Bank Managers Research Articles

Do banks engage in earnings management? The role of dividends and institutional factors

We investigate the impact of dividend policy on earnings quality and opportunistic earnings management for individual banks across 45 developed and developing countries between 1996 and 2019. Our estimates show that high dividend payments reduce earnings management, hence mitigate agency problems. This mitigation is especially prevalent among well-capitalised and non-listed banks. Greater investor protection and government regulation appear to strengthen the negative association between dividend policy and earnings management. Our results hold robustly across many different specifications.

Effect of Bank Size on Earnings Retention for Investment by Commercial Banks in Kenya

The Kenyan economy has continued to register dismal performances in the last few years and banks can play a facilitative function because of their intermediary role. The study sought to find out if the size of a commercial bank has any influence on its level of earnings retention for investment. The retention of earnings by a bank each financial year can have critical importance because it provides a source of funds for investment. The findings of the study are helpful to the management of commercial banks in education to shareholders. The study was anchored on the pecking order theory. The bank size parameters were cash at Central Bank of Kenya and property assets, net borrowed funds, investor funds, and the paid dividend. Though the total banks' population was 39, the study involved 36 banks as units of analysis. To test the impact of size on earnings retention in commercial banks in Kenya, a linear regression model was run. Analysis of the data revealed that 83 % of banks’ earnings retention is influenced by cash at CBK and property assets, net borrowed funds, investor funds, and paid dividends. The results pointed out that, cash at CBK and Property assets, net borrowed funds, and investors’ funds have a positive significant impact on earnings retention while paid dividends have an insignificant impact on earnings retention. Any commercial bank intending to expand its operations by use of retained earnings should work towards increasing variables with significant positive influence or decreasing the parameters with significant negative influence. By this, the commercial banks in Kenya will maximize utilization of the cheapest source of funds for investment and this will also lead to increased earnings due to reduced expenses related to capital acquirement from other sources.

Risk Assessment of Banks When Interest Rate Hikes

Interest rates play a crucial role in the risk management of banks. When central banks raise interest rates to curb inflation or an overheated economy, the risk profile of banks can alter significantly. This paper explores the risks banks face and their assessment methods in a rising interest rate environment, focusing on SVB and Credit Suisse as case studies. It identifies key risks such as liquidity risk, credit risk, market risk, and systemic risk by examining the impact of increasing interest rates on banks' balance sheets, earnings, and capital positions. The research concludes that Asset-Liability Management (ALM) modeling, stress testing, and hedging strategies are effective tools for banks to manage these risks. A thorough literature review underscores the importance of these strategies in ensuring banks' stability and performance amidst rising interest rates. The paper highlights that proper risk management practices are essential for banks to navigate the challenges posed by changing interest rates and to maintain their financial health and operational stability in such an environment.

Liquidity Risk Mediation in the Dynamics of Capital Structure and Financial Performance: Evidence from Jordanian Banks

Maximising financial performance while maintaining adequate liquidity is a crucial and ongoing challenge for bank management, particularly in emerging markets. This study focuses on the relationship between capital structure and financial performance in Jordanian banks, with the mediating role of liquidity risk. Using panel data from 13 central Jordanian banks over the 2015–2022 period, we employ structural equation modelling (SEM) to analyse how capital structure ratios (equity-to-asset, debt-to-loan, and deposit-to-asset) influence financial performance metrics (return on assets and net income-to-expenditure ratio). Our findings reveal a significant positive association between capital structure and financial performance. However, liquidity risk fully mediates this effect. Capital structure primarily impacts performance by influencing a bank’s liquidity risk profile. Furthermore, the strength of this mediating effect is noteworthy—capital structure exhibits a statistically more robust association with liquidity risk than its direct impact on performance. This highlights the crucial role of managing liquidity risk within the complex dynamics of bank operations. This research makes a significant contribution to the existing literature by demonstrating the positive impact of capital structure on performance using the underlying mechanism through which this effect occurs. The insights of this research provide several implications for practice in the context of banking industries.

