance utilizing ratio analysis as the primary tool. Ratio analysis offers a quantitative method to assess the bank's financial health and operational efficiency by comparing key financial metrics over time and against industry benchmarks. The analysis begins by evaluating AXIS Bank's current ratio, which measures the proportion of current assets to current liabilities. A higher current ratio indicates a greater ability to cover short-term obligations, suggesting a healthy liquidity position. Conversely, a lower ratio may raise concerns about liquidity risk. In the case of AXIS Bank, the current ratio analysis reveals a robust position, indicating a prudent allocation of resources towards current assets. Furthermore, the report explores the quick ratio, also known as the acid-test ratio, which provides a more stringent assessment of liquidity by excluding inventory from current assets. This ratio helps determine the bank's ability to meet short-term obligations without relying on inventory liquidation. Comparing the quick ratio with the current ratio provides additional insights into the composition of AXIS Bank's current assets and its liquidity management practices. Additionally, the analysis considers the fixed/worth ratio, which assesses the proportion of fixed assets financed by owner's equity. A higher fixed/worth ratio suggests greater reliance on equity financing for fixed asset investments, indicating a lower financial risk. Conversely, a lower ratio may signal higher leverage and potential financial vulnerability. Evaluating this ratio provides valuable insights into AXIS Bank's capital structure and risk management strategies. Furthermore, the report examines the cash flow statement to assess the bank's cash generation and utilization across operating, investing, and financing activities. Analyzing cash flow patterns helps identify trends in cash generation, liquidity management, and investment decisions. In the case of AXIS Bank, the analysis reveals a positive trend in cash generated from operating and financing activities, indicating healthy cash inflows. However, negative cash flow from investing activities warrants further investigation into the bank's investment strategies and capital expenditure decisions. Overall, this comprehensive analysis of AXIS Bank's financial ratios and cash flow dynamics provides valuable insights into the bank's financial position, liquidity management, and operational efficiency. The findings offer a basis for strategic decision-making and recommendations to optimize performance and ensure sustained growth and stability..

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

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.

THE IMPACT OF CUSTOMER RELATIONSHIP MANAGEMENT ON THE FINANCIAL PERFORMANCE OF BANKS IN DEVELOPING COUNTRIES

<p>This research aims to examine the impact of customer relationship management on the financial performance of banks in Sierra Leone. The research objectives inquire into the relationship between customer relationship management constructs such as customer knowledge, customer interaction, customer value, and customer satisfaction. The empirical literature reviews these very CRM constructs highlighted herein. Applying the mixed method of quantitative technique and qualitative, the population of this research was staff and customers within the banking sector. The sample size was 100 respondents (50 customers and 50 staff). The primary data was acquired from questionnaires and secondary data was acquired from published resources. The findings disclose that all four customer relationship variables (customer knowledge, customer interaction, customer value, and customer satisfaction) have positive and strong relationships with the financial performance of the banks.</p><p><strong> </strong></p><p><strong>JEL:</strong> E61, E62, P35</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/soc/0788/a.php" alt="Hit counter" /></p>

A Comparative Study between Growth of offering supply chain finance with Non-offering Banks in Pakistan.

This study empirically examines a comparative study between banks growth of offering supply chain finance with Non-offering Banks in Pakistan. This study used dynamic generalized method of moments (GMM) technique, based on 22 Pakistani Banks (10 offer supply chain finance and 12 non-offering supply chain finance) data during 2012-2022. The results show a significant difference between banks growth by offering and non-offering supply chain finance. Furthermore, the results show a significant positive impact of banks growth with supply chain finance on banks financial performance. This study encourages banks to offer supply chain finance that contributes towards their growth and financial performance.

