Performance Of Commercial Banks Research Articles

Impact of Corporate Governance and Timeliness of Financial Reporting on the Performance of Nepalese Commercial Banks

This study examines the impact of corporate governance and timeliness of financial reporting on the performance of Nepalese commercial banks. Return on assets and return on equity are selected as the dependent variables. Similarly, board size, leverage, audit committee size, annual general meeting delay, board meeting and independent directors are selected as the independent variables. This study is based on secondary data of 17 commercial banks with 119 observations for the study period from 2015/16 to 2021/22. The data were collected from Banking and Financial statistics published by Nepal Rastra bank and the annual reports of respective banks. The correlation coefficients and regression models are estimated to test the significance and importance of corporate governance on the timeliness of financial reporting in Nepalese commercial banks. The study revealed that board size has a negative impact on return on assets and return on equity. It means that increase in board size leads to decrease in return on assets and return on equity. Likewise, leverage ratio has a positive impact on return on equity. It shows that higher the leverage ratio, higher would be the return on equity. Similarly, leverage ratio has a negative impact on return on assets. It shows that higher the leverage ratio, lower would be the return on assets. Moreover, this study showed that audit committee has a positive impact on return on assets and return on equity. It means that increase in audit committee leads to increase in return on assets and return on equity. Further, annual general meeting has a negative impact on return on equity. It shows that higher the annual general meeting, lower would be the return on equity. In addition, annual general meeting has a positive impact on return on assets. It shows that higher the annual general meeting, higher would be the return on assets. Likewise, board meetings have a positive impact on return on assets and return on equity. It shows that higher the board meetings, higher would be the return on assets and return on equity. Likewise, independent director has a negative impact on return on equity. It indicates that increase in independent director leads to decrease in return on equity. Similarly, independent director has a positive impact on return on assets. It indicates that increase in independent director leads to increase in return on assets.

Effect of Psychological Empowerment on Employee Job Satisfaction of Nepalese Commercial Banks

This study examines the effect of psychological empowerment on employee job satisfaction of Nepalese commercial banks. Employee job satisfaction is the dependent variable. The selected independent variables are psychological empowerment, meaningful work, organizational commitment, employee performance and self-determination. The primary source of data is used to assess the opinions of the respondents regarding psychological empowerment, meaningful work, organizational commitment, employee performance and self-determination in Nepalese commercial banks. The study is based on primary data with 121 respondents. To achieve the purpose of the study, structured questionnaire is prepared. The correlation coefficients and regression models are estimated to test the significance and importance of different factors affecting employee job satisfaction in Nepalese commercial banks. The study showed that psychological empowerment has a positive impact on employee job satisfaction. It implies that providing psychological empowerment leads to employee job satisfactions. Likewise, meaningful work has a positive impact on employee job satisfaction. This indicates that assigning employees with meaningful work leads to the employee job satisfactions. Similarly, organizational commitment has a positive impact on employee job satisfaction. It indicates that the organizational commitment towards employees enhance employee job satisfaction. Moreover, employee performance has a positive impact on employee job satisfaction indicating that better performance in job leads to the employee job satisfaction. Likewise, self-determination has a positive impact on employee job satisfaction which indicates that higher the level of self-determination in employees, higher would be the satisfaction from the job.

Research on the Impact of Digitalization on Bank Performance Based on BP Neural Network

With the promotion and development of digital finance, the degree of digitalization has an increasingly significant impact on the banking business, which cannot be ignored in the operation of commercial banks. Therefore, establishing a digitalization bank profitability system model is of great significance for the sustainable development of banks and digital finance. This article selects 6 Chinese state-owned banks from 57 listed banks in the A+H stock market as samples, constructs a digital indicator system and evaluation model for banks through the literature review method, and uses simulation training to explore the effectiveness of BP neural network in evaluating the impact of digitalization on bank profitability. The aim is to provide a reference for the evaluation of financial statement information of other banks and other factors affecting bank digitalization. The innovation of the article lies in the innovative use of the entropy weight coefficient of variation method to establish a digital evaluation system model, which utilizes the data itself to objectively establish an evaluation system, incorporate the established digital system into the black box model of the BP neural network model to study the impact of changes in digitalization on banking operations.