Measuring of Digital Banking Service Quality on Customer Satisfaction with Reference to Bengaluru

Purpose: The study aims at adding to the existing knowledge of how service quality of Digital Banking has an influence on customer satisfaction of Banks in a Metropolitan City like Bengaluru. This will help Banks and policy makers to understand the internet banking dimension and its contribution to customer satisfaction. With the increased usage of Online banking services in India post COVID. India has emerged as the largest user of Online Payment system, there is an increased need to study the service quality of Digital Banking facility. Design and Methodology: An exploratory survey was conducted with the help of Likert Scale Questionnaire conducted to investigate the impact of Digital Banking service quality on customer satisfaction in Bengaluru. Convenience sampling was used, and various kinds of Digital banking customers were approached in Bengaluru. Data was collected from a sample of 216DigitalBanking customers. Descriptive statistics, correlation, confirmatory factors analysis are used to analyze the data Findings: The findings suggest that there is a noteworthy correlation between the characteristics of online banking service quality and the level of customer satisfaction among internet banking users. Customer satisfaction in online banking is attributed to each of the following dimensions: efficiency, system availability, fulfillment, privacy, contact, responsiveness, and contact. Implication of the Study: The Research will help bank Managers, policy makers to focus on these factors which have a great impact on satisfying the customers which will result in better service quality of Digital Banking services which ensure greater usage of banking services and prosperity resulting in greater number of transactions benefiting the economy.

The Moderation Effect of Islamic Corporate Governance on Fraud Financial Statement Detection Using Fraud Hexagon

Purpose: Given that Islamic corporate governance serves as a moderating variable, this study aims to examine the impact of the hexagon theory on fraudulent financial statements.Method: This study employed a quantitative methodology and garnered secondary data on Islamic commercial banks in Southeast Asia. Purposive sampling was carried out to collect data from 18 companies during five years (2017–2022), yielding 90 observations. The data analysis method employed Warp-PLS software version 8.0 and partial least square structural equation modeling (PLS-SEM).Findings: Study results demonstrate that financial stability significantly worsens the performance of fraudulent financial statements. Related party transactions, external auditors, director changes, C.E.O. education, company existence, and political connections did not affect governance, moderate the significant positive influence of financial stability, related party transactions, company existence, and political connections on fraudulent financial statements. Meanwhile, good oversight, external auditors, director changes, and C.E.O. education did not moderate the impact of misleading financial statements.Originality/Value: This research contributites significantly to the Islamic banking management. The Islamic corporate governance mechanism forms the process and structure of the entity’s supervisory, monitoring and advisory functions. The presentation of financial statements is carried out in an accountable and transparent manner based on Sharia principles, which can reduce the practice of financial statement fraud, so stakeholders will be more confident in investing.

Does Mediation Matter in Explaining the Relationship between ESG and Bank Financial Performance? A Scoping Review

This study identifies and synthesizes patterns and trends in the emerging body of literature of environmental, social, and corporate governance (ESG) endeavors on the financial performance (FP) of the banking firms. It specifically aims to highlight the relationship of ESG–FP. The scoping review analysis is based on 1856 journal articles from two online databases, namely Scopus and Web of Science (WoS) for the period of 2015 to 2023. The analysis reveals inconsistent results regarding the ESG–FP relationship, with some studies reporting positive impacts, others negative, and several showing no significant relationship. Notably, non-linear studies consistently identify an inverted U-shaped relationship, suggesting that there is a threshold level of ESG investment beyond which additional investments do not yield proportional benefits. This indicates that threshold-based policies may be more effective at maximizing ESG benefits. The study also found that numerous studies suggested exploring the indirect effect or mediating variables in the ESG–FP relationship to better explain the FP variance. Thus, the study identifies a need for future research to explore indirect relationships by testing potential moderators or mediators, particularly bank risk-taking, to better understand the ESG–FP dynamics. Policymakers and regulators should adopt non-linear analytical approaches and set threshold-based ESG investment policies, while bank management should strategically invest in ESG activities, integrating ESG considerations into risk management frameworks. Continuous monitoring and evaluation, along with stakeholder engagement, are crucial for optimizing ESG investments. By adopting these strategies, banks can enhance financial performance and contribute to sustainable and responsible banking practices.