Smart technologies in banking

The article is aimed at the current issues of using smart technologies and innovative approach during evolution and transformation processes in banking. The study identifies the special place of this topic for achieving a high level of efficiency and competitiveness of banks and characterizes the impact of the introduction of technological approaches on the customer base and its perception of banking products. The main functions of banking innovations in this area are analyzed and the justification of their feasibility at the present stage of economic development is provided. A number of the most promising technologies and approaches to banking activities are allocated, namely: contactless payment, digital wallets, biometric identification, person-to-person payments, collective financing, omnichannel banking, interaction with FinTech companies, blockchain, big data, artificial intelligence, smart machines, Internet of Things, behavioral banking, retail bank, application programming interfaces, multi-component bank, open banking, augmented reality, robotic automation, hybrid clouds. The relevance of the identified areas is proved based on their perception by analyzing the popularity of the identified topics in Google search queries using the Google Trends tool. The perception of smart technologies in banking by Internet users in the world and specifically in Ukraine is investigated, which gave grounds to conclude that there is a significant interest in them, and therefore the expediency of further study and implementation in the activities of banks. It is identified that the most perspective technologies are biometric identification, blockchain, Internet of Things, big data analysis, artificial intelligence, etc. Several technologies have been identified, namely, collective financing (crowdfunding), application programming interfaces (APIs) and digital wallets, which are less popular in Ukraine than in the world in general, and therefore require detailed research and study of the relevance of their application in the domestic banking market. Possible directions for further innovative development of banking institutions based on the use of smart technologies are proposed. Based on panel data for 60 banks of Ukraine for the period 2014-2022, the author analyzes the correlations between the indicators of the use of digital technologies and the financial performance of banks and builds regression dependencies of financial indicators of banks on the indicator of the number of electronic means of payment in active circulation. The theoretical value of the study is to identify the most promising smart technologies and innovative approaches to banking business in modern conditions. The practical value lies in studying the level of perception of high-tech innovations in the field of banking services by the active public and identifying further directions for the development of this process. We consider it advisable to direct further research in the context of a detailed study of the possibilities of applying the identified technologies in specific banking products or business processes.

PENGARUH LOAN TO DEPOSIT RATIO, NON PERFORMING LOAN, DEBT TO EQUITY RATIO, MANAJEMEN LABA TERHADAP KINERJA KEUANGAN BPD 2018-2022

This research aims to analyze the influence of financial ratios and earnings management on bank financial performance which is projected using ROA. Financial ratios include LDR, NPL, DER. This research usesnon-probability sampling with typepurposive sampling  to retrieve population data from the financial reports of Regional Development Banks registered with the OJK for 2018-2022. The data analysis methods used are descriptive statistics, classical assumption testing, multiple linear regression analysis, hypothesis testing and determinant coefficient analysis (R2). The results of this research show that the NPL variable partially influences financial performance, while the LDR, DER and earnings management variables have no influence on financial performance. Meanwhile, simultaneously the LDR, NPL, DER and earnings management variables have no effect on financial performance. Based on the results of the coefficient of determination (R2), the contribution of the independent variable to the dependent variable has a value of 34.1%.

Analysis financial ratio on financial performance of banks with problem finance as intervening variables

The purpose of this study was to analyze the effect of CAR, BOPO and FDR on ROA with Non-performing Financing as an Intervening Variable in Islamic Commercial Banks for the 2016-2020 period. Where this research uses quantitative research using regression analysis as data analysis. This study uses secondary data in the form of panels using the annual data of each Islamic commercial bank selected as the research sample in the 2016-2020 period. The data obtained were then analyzed using the Eviews 10 application tool. The results of this study indicate that the CAR, BOPO, FDR and NPF variables have a partial effect on ROA. The CAR, FDR and NPF variables have no significant negative effect on ROA, while the BOPO variable has a significant negative effect on ROA. And the NPF variable cannot mediate the effect of CAR, BOPO and FDR on ROA. And the results of the research on the ROA of Islamic Commercial Banks before the pandemic (2019) and during the pandemic (2020) using the Wilcoxon Signed Rank Test showed that there were significant differences.

