Financial Performance Of Banks Research Articles

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

Good corporate governance improves banking financial performance

This study aims to determine (1) the effect of Institutional Ownership on the Financial Performance of Go Public Banks listed on the IDX, (2) the influence of the Independent Board of Commissioners on the Financial Performance of Go Public Banks listed on the IDX, (3) the influence of the Audit Committee on the Financial Performance of Go Public Banks listed on the IDX. The population of this study is all public banks listed on the Indonesia Stock Exchange for the 2018-2022 period, totaling 43 banks. Sample selection through purposive sampling method. There were 27 banking companies that met the criteria as a research sample so that the research data amounted to 135. The data analysis technique used is descriptive statistics. The results of this study show that Institutional Ownership has a positive and significant effect on Banking Financial Performance. The Board of Independent Commissioners has an insignificant positive effect on the Financial Performance of the Banks. The Audit Committee has an insignificant positive effect on Banking Financial Performance

Analysis of Factor that Affect Financial Performance of PD. BPR Bahteramas Konawe

This study aims to analyze the effect of Capital Adequacy Ratio (CAR), Loan to Deposit Ratio (LDR), Non Performing Loan (NPL), and Operating Costs and Operating Income (BOPO) on financial performance, as measured by Return On Assets (ROA), at PD. BPR Bahteramas Konawe. Using secondary data from the annual report of PD. BPR Bahteramas Konawe during the 2018-2022 period, this study applies multiple linear regression analysis with classical assumption tests and hypothesis testing to evaluate the effect of these variables, both simultaneously and partially, on ROA. The analytical tool used in this research is SPSS version 25. The results showed that CAR, LDR, NPL, and BOPO together had a positive and significant influence on the ROA of PD. BPR Bahteramas Konawe, indicating that increasing these values in accordance with the BPR health standards set by the Financial Services Authority (OJK) contributes to increasing bank profitability. Partially, CAR has a positive but insignificant effect on ROA, while LDR and NPL have a negative but insignificant effect. The significant negative effect of BOPO on ROA indicates that higher operational efficiency contributes to improved bank financial performance. This research provides new insights in banking finance literature regarding the importance of managing capital, liquidity, credit, and operational efficiency in improving bank financial performance, especially for PD. BPR Bahteramas Konawe in the context of OJK regulations.

Pengaruh Sharia Compliance dan Islamic Corporate Governance Terhadap Kinerja Keungan Bank BPRS Paduarta Sinsani Medan

This study explores the influence of Sharia Compliance and Islamic Corporate Governance on the financial performance of Bank BPRS Paduarta Insani Medan. Using an associative approach and employing purposive sampling techniques, the research utilizes primary data analyzed with SPSS 25 software. The results of the normality test indicate that the research data is normally distributed. The multicollinearity test shows no symptoms of multicollinearity among independent variables. The results of the partial regression test (t-test) demonstrate that both Sharia Compliance and Islamic Corporate Governance have a positive and significant impact on the financial performance of Bank BPRS Paduarta Insani Medan. The coefficient of determination (R2) is 0.961, signifying that the independent variables can explain 96.1% of the variation in the bank's financial performance, while the remaining percentage is influenced by other variables outside the regression model. In conclusion, Sharia Compliance and Islamic Corporate Governance have a positive and significant influence on the financial performance of Bank BPRS Paduarta Insani Medan. These findings are consistent with previous research that supports the importance of Sharia compliance and good corporate governance in the context of Islamic banking.

The Impact of Financial Technology on Bank Financial Performance

This research was conducted to determine whether there is a significant influence on financial performance before and after the operation of Financial Technology (Fintech) in Jambi. The variables used in this study employed financial ratios, namely Capital Adequacy Ratio (CAR), Loan to Deposit Ratio (LDR), Return Of Assets (ROA), Operational Efficiency Ratio (BOPO), and Non-Performing Loan (NPL) in banks registered with the Financial Services Authority (OJK) for the period 2015-2018. The testing methods utilized in this research include the Paired Sample T-test for normally distributed data and the Wilcoxon Sign Rank Test for non-normally distributed data. The findings of this study indicate a significant influence on the financial ratios of CAR and BOPO. Meanwhile, for the variables ROA, LDR, and NPL, there is no significant influence on the financial performance of banking companies before and after the emergence of Financial Technology (Fintech) in Jambi.