Comparative Analysis of Profitability between Public and Private Sector Banks in India: A Study of SBI, Syndicate Bank ICICI Bank, and HDFC Bank

This study provides a comprehensive comparative analysis of profitability between public sector banks and private sector banks in India, focusing on four prominent institutions: State Bank of India (SBI), ICICI Bank, HDFC Bank, and Syndicate Bank. By examining key financial metrics such as Return on Assets (ROA), Return on Equity (ROE), Net Interest Margin (NIM), and Cost-to-Income Ratio, this research aims to elucidate the differences in profitability and operational efficiency between these banks. The analysis draws on secondary data from various financial sources, employing descriptive statistics, graphical representations, and ratio analysis to highlight trends and performance disparities. The study reveals that while public sector banks like SBI and Syndicate Bank exhibit substantial growth in total assets and deposits, private sector banks, particularly ICICI and HDFC, demonstrate superior profitability and cost efficiency. The findings underscore the impact of management practices, technological advancements, and macroeconomic conditions on bank performance. This research provides valuable insights for investors, regulators, and bank management, contributing to a deeper understanding of the factors driving profitability in the Indian banking sector.

The impact of innovative leadership and total quality management in 21st-century banking: an empirical insight and foresight

Purpose The purpose of this paper is to examine how innovative leadership (INL) drives innovation performance (INP) in banks. Design/methodology/approach This study develops and investigates a research model by assessing the viewpoints of 260 chief executive officers (CEOs) from the branches of 21 quality-certified banks, leveraging the Smart partial least squares technique. Findings INL had a positive and significant impact on INP. Total quality management (TQM) partially and significantly mediated the association between INL and INP. Technological turbulence, government regulation (GOV), market dynamism (MKD) and industry competitiveness (CMP) positively and significantly moderated the INL–TQM association. Research limitations/implications INP causal linkages and variations may be better understood with longitudinal investigations, hence the need for further studies in this area. External influences may affect industries or contexts differently, requiring further research into various industries. Practical implications In an industry with fast-paced and ever-changing industrial technology, strict government laws, a higher level of MKD and increased competition, firms must hire or groom innovative CEOs to promote the adoption of new and creative quality enhancement strategies that meet clients’ short- and long-term needs. Originality/value To the best of the authors’ knowledge, this paper is the first to show how TQM can serve as a pathway for innovative leaders to follow. It is an inaugural attempt to explain the specific environmental dynamics that are necessary for the INL–TQM association to thrive.

Environmental Communication Strategy of Food Bank Aksata Pangan in Organizational Image Development to Reduce the Food Waste in Medan

This study aims to analyze the Environmental Communication Strategy of Aksata Pangan Food Bank Managers in Developing Organizational Image to Reduce Food Waste in Medan City, Obstacles experienced and how to overcome the obstacles experienced. The theory used in this study is the theory of Environmental Communication Strategy Flor & Cangara (2018). The paradigm used in this study is constructivism with the object of research being Aksata Pangan Food Bank Managers and the subject of the study is environmental communication strategy. Five (5) research informants produced saturated data and three (3) triangulation informants. Data collection techniques through in-depth interviews and observations. The results of this study found that Aksata Pangan Food Bank succeeded in identifying the main problems related to environmental communication needs through social media monitoring and news analysis. Aksata Pangan focuses on using Instagram as the main platform to reach generation Z and millennials with educational messages about environmental issues such as food waste. This effort has helped increase public understanding of environmental issues and the importance of reducing food waste, which has a positive impact on the image of the organization

Impact of Non-Performing Loan on Profitability of Nepalese Commercial Banks

This paper aims to evaluate the impact of non-performing loan on the profitability of Nepalese commercial banks. For this purpose, this study employed the annual balanced panel data of 10 commercial banks during the period of 2016/17 to 2022/23. This paper used NPLs measured by the ratio of non-performing loans to total loans as an explanatory variable and profitability measured by ROA as a dependent variable. A multiple linear regression model was used to examine the effect of NPLs on the profitability of banks. The empirical results indicated that NPLs play a substantial role in determining profitability. Further, this paper revealed that NPLs have a significant negative impact on profitability. The findings of this paper suggests that bank management should maintain the lower level of NPLs as much as possible to achieve a higher level of profitability. Therefore, bank management should give more attention to minimize the NPL.

