Management Of Commercial Banks Research Articles

Technology Infrastructure and Business Performance of Commercial Banks in Kenya

The general objective of the study was to examine the role of technology infrastructureon business performance of Commercial Banks in Kenya. The philosophy that guided the research is positivism philosophy. The study adopted correlational research design. The target population was commercial Banks in Kenya register by the Central Bank of Kenya. The population consisted of all 42 commercial banks in Kenya. Respondents’ population comprised of five top managers from each bank translating to 210 top managers. Slovin’s formula was used to calculate the sample size. Purposive sampling technique was used to select 138 top managers of the 42 commercial Banks in Kenya. This study used a self-administered, closed and open-ended questionnaire to obtain primary data. A pilot study was conducted to test the validity and reliability of the data collection instrument. Quantitative data was collected and analyzed in this study by calculating the response rate with descriptive statistics such as mean, standard deviation, median and proportions using the Statistical Package for Social Sciences (SPSS) version 24). Regression analysis and correlation analysis was used to carry out inferential data analysis to determine the direction and strength of the relationship between the independent and the dependent variables. In order to test the influence of information technology capability on business performance of Commercial Banks in Kenya, the study employed a hierarchical regression analysis with moderation. The study results were presented through use of tables and figures. The study concludes that technology infrastructure has a positive and significant effect on business performance of Commercial Banks in Kenya. The study revealed that hardware/Software, network and database influence business performance of Commercial Banks in Kenya. This implies that improvement in information technology infrastructure (hardware/Software, network and database) would lead to improvement in business performance of Commercial Banks in Kenya. The study recommends that the management of commercial banks in Kenya should ensure they had adequate and up to date hardware/Software to enable their employees improve their productivity.

Technology Processes and Business Performance of Commercial Banks in Kenya

The general objective of the study was to examine the role of Technology Processes on business performance of Commercial Banks in Kenya. The philosophy that guided the research is positivism philosophy. The study adopted correlational research design. The target population was commercial Banks in Kenya register by the Central Bank of Kenya. The population consisted of all 42 commercial banks in Kenya. Respondents’ population comprised of five top managers from each bank translating to 210 top managers. Slovin’s formula was used to calculate the sample size. Purposive sampling technique was used to select 138 top managers of the 42 commercial Banks in Kenya. This study used a self-administered, closed and open-ended questionnaire to obtain primary data. A pilot study was conducted to test the validity and reliability of the data collection instrument. Quantitative data was collected and analyzed in this study by calculating the response rate with descriptive statistics such as mean, standard deviation, median and proportions using the Statistical Package for Social Sciences (SPSS) version 24). Regression analysis and correlation analysis was used to carry out inferential data analysis to determine the direction and strength of the relationship between the independent and the dependent variables. In order to test the influence of information technology capability on business performance of Commercial Banks in Kenya, the study employed a hierarchical regression analysis with moderation. The study results were presented through use of tables and figures. The study concludes that technology processes has a positive and significant effect on business performance of Commercial Banks in Kenya. The study revealed that idea generation, technology acquisition and technology Implementation influence business performance of Commercial Banks in Kenya. This implies that improvement in information technology processes (idea generation, technology acquisition and technology Implementation) would lead to improvement in business performance of Commercial Banks in Kenya. Based on the findings, the study recommends that the management of commercial banks in Kenya should ensure they have in place an effective plan for idea generation, technology acquisition and technology Implementation.

Threshold Effect of Non-Interest Income Disaggregates on Commercial Banks’ Financial Performance in Zimbabwe