HR Re-engineering Elevates Banking Performance in Commercial Banks

General Background: Re-engineering human resources (HR) is a critical method for enhancing organizational efficiency and performance, especially in sectors like banking where customer satisfaction, employee satisfaction, profit growth, and diversity of services are pivotal. Specific Background: This research investigates the impact of HR re-engineering on banking performance, focusing on organizational, human, and technological dimensions. Knowledge Gap: Despite extensive studies on HR re-engineering, its direct correlation with banking performance, particularly in commercial banks, remains underexplored. Aims: The study aims to clarify and apply HR re-engineering methods to improve banking performance, using a questionnaire, personal interviews, and field observations on a random sample of 200 respondents, analyzed via SMART PLS software. Results: Statistical analysis revealed a significant correlation between HR re-engineering and improved bank performance. Key findings indicate that HR re-engineering enhances employee morale and organizational efficiency, ultimately boosting customer satisfaction, employee satisfaction, profit growth, and service diversity. Novelty: This study uniquely combines multiple data collection methods and advanced statistical analysis to provide robust evidence of the positive impact of HR re-engineering on banking performance. Implications: The findings suggest that banks should invest in HR re-engineering programs, focusing on training, skill development, and technological integration to improve performance. These programs should be supported by adequate material and financial resources to ensure their success, thereby enhancing the competitive edge of banks in a dynamic environment. Highlights: Correlation and Impact: HR re-engineering boosts banking performance significantly. Methodology: Used questionnaires and SMART PLS for robust analysis. Implementation: Invest in HR training and technology for enhanced competitiveness. Keywords: HR re-engineering, banking performance, customer satisfaction, employee satisfaction, SMART PLS

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.

Reevaluating the Profitability, Performance, and Stability of Sharia Banks in Indonesia Using the Eagles Framework

Islamic banking in Indonesia has experienced rapid development in recent years. This encourages the importance of reviewing the financial performance of Islamic Commercial Banks (BUS) to determine the level of health and efficiency. The purpose of this study is to analyze the financial performance of BUS during the period 2018-2022 using the EAGLES method. As well as comparing financial performance between BUSs during the 2018-2022 period. This study uses quantitative methods with secondary data sourced from BUS Annual Reports for the 2018-2022 period. Financial performance is measured using the EAGLES method which includes ROA, ROE, NPF, DGR, LGR, FDR, CAR, and SRQ ratios. The results showed that there were differences in the ratios calculated on BUS during the 2018-2022 period. Overall, BUS shows a fairly healthy financial performance with some BUSs that have better performance than others. The conclusion of this study is that the financial performance of BUSs during the 2018-2022 period shows a positive trend with some BUSs that have better performance than others. The use of the EAGLES method provides a comprehensive overview of BUS financial performance and can be used to compare performance between BUSs.

Kinerja Maqashid Syariah dan Financial Sustainability Bank Umum Syariah di Indonesia

Research on the relationship between maqashid sharia performance and financial sustainability of Islamic banks in Indonesia is still rare. Research related to the effect of performance on financial sustainability of Islamic banks mostly uses CAMEL ratio analysis which only emphasizes financial performance. This study aims to examine the relationship between maqashid sharia performance and financial sustainability of Islamic Commercial Banks in Indonesia. This research uses quantitative methods with multiple regression analysis techniques. The research sample is 58 data from 12 Islamic Commercial Banks registered on OJK in 2016 - 2020. The results showed that IMS had a significant negative effect on FSR. These results indicate that the higher the maqashid sharia performance achieved, it actually causes a decrease in financial sustainability as measured by the Financial Sustainability Ratio of the Islamic bank. Future research is expected to not only test the factors that affect the financial sustainabilty of Islamic banks, but also other types of Islamic entities.

ESG Performance of Chinese Commercial Banks

As a core component of China’s financial system, the banking industry is crucial for economic development. As a leading institution in the Chinese financial sector, commercial banks can actively promote the ESG development of Chinese enterprises by leveraging their ESG performance. This study selected the top three commercial banks in China’s ESG rating rankings, including the Industrial and Commercial Bank of China, China Construction Bank, and Postal Savings Bank of China, to conduct a detailed analysis of their published ESG reports and social responsibility reports. The purpose is to extract the practical experience of these banks in ESG governance and provide a reference for other banks in the same industry.

Evaluating the influence of corporate governance mechanisms and bank-specific factors on the performance of Nepalese commercial banks

This purpose of the study is to evaluate the influence of corporate governance mechanism factors: board size, board independence, capital adequacy ratio, as well as bank-specific factors: dividend payout ratio and firm size, on the performance of Nepalese commercial banks. The study covered 10 years’ secondary data from 2013/14 to 2022/23, derived from the annual reports and websites of four selected commercial banks that were listed on the Nepal Stock Exchange: Kumari Bank Limited, Himalayan Bank Limited, Prabhu Bank Limited, and Prime Commercial Bank. A non-probability sample method, especially the purposive sampling approach, was used in this study. Earnings per share (EPS) is regarded to be the dependent variable, whereas two elements, namely, corporate governance mechanisms and bank-specific factors, are considered to be independent variables. Data analysis was carried out using the SPSS 25 software, which includes descriptive statistics, Pearson correlation, and multiple linear regression. The empirical results indicate that board size has a favorable influence on EPS, but this association does not reach statistical significance. In contrast, board independency has a notable and statistically significant negative impact on EPS. The capital adequacy ratio is positively correlated with EPS. However, the impact of firm size on EPS is not statistically significant. On the other hand, the dividend payout ratio has a significant positive effect on EPS.