Effect of Electronic Fraud on the Financial Performance of Banks in Nigeria

The study investigated the effect of electronic fraud on the financial performance of banks in Nigeria. The specific objectives were to investigate the effect of electronic fraud through online web transactions, evaluate the effect of electronic fraud through automated teller machine, to determine the effect of fraud through point of sale machine, and to investigate the effect of fraud through mobile phone USSD transactions on the financial performance of selected deposit money banks in Nigeria. Panel Generalized method of moments (GMM) was used to analyze the panel series of the model. The Hausman test indicated the random effect model as most fit for the estimation. The major findings of the study revealed that fraud through the automated teller machine (AEF) has significant negative impact on the financial performance of the deposit money banks in Nigeria. The panel regression result also revealed that fraud through the mobile phone channel (MPEF), and fraud through the online banking channel (OBEF) had significant negative effect on the financial performance of the banks studied. The study concluded that electronic fraud has significant negative relationship with the performance of banks. The policy implication of these findings holds for both management of banks and the financial sector authorities to engineer strategic fraud mitigation technology to strengthen confidence in the financial system. Based on the findings, the study recommended that there is an urgent need for effective monitoring of bank fraud which will allow for the growth of Nigeria deposit banks performance. This is necessary especially this period that the world is going cashless and e payment instrument are used for cashless banking system. And failure to do that, will affect customer’s confidence in the industry. It is also recommended that Bank fraud shall be reduced through effective supervision and regulation of banks by the monetary authorities so that financial industry will contribute to the economy.

Analysis of the Effects of Agency Costs on Financial Performance of Commercial Banks Listed at the Nairobi Securities Exchange in Mombasa County, Kenya

Agency costs result from a principal-agent relationship's conflicting interests. The relationship develops because the principal may not be able to manage the business since they are technologically illiterate, numerous, and geographically spread; as a result, they hire the agent. In a commercial bank, there are various relationships that show principal agent relationships, with the most prevalent one being the link between the shareholders and the management. Agency fees are paid with the intention of aligning the agents' and principal's ambitions in order to realize the principal's overarching intentions. Therefore, the perseverance of this study was to analyze agency costs and their effects on financial performance. In this study, the agency cost on financial performance of public commercial banks was analyzed. Specific objectives were; to establish how monitoring cost affect the financial performance of quoted commercial banks in Mombasa County, to assess the effect of bonding cost on financial performance of listed commercial banks in Mombasa county, to examine the extent to which residual loss affect the financial performance of commercial banks in Mombasa county and to determine the effects of restructuring cost on financial performance of listed commercial banks in Mombasa County- directed the study. Theories supporting this study were as follows; agency theories, free cash flow and stakeholder’s theory. Descriptive design is a kind of research methodology which establishes the connection between variables. It was used in this study to identify both the broad and the detailed study goals. A census of the 10 listed commercial banks in Mombasa County was conducted as part of the work and purposive sampling was be used. This study used qualitative and quantitative methods. Validity was tested through interview while reliability was tested using Cronbach alpha. The data was analyzed using inferential statistics like regression and correlation and descriptive statistics like mean and standard deviation using the Statistical Package for Social Science (SPSS) Version 22.0. The results were presented using cross tabulation, frequency tables, and charts. Findings indicated that there was a significant impact between; monitoring cost, bonding cost and residual cost and the financial performance. Restructuring cost were determined to have a favourable impact on financial performance. Therefore, the study recommends implementing an efficient internal control system by listed commercial bank management. This will assist in cutting down on the cost of auditing, administrative costs, and wasteful and unneeded spending, Managers should be paid more and attaching monetary or share bonuses or option entitlements to particular firm performance and to adopt a type of restructuring that will align with the relevant strategy and objectives.