Financial performance has become a trending concept in corporate finance and strategic management in recent times especially in the aftermath of the Global Financial Crisis (GFC) of 2007–2009. As an antidote to charter value erosion caused by stiff competition from incumbents in traditional banking activities, banks venture into non-core banking activities as a diversification and survival strategy. The purpose of the study is to determine the optimal threshold levels of non-interest income that stimulate financial performance of ten Zimbabwean commercial banks using non-interest income disaggregates over 2009 – 2020. Unfortunately, studies that examine the non-interest-income-financial performance nexus of banks involved in intermediation are scant and inconclusive. Furthermore, the use of threshold models to crack this puzzle are conspicuous. The study employed Fully Modified Ordinary Least Squares and Threshold difference Generalised Methods of Moment nonlinear threshold approaches. The aggregated and disentangled non-interest income dynamic optimal thresholds found are 26%, 17% and 10% whereas the average static ones are 35%, 28% and 17%. Compared to aggregated non-interest income, the study reveals that the disaggregates pose a greater positive impact on financial performance of banks in the upper regime than their counterparts in the lower regime. In addition, more banks were found to be operating below the required minimum thresholds. To avert episodes of bank failures and hedging against banking sector fragility, commercial bank managers should come up with well-diversified portfolios of income-generating ventures. Also, central bank regulations must promote non-interest activities, competition, growth and reduce leverage of commercial banks.

A Study on Risk Management and Performance Analysis of Commercial Banks in India: (Application of Camel Model)

There are various financial tools and techniques to measure the performance of the banks, one of the most important one being the CAMEL model which lays emphasis on all the aspects of the performance measurement. The present study analyses the performance of selected nationalized banks in India.

Effects of green HRM practices on circular economy-based performance of banking organizations in an emerging nation

The concept of circular economy-based performance has gained significant interest within the highly competitive business arena and environment-concerned stakeholders. This study assumes that environment oriented HRM practices have significant effects on circular economy-based performance. This study aims to investigate the contributory effect of five selected components of green HRM on the circular economy-based performance of environment-concerned banking organizations. A total of 418 managers of commercial banks are the unit of analysis, and data were derived using a structured questionnaire from the respondents who are working in managerial positions in banking organizations in Bangladesh. The gathered data has been encoded by SPSS and analyzed through PLS-SEM 4. The results of this study reveal that all components of green HRM, i.e., green employment design, planning, staffing, training, and benefits significantly contribute to the circular economy-based performance of the banking sector. Thus, green HRM effectively promotes the circular performance of banks to provide a distinctive perspective for adding value to the environmental concerns in an emerging economy. AcknowledgmentThe authors appreciate the support in preparing the article provided by the University of Debrecen Program for Scientific Publication.

Risk Management of Commercial Banks under Interest Rate Marketisation

Risk Management of Commercial Banks under Interest Rate Marketisation

Factors affecting operational risk management of Vietnam commercial banks in Dong Nai province

Operational risk management and supervision are essential as a bank's reliable shield to prevent violations of banking risk management principles. Using the convenient sampling method, the authors surveyed 336 valid answer sheets, corresponding to 350 managers and staff working at Vietnam commercial banks in Dong Nai province. Research results show that there are 5 factors affecting operational risk management with a significance level of 5%, with an adjusted R2 coefficient of 0.604, which means that the built multiple linear regression model. The fit for the data set is 60.4%, meaning the model explains 60.4% of the variation in operational risk management due to 5 impact factors. Finally, the authors propose five policy implications that contribute to improving operational risk management, corresponding to the five factors in order of priority: Operational risk management related to organizational structure the highest standardized regression coefficient of 0.468, and the leadership perspective on operational risk management with the lowest standardized regression coefficient of 0.159.

Research on Credit Risk Measurement and Management of Commercial Banks in China

This comprehensive study explores the sophisticated landscape of credit risk measurement and management within the commercial banking sector of China, a critical component in maintaining the resilience and stability of its burgeoning financial system. As China's economy continues to integrate with the global market, its banking sector faces escalating credit risk challenges, necessitating advanced and effective management strategies. This paper critically examines the existing methodologies for measuring credit risk, including both traditional approaches and modern innovations that leverage big data and artificial intelligence, assessing their applicability and efficiency in the Chinese context. Moreover, we delve into the multifaceted strategies employed by Chinese commercial banks to manage credit risk, focusing on the integration of regulatory frameworks, technological advancements, and best practices in risk management. Through a methodical review of literature and case studies of prominent Chinese banks, this study identifies key trends, challenges, and opportunities in credit risk management. We evaluate the effectiveness of current practices and propose a set of strategic recommendations aimed at enhancing the robustness of credit risk management systems. These include adopting a more holistic approach to risk assessment, leveraging technology to predict and mitigate risk, and fostering a culture of risk awareness and compliance.