Impact of Intellectual Capital and Islamic Corporate Governance on Financial Performance of Indonesian Islamic Commercial Banks

The aim this study is to investigate the relationship between intellectual capital, Islamic commercial banks' financial performance, and Islamic corporate governance in Indonesia from 2017 to 2019. The methodology used in the study is quantitative. The people are all Muslims. Commercial banks that have Financial Services Authority registrations (OJK) over the three-year period (2017-2019). The sample is determined using a saturated sampling technique, resulting in 14 Islamic Commercial Banks and forty-two observations in total. The analytical approach is panel data regression analysis and data processing with Eviews 9. The study's findings demonstrate that intellectual capital has a significant impact on return on assets. In contrast, the Sharia Supervisory Board has little effect on Return on Assets. However, the Commissioners' Board and the Directors Board both significantly influence Return on Assets.

Technological Innovation and Commercial Banks' Financial Performance: A Mediation Analysis of Risk Management Practices

The purpose of the study is to investigate the association between technological innovations and the financial performance of commercial banks using risk management practices as a mediator. The study's primary focus was on commercial banks in Uganda's Kampala Central region. A quantitative method was used to adopt a cross-sectional survey design. The study selected bank employees from 24 Kampala-based commercial banks using the convenience sampling technique. To accomplish the study's goals, mediation analysis were done using Baron and Kenny, while correlation, regression and inferential statistics were examined using the Statistical Package for Social Scientists (SPSS) PROCESS MACRO. The results of the study showed that the study variables had a significant positive association. The results of the regression show that risk management techniques and technological innovation are predictive of financial performance. The results showed that risk management procedures significantly impacted the connection between technological innovation and financial performance. Results also indicate that the association between financial performance and technological innovation is mediated by risk management strategies. The study provides many implications for management and theory.

Research on the Impact of Digital Transformation on the Business Performance of Commercial Banks

Nowadays, with the development of the digital economy, commercial banks are actively conducting digital transformation. Studying the impact of the digital transformation of commercial banks on their operating performance can help commercial banks form a stronger core competitiveness and promote high-quality financial development. Based on the above background, this article first describes the status and development of digital transformation and development of commercial banks, and secondly analyzes whether Chinese commercial banks’ digital transformation is conducive to improving their operating performance. Thirdly, by selecting the data of the listed commercial banks in the ten years of 2012–2022, this article obtains the empirical testing of the digital transformation on different property rights. Finally, the higher the level of digitalization, the higher the digital level, the more significantly promotes the performance of commercial banks. Finally, based on the above analysis, this article puts forward feasibility opinions on commercial banks and related regulators.

Impact of capital inflows on bank profitability: a comparative analysis of dual banking systems

PurposeUsing data on 739 banks from 22 countries with a dual banking system from 2012 to 2019, this paper aims to examine whether capital inflows affect banks’ profitability in recipient countries.Design/methodology/approachThe authors check the conjecture about the effect of capital inflows on the profitability of the host country’s banks by estimating the following regression:Pict=α0+α1·CFct+α2·Islamici+α3·CFct×Islamici+δ·Xict+θ·Yct+εict (1)where the dependent variable (Pict) refers to bank profitability, measured by either ROA or ROE for bank i, country c and year t. ROA is defined as the ratio of net profit to average total assets expressed as a percentage, which determines how efficiently a bank uses its assets to generate a profit. ROE is defined as the ratio of net profit to average total equity expressed as a percentage, which is a measure of increases in shareholders’ wealth.FindingsThe authors find that capital inflows are generally positively associated with bank profitability. However, cross-border capital inflows reduce the rate of return in Islamic banks relative to their conventional counterparts. When decomposing inflows by instrument, the authors find that the enhancing role of capital inflows on bank profitability comes mainly from debt inflows and borrowers; the authors observe that the documented results emanate mostly from the inflows to the financial sector. These results remain unchanged if holding a bank’s risk constant. Overall, foreign funds in the form of debt inflows targeting the financial sector can disproportionately improve the performance of commercial banks in recipient countries.Originality/valueThe paper is an original research project. The analysis contributes to the existing literature in several ways: the authors study whether the impact of capital inflows on bank profitability varies with the bank business model by looking at both the Islamic and conventional bank systems. The profitability of the banking system is an important catalyst for growth and stability. The authors also decompose capital inflows to recipient countries into their equity and debt components and study the differential impact of those components on the profitability of Islamic and conventional banks.