ANALISIS KINERJA SAHAM BANK SYARIAH INDONESIA SATU TAHUN PASCA MERGER (STUDI KASUS BANK SYARIAH INDONESIA, TBK)

This study reveals the performance of Bank Syariah Indonesia, compared to the performance of BRISyariah which is one of the banks that merged into BSI. Prior to the merger, there were three Sharia Banks owned to the state-owned Bank Association, namely Bank BRISyariah (BRIS) which had gone public, as well as Bank BNI Syariah (BNIS) and Bank Syariah Mandiri (BSM) which had not gone public. BSI's financial performance is better than the financial performance of BRIS, BNIS, and BSM as can be seen from the income statement and balance sheet, as well as from financial ratios such as ROA, ROE, EM, PM and AU. BSI's stock performance is also better than the stock performance of BRIS, as can be seen from PER and PBV. The improvement in financial performance and stock performance after the merger shows that the synergy and increased economies of scale resulting from the merger have had a positive impact on the bank's financial performance, which has also been appreciated by shareholders on the stock exchange. Meanwhile, the analysis of BSI's stock beta shows that the number after the merger is higher than the BRIS beta before the merger. However, the increase in beta cannot be concluded as an increase in systematic risk, because the beta of BNIS and BSM are not yet known.

THE EFFECT OF BANK RISK ON FINANCIAL PERFORMANCE (CASE STUDY PT BANK NEGARA INDONESIA, TBK PERIOD 2018 - 2022)

One of the bank financial performance is influenced by bank risk factors. This study aims to determine the effect of banking risk analyzed from credit risk (NPL), market risk (NIM), liquidity risk (LDR) and operational risk (BOPO) on financial performance (ROA) and (ROE) at PT Bank Negara Indonesia, Tbk for the period 2018-2022. The analysis method used is descriptive analysis with a quantitative approach. Hypothesis testing is carried out using the SPSS22 data processing application, to carry out the classical assumption test, multiple linear regression test, correlation test (R), determination coefficient test (R2), partial significance test (t test) and simultaneous significance test (F test). The results showed that partially NPL had no effect on ROA and ROE; NIM had a significant positive effect on ROA and ROE; LDR had a significant positive effect on ROA and ROE; BOPO had no effect on ROA and ROE of PT Bank Negara Indonesia, Tbk for the period 2018-2022. The results also show that NPL, NIM, LDR and BOPO simultaneously have a significant positive effect on ROA and ROE of PT Bank Negara Indonesia, Tbk for the period 2018-2022.

A Composite Study of HDFC Bank Financial Performance

This composite study delves into the financial performance of HDFC Bank, a cornerstone of India's banking sector renowned for its innovation and customer-centric approach. Established in 1994, HDFC Bank has ascended to become one of India's largest private sector banks, epitomizing operational excellence and financial prudence. The study underscores the importance of analyzing financial performance in the dynamic banking landscape, serving as a linchpin for strategic decision-making, risk management, and stakeholder engagement. Through a comprehensive analysis of HDFC Bank's financial metrics, the study aims to unravel underlying performance drivers, elucidate emerging trends, and delineate strategic imperatives for future growth and value creation. Methodologically, the study employs a structured approach encompassing primary and secondary data sources, financial ratio analysis, qualitative assessments, and interpretive synthesis. Primary data sources include HDFC Bank's annual reports and regulatory filings, while secondary sources encompass scholarly literature and industry reports. Financial ratio analysis encompasses liquidity, profitability, efficiency, and asset quality metrics, providing multifaceted insights into HDFC Bank's performance dynamics. Interpreting key financial ratios offers valuable insights into HDFC Bank's performance trends. Notably, the bank demonstrates robust profitability metrics, operational efficiency improvements, and healthy asset quality. However, challenges such as declining CASA ratio and net interest margin warrant strategic attention. The study offers actionable suggestions for HDFC Bank to enhance its financial performance. Strategies include optimizing capital utilization, diversifying revenue streams, strengthening asset quality, improving cost efficiency, fostering strategic partnerships, and prioritizing customer-centricity and risk management. In conclusion, HDFC Bank's financial performance underscores its resilience, innovation, and commitment to stakeholder value creation. By leveraging insights from this study and adopting strategic initiatives, HDFC Bank can navigate challenges, capitalize on opportunities, and sustain its position as a leading player in the dynamic banking landscape.