Banking Risk Management: Assessment of Existing Company Practices

Main problem is that banking is one of the most important sectors of the economy all over the world. Being high-tech, it is most susceptible to ongoing changes, both at the macro and micro levels. As practice shows, such changes are associated with the increasing internationalization of credit institutions and markets, improvement of banking legislation and modern computer technologies, increased competition, and the emergence of new banking products and services in financial markets. The relevance of the topic of the master's thesis is that in order to ensure the effective functioning of a commercial bank, it is necessary to form, use and integrate into the bank's management structure mechanisms for effective protection against the negative impact of uncertainties arising in the course of banking activities. Such a mechanism is banking risk management. Purpose of this article is to study the existing problems of the effectiveness of bank risk management and develop practical recommendations for its improvement. Methods: The methodological basis of the work is the general scientific methods of comparative-systemic, structural-level, dialectical, vertical and horizontal analysis, qualitative and quantitative approaches and analytical techniques. In substantiating the theoretical provisions of the conclusions and recommendations, economic, statistical and empirical methods of cognition were used. Results and their significance: The theoretical and practical significance of the study lies in the development of theoretical provisions of a comprehensive analysis of banking risk management, as well as in the possibility of using the developed conclusions and recommendations in the practical activities of commercial banks. The analysis of the state and assessment of the effectiveness of risk management of commercial banks was carried out, the analysis of the features of the mechanism of functioning of risk management was carried out.

Accounting data governance and its influence on financial report quality: Insights from commercial banks

This study aimed to measure the impact of implementing mechanisms of accounting data governance, represented by International Accounting Standards, internal auditing, external auditing, audit committees, disclosure and transparency, and performance evaluation, on the quality of financial reporting data for the commercial banks listed on the Amman Stock Exchange, totaling (15) banks. To achieve the objectives of this study, a descriptive-analytical approach was adopted by developing a questionnaire to collect the primary data measuring the study variables. The questionnaire was distributed to employees in the financial and control departments of these banks, with a total of (375) respondents from the total study population of (733) individuals. Appropriate statistical methods were used to analyze the data, test hypotheses, and the results of this study revealed a strong positive impact of five variables of accounting data governance mechanisms on achieving the quality of financial reporting data. These variables are ranked from highest to lowest in terms of the strength of impact and correlation with the quality of financial reports: disclosure and transparency, external auditing, International Accounting Standards, internal auditing, and audit committees. However, there was no impact of the performance evaluation governance variable on achieving the quality of financial reporting data. These results call on the management of commercial banks in the study to commit to the objective implementation of the requirements of accounting data governance mechanisms as stipulated by international professional assemblies.

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.

Strategy Implementation Model for Commercial Banks in a Developing Economy: A Resource-Capability Approach

Extensive research in strategic management has shown that more than half of the business strategies fail to accomplish their intended objectives due to problems with strategy implementation. However, in comparison to strategy formulation, strategy implementation has received insufficient attention both at the theoretical and empirical levels. The objective of the study was to develop a comprehensive model that augments the effectiveness of strategy implementation in the context of a developing economy. A sample of 229 top and middle-level managers of commercial banks was chosen to collect quantitative data, and around 187 (82%) questionnaires were returned. The quantitative data analysis was carried out using structural equation modelling. By operationalizing strategy implementation capability as a second-order reflective-formative construct, the study established an empirically informed strategy implementation model that entails three components, namely, critical strategy implementation-related resources, key elements of strategy implementation capability and strategy implementation performance. The study contributes to the existing knowledge on strategy implementation by expanding the extant strategy implementation frameworks/models to a broad-based and integrative model.