PENGARUH OPASITAS BANK TERHADAP TINGKAT PERTUMBUHAN KREDIT DI MODERASI OLEH VARIABEL KAPITALISASI BANK, WHOLESALE FUNDING, MACROECONOMY CONDITION, DAN KUALITAS KREDIT (Studi Empiris pada Bank Umum Konvensional yang terdaftar di BEI 2018-2022)

This study aims to investigate the effect of bank opacity on loan growth rates by considering the role of bank capitalization variables, wholesale funding, macroeconomic conditions, and credit quality as moderating factors. The empirical study was conducted on Conventional Commercial Banks listed on the Indonesia Stock Exchange (IDX) during the period 2018-2022. The research method uses multiple regression analysis and moderation techniques by utilizing financial and macroeconomic data sourced from bank financial reports in Indonesia. The results of this analysis can provide insight into the impact of bank opacity on loan growth, while explaining the extent to which the variables of bank capitalization, wholesale funding, macroeconomic conditions, and credit quality moderate the relationship. The findings of this study are expected to contribute to the understanding of the factors that influence credit growth in the banking sector, particularly in the context of bank opacity. The practical implications of this study can help regulators, bank management, and other stakeholders to develop appropriate policies to improve the stability and growth of the banking sector. Keywords: bank opacity, loan growth, bank capitalization, wholesale funding, macroeconomic conditions, credit quality.

Contemporary Management Accounting System Practices and Managerial Performance of Nepalese Commercial Banks

Contemporary management accounting systems provide managers with the necessary organizational performance in commercial banks. The study examines the adoption and influence of contemporary management accounting system practices (CMASPs) on managerial performance within commercial banks in Kathmandu Valley, Nepal. The study treats costing, budgeting, strategic analysis, decision-support information, and performance measurement as independent variables, with managerial performance as the dependent variable. Employing descriptive and causal-comparative research designs alongside convenience sampling, the study gathered primary data from selected twenty Nepalese commercial bank branch managers and deputy managers using structured survey questionnaires rated on a 5-point Likert scale. Analysis encompassed descriptive statistics, and inferential statistics including mean, standard deviation, skewness, kurtosis, and structural equation modeling (SEM) via Path Analysis. The study reveals that CMASPs function effectively, positively affecting managerial performance. These findings highlight the significance of CMASPs in achieving superior managerial performance within Nepal's commercial banking industry, offering actionable insights for bank managers and policymakers aiming to optimize performance through effective CMASPs. Future research directions could explore these management accounting system practices across different sectors and investigate advanced MAS practices and technological integration.

The impact of liquidity on bank lending: Case of Tunisia

Liquidity is the risk to a bank's earnings and capital arising from its inability to timely meet obligations when they come due without incurring unacceptable losses. Bank management must ensure that sufficient funds are available at a reasonable cost to meet potential demands from both fund providers and borrowers. Also, Lending is the process by which a financial institution provides funds to a borrower. Often called a lender, the institution typically receives interest in return for the loan. Lending in banking benefits lenders and borrowers alike by increasing liquidity within the marketplaces where loans are originated and used. This article aims to identify the impact of liquidity on bank lending. We used a sample of 12 banks in Tunisia over the period (2005….2022). By employing a method of panel static we found that liquidity has a significant impact on bank lending.

Potensi Perbankan Syariah di Indonesia Dalam Pola Dasar Manajemen dan Dana Pihak Ketiga

This article aims to examine the potential of sharia banking in Indonesia in terms of basic management patterns and third party funds. The method used in this research is the library research. The research results explain that sharia bank management is reflected in the annual financial report published by the OJK and contains the Third Party Funds of the sharia bank concerned. The potential for sharia banking in Indonesia shows a positive value, this is reflected in the total assets as of January 2023 owned by Sharia Commercial Banks and Sharia Business Units reaching IDR 765.36 trillion. This is also supported by an increase in Third Party Funds by 12% which is able to make BSI one of the largest sharia banks in Indonesia in the position of the sixth largest bank in Indonesia and the fourteenth position of the largest sharia bank in the world with Third Party Funds of 261. 49 Trillion

The Development of Waste Bank Management to Improve Household Income in Surakarta City

Establishing a waste bank in Surakarta City is not only intended to manage household waste The waste bank can also serve to improve the community's economy. Since 2014, the Surakarta City Environmental Services (DLH) has been promoting the formation of waste banks. There were 123 waste banks recorded in Surakarta City until 2020; in 2021, only 70 remained. Furthermore, not all waste banks can run well. Therefore, this study examines how to develop waste bank management to improve household income in Surakarta City. This study used a descriptive method and Miles and Huberman analysis using 120 waste bank customers and 13 managers as respondents. The result showed that the waste bank contribution to the household income was IDR 26,461/month, which means that some aspects need improvements, such as human capacity, infrastructure and facilities, time management, economic incentives, and the program itself. This study provides recommendations on how to maintain and increase waste bank activities to enhance household welfare and environmental quality.