Pengaruh Variabel Keuangan dan Regulasi terhadap Harga Saham Perbankan di Indonesia: Studi Kasus pada Perbankan Indonesia

One user of financial reporting information is investors. An investor's main interest in a company's financial statements is to find out how profitable the company is from the perspective of capital investment in the company. One way to get more accurate information is to carry out financial ratio analysis. The data analysis used in this research is descriptive analysis and multiple regression analysis. This calculation uses statistical methods supported by the SPSS for Windows program to measure the impact of a bank's financial performance on its share price. 61.00% of the variation in all independent variables (CAR, RORA, NPM, ROA, and LDR) can explain the dependent variable (share price). The remaining 39.00% is explained by other variables not proposed in this research.

Pengaruh Islamicity Performance Index Terkait Nilai Perusahaan dengan Konsep Maqashid As-Syariah

The Islamicity Performance Index is a performance measurement tool that is able to reveal the materialistic and spiritual values ​​that exist in sharia companies. Performance measurement using the Islamicity Performance Index is only based on information available in the annual financial reports. This index refers to Profit Sharing Ratio, Zakat Performance Ratio, Equitable Ratio, Director Employess Welfare Ratio, Islamic investment vs non-Islamic investment, Islamic income vs non-Islamic income and AAOFI index. The results of this study indicate that Islamic financial performance (Islamicity Performance Index) is able to significantly and positively influence company value as measured using the concept of Maqashid as-Syariah. So that if the Islamic financial performance (Islamicity Performance Index) in the ranking is considered UNSATISFACTORY, it will have an impact on company value in the Maqashid as-Syariah concept which also tends to get a bad rating in the eyes of investors. And vice versa, if the rating is considered SATISFACTORY, then the value of the company will tend to get a good assessment and added value in the eyes of investors. Firm size is able to negatively moderate (weaken) the relationship of the Islamicity Performance Index to firm value in Islamic Commercial Bank companies. The results that occurred in this study could also be caused by macroeconomic factors that greatly affect the performance of Islamic banking in Indonesia with an increase in inflation which has a negative impact on Islamic banking financial performance (ROA).
 Keywords: Islamicity Performance Index; syariah companies; Maqashid as-Syariah

Financial Technology on Banking Financial Performance with Audit Quality as Moderating Variable

The purpose of this study is to determine the effect of fintech on banking financial performances as seen from profitability and liquidity risk with audit quality as moderating variable. The urgency of this research is due to the inconsistency of results in testing the effect of fintech on banking financial performance. In addition, this study also considers the audit quality variable as moderating variable to see whether the audit quality can stengthen or weaken the effect of fintech on banking financial performance. This research is descriptive research with quantitative approach. The population used in this study were all banking companies listed on the IDX for the 2020-2022 period. The study’s samples, which were chosen using the purposive sampling technique, include banks that periodically released yearly financial reports throughout the research period and have used fintech services such phone, SMS, and internet banking. Managing data using Eviews 12. The findings demonstrated that financial technology significantly affects LDR and ROA. However, as a moderating variable, the audit quality variable has no discernible effect on ROA or LDR.

Impact of Macroeconomic Factors on Bank Financial Performance: A Turkey and Kosovo Comparative Study

Impact of Macroeconomic Factors on Bank Financial Performance: A Turkey and Kosovo Comparative Study