Commercial Bank Loan Risk and Prevention

Under the environment of China's market economy, the healthy and stable development of commercial banks is an important guarantee for the healthy operation of the social and economic system. As an important part of the financial management system, credit management of commercial banks is not only related to the sound development of commercial banks, but also has a direct impact on the stability of the whole society. At the same time, risk factors in financial activities are always following, and if there is no reasonable avoidance and prevention of financial risks, it will affect and threaten the survival of financial institutions. In such a situation, commercial banks should attach great importance to the prevention and control of loan risks, establish reasonable control strategies based on the actual situation, optimize the risk management system, continuously improve the level of risk management and control, ensure that the healthy operation of the financial system has good depth and breadth, and lay a solid foundation for the sustainable development of commercial banks. This paper discusses the risk and prevention of commercial bank loans from the aspects of the concept and characteristics of commercial bank loan risk, the current problems in the risk management and control of commercial bank loans, and the countermeasures to the risk management and control of commercial bank loans, so as to provide reference for promoting the healthy development of the financial industry and standardizing the management of financial enterprises.

A metrics-driven approach for customer experience management evaluation: the case of commercial banks in developing countries

PurposeCustomer experience management (CXM), which aims to achieve and maintain customers' long-term loyalty, has attracted the attention of many organizations. Improving customer experience management in organizations requires that, first, their relevant capabilities be evaluated. The present study aimed to offer a set of key performance indicators for evaluating customer experience management in commercial banks.Design/methodology/approachThe study, first, attempted to identify the components of evaluating customer experience management by reviewing the related literature and conducting interviews with experts. Then, the extracted components were transformed into assessable metrics using the goal question metric method, and the key performance indicators relevant to customer experience management in commercial banks were selected according to the experts' opinions and the Fuzzy Delphi method. FindingsAccording to the findings of the study, 21 key performance indicators were identified for customer experience management in commercial banks, and customer satisfaction, the mean number of calls to resolve an issue in customer journey touchpoints, the NPS, and the ratio of the budget allocated to the CXM department to the budget of the marketing department were found as the most significant performance indicator according to banking experts.Originality/valueThe present study was among the first research projects intended to evaluate CXM and offer key performance indicators that could help the managers of commercial banks assess the maturity levels of their CXM.

Green Finance and Low-carbon Sustainable Development -- from the Perspective of Commercial Bank Management

Low-carbon and green development is an significant part of sustainable development. In the context of sustainable development, commercial banks, as a major social body, have derived a variety of financial products by strengthening green management. According to the Organization for Economic Cooperation and Development (OECD), green finance is a service that reduces pollution and greenhouse gas emissions in environmental protection, improves the efficiency of natural resource utilization and reduces resource waste while achieving economic growth. Green finance is a business activity corresponding to commercial banks and a concrete manifestation of green development in the financial field. Faced with the challenge of reducing carbon emissions, commercial banks have accelerated the transformation and upgrading of business concepts and developed into green industries. The basic nature of a bank is to provide reliable services and obtain corresponding profits by providing financial products and services to responsible entities. At this stage, banks have accelerated development of green financial products, forming different forms of green credit, green bonds and other content. Meanwhile, commercial banks are also facing many challenges and problems in this context.

Effect of banks’ ownership structure on financial performance: evidence from banks in an emerging market

PurposeThis study aims to examine the effect of ownership structure on financial performance of commercial banks in Kenya.Design/methodology/approachThe data were collected from audited financial statements of 39 commercial banks in Kenya for the period 2009–2020.FindingsRegression results found evidence of ownership structure explaining commercial banks’ financial performance. The results found a negative association between state ownership and net interest margin, a negative association between management ownership and net interest margin and a negative association between institutional ownership and return on assets.Practical implicationsBased on the findings, commercial bank management should therefore devise ownership structure policies that are geared toward boosting their financial performance both in the short run and the long run. Second, this study recommends a minority shareholding of the state in commercial banks to deter political interference, protect investors’ wealth from erosion and allow the majority shareholders to adopt a strong corporate governance mechanism for higher financial performance. Banks with a high percentage of state ownership should consider partial privatization to improve corporate governance practices. Third, banks should adopt a managerial ownership policy limiting the proportion of equity stock held by executives to limit their powers in strategic decision-making. Fourth, this study proposes a percentage limit on the equity stock of an institutional investor to eliminate bureaucracy in strategic decision-making and protect investors’ wealth.Originality/valueThe study finding is meant to inform regulation and operation policies in the banking sector and contribute to the literature on ownership structure, especially in the banking sector.