Capital expenditure, tax avoidance and bank performance: Evidence from Jordanian banks

Tax avoidance and capital expenditure are critical financial strategies employed by banks to enhance profitability. Understanding their impact on bank financial performance is essential for policymakers and bank managers seeking to optimize financial strategies. This study is aimed to investigate the influence of tax avoidance (TAV) and capital expenditure on the financial performance of Jordanian banks, while exploring the moderating effect of firm size. Using regression analysis, the relationships between tax avoidance, capital expenditure, bank size, and bank financial performance were investigated. Financial data from Jordanian banks were utilized over a specified period. The study results refer that tax avoidance has a positive correlation with ROA (the correlation = 31.7%) and ROE (the correlation = 30.2%). The results reveal that tax avoidance significantly impacts bank financial performance, with banks employing tax avoidance strategies exhibiting higher returns on assets and equity. However, capital expenditure does not demonstrate a significant association with bank financial performance. Additionally, firm size does not moderate the link between TAV, capital expenditure, and bank financial performance. The non-significant impact of capital expenditure underscores the need for banks to explore alternative avenues for improving financial performance. These findings provide a valuable insight for policymakers and bank managers in devising effective financial strategies to optimize bank performance in the Jordanian context.

Financial Performance of Bank NTB Syariah: Before and After Becoming an Islamic Commercial Bank

This study evaluates the financial performance of Bank NTB Syariah before and after its conversion into an Islamic Commercial Bank (BUS) in 2018. The conversion aimed to foster more equitable economic growth and improve the overall status of the NTB community. Utilizing Financial Ratio Analysis (FRA), this research examines various financial ratios, including ROA, ROE, NIM, NPF, BOPO, FAR, FDR, ELR, EAR, CAR, DER, and DAR, to assess performance differences pre- and post-conversion. The findings indicate significant improvements in key financial indicators such as ROA, ROE, NIM, NPF Net, and BOPO after the conversion, demonstrating enhanced profitability and efficiency. However, there were no notable changes in the ratios of FAR, FDR, ELR, EAR, CAR, DER, DAR, and NPF Gross, suggesting stability in these areas. This comprehensive analysis highlights the positive impact of the conversion on Bank NTB Syariah's financial performance and provides valuable insights for investors, bank managers, and policymakers regarding the benefits of converting to an Islamic Commercial Bank. The study's findings underscore the importance of strategic structural changes in enhancing the financial health and operational efficiency of financial institutions.

Sorting waste saving gold: CSR innovation The Gade Clean and Gold PT Pegadaian Cirebon Area

The Gade Clean and Gold program is a CSR program from the central Pegadain which aims to develop gold savings that specialize in each area to find waste banks in their respective regions to collaborate with and are committed to taking part in overcoming waste problems in Indonesia through waste management. Cirebon City is part of the PT (Perseudota Indonesia) The Gaga Clean And Gold program, aiming to address its significant waste problem. The purpose of this research is to explain the management of The Gage Clean and Silver program. The data is divided into primary, obtained through interviews with Public Relations and Marketing Executive employees of PT, and secondary, sourced from literature such as books, journals, and newspapers. The researchers used qualitative approach with descriptive qualitative method. The results of the research are as follows. Firstly, PT has planned The GAGE program to find information on the best waste bank information with the Financial Services Authority (OJK), approach by gathering waste bank managers and the community, budget management for waste bank infrastructure. Secondly, it motivates stakeholders by forming company awareness by providing injections of funds to waste banks to improve infrastructure facilities in the form of creating waste bank parks, renovating waste bank warehouses and providing gowes cars for waste transportation activities made by PT. Finally, the suggestions that can be given by researchers through the results of research on the management and management of the Gade clean and gold program are as following.

Financial Risk Management In Banking: A Key Mediator In Bank Competition And Liquidity Creation

Financial Risk Management In Banking: A Key Mediator In Bank Competition And Liquidity Creation