Factors Affecting the Financial Performance of Banks in the Era of Digital Transformation: A Perspective from Vietnam’s Banking Industry

This study aims to explore the factors influencing the financial performance of banks in Vietnam amidst the on-going digital transformation. In today's dynamic economic landscape, characterised by digital transformation and heightened regulatory standards, banks are compelled to innovate in response to continuous macroeconomic fluctuations. While the importance of increasing financial performance was largely recognised, the development and empirical validation of a financial performance model in the banking digital transformation context is not yet completely addressed, especially in developing countries. Utilising foundational theories, this research employed SMARTPLS 4 software alongside a blend of quantitative and qualitative analyses to assess the influences on the financial performance of banks amid digital transformation. Data were collected from 400 bank employees from all genders across Vietnam by the quota sampling method. Most of the survey participants lived in big cities where many banks were concentrated. The research results showed that there were three main factors directly affecting bank financial performance including Deposit mobilisation, Bank profitability, and Loyalty respectively according to the level of impact. This result highlights the importance of effective deposit mobilisation in achieving the bank's financial goals. The results also indicated that the growth of banks' profits is closely tied to their capacity to maintain loyal customers. Additionally, the study revealed a strong correlation between nine other factors, such as Savings Interest rates, Bank technology, and Inflation, with three intermediary factors. Until now, there are very few studies that have comprehensively evaluated both financial and non-financial factors' effect on bank financial performance as this research. This study also offered compelling insights into the strategies of successful banks in Vietnam today, underscoring the importance of investing in bank technology and presenting valuable recommendations. Based on the findings, banks can specifically focus on managing the identified variables and deploying appropriate business strategies to enhance their financial performance for sustainable development in the digital age.

Are Banking Financial Performances and Green Banking Disclosure Associated with Bank Profitability?

This study examines how banking financial performance and green banking disclosure influence profitability. Financial performance in this research consists of capital adequacy ratio, non-performing loans, efficiency ratio, and loan-to-savings ratio. The research sample consisted of 30 samples selected using a purposive sampling method from 6 banking sector companies listed on the Indonesia Stock Exchange in 2018-2022, which consistently reported their green banking practices and did not experience losses during the research period. The analytical method in this research is panel data regression analysis. The research results show that the capital adequacy ratio and efficiency ratio have a negative effect on profitability. On the other hand, non-performing loans and the loan-to-deposit ratio positively affect company profits. Furthermore, green banking disclosure has a negative and significant effect on profitability. Implementing Green Banking can cause a decrease in profitability due to additional costs associated with its implementation. This research provides additional literature related to the implementation of green banking in Indonesia.

The Effect of Corporate Social Responsibility as a Moderating Variable on Determinants of Banking Profitability in Indonesia

This study examined the effect of Corporate Social Responsibility (CSR) as a moderating variable on determinants of a bank’s profitability listed in the Indonesia Stock Exchange (IDX). This study used secondary data from banking annual reports listed in IDX during 2018-2021, with a total of 100 data from 25 banking companies that met the purposive sampling criteria. The data were analysed using moderated regression analysis with STATA software. This study found that simultaneously, Non-performing Loan (NPL), Good Corporate Governance (GCG), Third Party Funds (TPF), and Cost Efficiency have a significant impact on profitability. While individually, GCG has a significant negative effect, NPL has an insignificant negative effect, Third Party Funds has a significant positive effect, and Cost Efficiency has a significant negative effect on profitability. Furthermore, this study found that CSR has a positive moderating effect on the relationship between TPF and profitability, but CSR has a negative moderating effect on the relationship between Cost Efficiency and profitability. On the other hand, CSR was unable to moderate the relationship of NPL and GCG to profitability. This study contributes to the literature by suggesting the implementation of CSR not only as a compliance to regulation but also as a strategy to increase banking financial performance.

STRUKTUR MODAL DAN KINERJA KEUANGAN BANK DI INDONESIA

This research aims to investigate how the capital structure of banks in Indonesia is related to the level of profitability, taking into account company size and the overall impact of the Covid-19 pandemic and whether the increase in capital (debt) provided by the Indonesian government affects bank profitability, providing new results. . considering the increased credit risks resulting from the pandemic. This study fulfills the research objectives by building a broad framework regarding the influence of liquidity, capital adequacy, credit risk, tax protection and ownership structure on bank financial performance. This research uses regression todetermine the effect of leverage, company size and the Covid-19 pandemic on banking profitability. Data for 38 public banks taken from the Bloomberg Terminal in 2014-2021. The research results show that leverage has a positive effect on banking profitability, while company size has a negative effect on leverage and profitability. High debt levels pressure management to meet shareholders' required returns. Large banks prefer risk-free government bonds rather than providing loans to creditors, especially when economic conditions are uncertain. The Covid-19 pandemic has no effect on banking profitability