Risk Management and Value of Listed Commercial Banks in Nigeria

This study was carried out to examine the relationship between risk management and value of listed commercial banks in Nigeria. The study, anchored on the risk management theory, adopted the ex post facto research design. The population consists of all listed commercial banks in Nigeria. Data for the study were collected from secondary sources through content analysis of corporate financial statements of the sampled commercial banks for the period 2017 to 2022. The data collected were analysed using the descriptive and inferential statistics while the hypotheses formulated for the study were tested using the panel regression analytical method. Findings of the study showed that operational risks and liquidity risks management have a significant positive relationship with market value of listed commercial banks in Nigeria. The study also found that market value has a negative and significant relationship with credit risks. The study therefore concludes that risk management practices influence the market value of listed commercial banks in Nigeria and recommends amongst others that automated credit tracking mechanism should be put in place by the management of commercial banks so as to reduce the possibility of default and outstanding loans beyond the substandard loan level of between 90 to 180 days.

How cybersecurity influences fraud prevention: An empirical study on Jordanian commercial banks

In this digital age, fraudulent practices are among the most challenging that organizations must be aware of due to the increasing use of online transactions. This also applies to the banking sector whose business has become more complex with the recent developments in information and communication technology, which has changed the nature of bank fraud requiring advanced prevention measures. From this perspective, this paper aims to determine how cybersecurity affects fraud prevention for Jordanian commercial banks. A five-dimensional NIST cybersecurity framework was used. The research data was collected from 173 information technology managers in commercial banks listed on the Amman Stock Exchange. Structural equation modeling (SEM) was applied to investigate research hypotheses. The results of the research demonstrated the significant impact of cybersecurity in fraud prevention, especially detect function which had the largest impact among the dimensions of cybersecurity. Therefore, a set of recommendations were formulated for policymakers in Jordanian commercial banks, the most important of which is the adoption of multi-factor authentication (MFA) approaches for customer accounts, employee access, and biometric systems that add an additional layer of protection and make access to sensitive information to unauthorized individuals more difficult.

Effectiveness of Credit Terms on Management of Non-Performing Loans in Kenyan Commercial Banks

This study sought to establish the effectiveness of Credit Terms on Management of Non-Performing Loans in Kenyan Commercial Banks. The specific objective was to establish how credit term was effective in managing non-performing loans by reviewing credit period, credit limit, interest rates and default term within the corporate, business and personal segments of commercial banks in Kenya. The study was guided by both the Theory of Information Asymmetry and Credit Scorecard theories. An explanatory research design was adopted employing both simple random and stratified sampling techniques. The sample comprised 222 credit officers employed in the 41 commercial banks in Kenya. Structured questionnaires were applied to the credit officers in the collection of primary data. Cronbach’s alpha and factor analysis were applied in testing both the reliability and validity of the research instruments. A multiple regression model using SPSS (Version 23) was used in the analysis of the obtained data and to test the hypotheses. The study identified that credit terms (ꞵ= .570) had a positive and significant effect on management of nonperforming loans. In regard to this new knowledge, the study recommends that credit terms be adopted by the management of commercial banks and policymakers. This will help the banks increase their profitability, enhance their growth and cope with the intense competition within the banking industry.

Risk Management and Financial Performance of Commercial Banks in Nigeria.

This study establishes the degree to which risk management has impacted profitability of commercial banks with the aim of contributing to improving the financial performance improvement. This study used secondary data from listed banks extracted from Central Bank of Nigeria list of financial institutions. The study was 2012 to 2021. The sample size of fourteen commercial banks in Nigeria was utilized for the study. Data were analysed using descriptive, Pearson correlation, r and Multiple linear regression (ANOVA) r statistical analysis. Findings were that the Pearson results posted significant relationships among credit risk, operational risk as measures of risks with profitability measures of net interest margin except the liquidity risk. The linear regression result indicated that Credit risk has significant effect on Net interest margin. However, there is no significant effect of liquidity and operation risk on net interest margin of commercial banks in Nigeria. The findings suggest that effective risk management strategy play a key role in commercial banks profitability in Nigeria. Therefore, this study recommended that effective risk management framework to improve financial performance.