ESG disclosure and financial performance: Empirical study of Vietnamese commercial banks

Environmental, social, and governance (ESG) disclosure becomes vital for banks to be transparent and accountable for their investments and lending decisions to shareholders, regulators, and society. The potential enhancement of shareholder value through ESG disclosure is still inconsistent. Empirical studies on the association between ESG disclosure and financial performance are mixed and limited in emerging economies. This study aims to examine whether ESG disclosure impacts the financial performance of 24 Vietnamese commercial banks in terms of return on assets (ROA), return on equity (ROE), and net interest margin (NIM). The study uses the feasible generalized least squares estimation method based on panel data from 2018 to 2022. The study employs content analysis on 12 themes related to environmental, social, and governance pillars to score policy disclosure based on the Fair Finance Guide Methodology. The results highlight the positive effects of ESG policy disclosure, individual environment disclosure (E), and individual governance disclosure (G) on bank financial performance. Notably, ESG, E, and G have the largest influence on ROE, with coefficients of 0.051, 0.036, and 0.027, respectively, at a 5% significance level. However, the study does not provide evidence of a statistically significant association between social disclosure and financial performance. These results provide empirical evidence for regulators and bank managers to shape ESG policies and practices aligning with international standards. AcknowledgmentESG disclosure score of 11 banks as primary data in this study is conducted under the project coordinated by the Fair Finance Vietnam coalition, as part of Fair Finance International.

ANALISIS RASIO BIAYA DANA DALAM KINERJA KEUANGAN BANK : PENDEKATAN STUDI KASUS INDUSTRI PERBANKAN DI INDONESIA

The cost of funds ratio is a matrix used to carry out analysis in financial reports to evaluate banking financial performance by connecting various factors that influence the cost of funds ratio. Financial ratio analysis is part of business analysis that assesses a company's prospects and risks. Cost of funds ratio analysis describes the relationship between the amount of money and the company's burden in managing these finances to increase profitability. Cost of funds ratio analysis method. Research was conducted to identify information related to cost of funds ratio analysis in banking. The research results show the significant impact of financial ratio analysis on the financial performance of banking companies in Indonesia. Suggestions include increasing LDR, reducing NPL, controlling operational costs, and improving customer service. It is also recommended that the banking industry be able to reduce the cost of funds ratio regularly to improve its financial performance.

Loopholes in the Indian Banking System concerning Non-Performing Assets (NPAs) – A Case Study of “Axis Bank and HDFC Bank”

Abstract -The paper presents a comparative case analysis of two leading banks, Axis Bank and HDFC Bank. The rising tide of Non-Performing Assets (NPAs) in the banking sector is a major threat to financial stability and economic progress. The case study uncovered severe deficiencies in risk management, credit evaluation, and regulatory compliance, which have resulted in a considerable accumulation of Non-Performing Assets. The banks' exposure to economically sensitive sectors amplifies the impact of downturns on asset quality. The limitations in credit risk assessment underline the necessity for increased due diligence. Regulatory frameworks, such as the Insolvency and Bankruptcy Code, and prompt corrective action have a significant impact on NPA responses. The findings highlight the complicated interplay between internal banking practices, regulatory frameworks, and economic conditions that affect a bank's financial performance. Addressing discovered weaknesses inside both these banks is important to the stability of India's financial system. The implications, as indicated by rising NPAs, are felt throughout the sector, jeopardizing overall resilience. Addressing these problems is crucial for reducing systemic risks, preventing a credit crisis, and rebuilding trust in the financial industry. A better banking system is critical for India's financial stability, economic growth, and stakeholder trust. As major private sector players, Axis Bank and HDFC Bank’s successful remediation set a precedent, emphasizing the need for excellent risk management, regulatory compliance, and strategic adaptation. Key Words: Axis Bank, HDFC Bank, Non-Performing Assets, Risk Management, Regulatory Compliance, Financial Stability, Economic Impact