The Effect of Women in Business on the Performance of Commercial Banks in Calabar, Nigeria

This research paper investigates the impact of women in business on the performance of commercial banks in Calabar, Nigeria. The paper explores how the presence of women in various business roles, particularly in leadership and management, affects the financial and operational success of the banking sector. A survey research design was adopted. A sample size of fifty-four (54) respondents was selected from the total population of sixty-two (62) women employees using simple random sampling technique in all the 13 branches of the banks. Data were collected through a structured questionnaire and were analyzed using descriptive statistics and a simple linear regression was used to test the hypotheses via SPSS. The research findings showed that the women in business have significant effect on organizational performance in commercial bank branches selected for the study. Specifically, the study revealed that there is a significant and positive effect of women in business on organizational productivity, financial stability, customer satisfaction, employee engagement, and innovation. Arising from the findings, the study recommended that organizations whether manufacturing or servicing should ensure gender diversity in their team which will bring unique perspectives and experiences to the table, which can lead to more effective problem-solving and new ideas for improving productivity and innovation. The study also recommended that organizations should encourage women participation in the leadership role as they are often known for their strong communication and empathetic skills, which can lead to higher service quality and improved organizational effectiveness to enhance performance.

Effect of Probability of Default and Financial Performance of Commercial Banks in Kenya

Purpose: Specific objectives are to establish the effect of effect of probability of default and financial performance of Commercial Banks in Kenya. The theoretical framework was based on asymmetric information. Methodology/Approach: The adopted mixed research comprising of causal and longitudinal research designs. The study used all commercial banks which are 42 it total. Positivism research philosophy was adopted. The study used secondary data from financial statements of banks. Data was analyzed by both descriptive and inferential statistics. Data was presented using tables. Findings: From the findings Probability of default negatively affects the Performance of Commercial Banks in Kenya as indicated by a p value of 0.00 in the fixed effect model. This can be explained as a result of the following possible factors: Loans with higher Probability of default are more likely to become non-performing assets or be classified as doubtful debts. Implications: Implementing a credit risk stress testing plan can effectively mitigate the likelihood of a bank encountering a financial crisis. In order to mitigate liquidity risk, it is advisable for banks to augment their liquid holdings.

Impacts of ESG Performance on the Profitability of ASEAN-6 Commercial Banks in the Context of Digital Transformation

Purpose: This study's primary goal is to examine the relationship between Environmental, Social, and Governance (ESG) performance and profitability in ASEAN-6 commercial banks amid digital transformation. Design/methodology/approach: To reach this purpose, the paper uses linear regressions to explore the three re-search questions: “What are impacts of ESG performance on banks' profitability?”, “What are impacts of digital transformation on bank's ESG performance?”, “How is moderate effect of digital transformation to impacts of ESG performance on banks' profitability?”. The paper employs data available for 39 ASEAN-6 banks in 2023. Findings: The main findings are: (i) enhancing ESG performance is likely to boost the bank's profitability; (ii) while banks can bolster their ESG metrics through increased spending on digital transformation, there's a risk that excessive investment in this area could negatively impact Return on Assets (ROA); (iii) the beneficial influence of ESG on ROA tends to decrease as the investment in digital transformation grows. Research limitations/implications: The findings offer insightful viewpoints for bank managers and policymakers regarding the significance of ESG and digital transformation in influencing banking profitability Originality/value: The study contributes to the current literature in emphasize the role of sustainable development in improving bank's performance, especially in the context of digital transformation.

The effect of credit risk management on the financial performance of commercial banks: evidence from Tanzania

The vital role played by commercial banks in economic development calls for the stable and sustainable financial performance of banks for smooth financial intermediation. However, unhealthy credit has caused the collapse of many financial institutions all over the world. Therefore, this study examines how credit risk management practices affect the financial performance of commercial banks in Tanzania. While employing multiple linear regression techniques, the study analysed balanced panel data from 225 observations gathered from audited published annual reports of 15 commercial banks in Tanzania from 2006 to 2020. Credit risk approval and credit risk monitoring were used as proxies for credit risk management. The findings reveal that credit risk approval has a positive effect on banks’ capital adequacy, efficient utilisation of equity, asset quality, and liquidity. However, credit monitoring negatively affects the financial performance of banks through their earning ability, asset quality, and liquidity. The study recommends that incorporating credit risk management practices as a core aspect of bank operations is crucial, as it has a beneficial impact on financial performance. Nevertheless, it is advised to exercise caution and achieve a harmonious balance in the integration and concentration of all examined variables since credit approval could not exhibit a positive effect on banks’ earning ability. This has also been established on credit monitoring towards capital adequacy and efficient use of equity.

Analyzing the Financial Performance of Commercial Banks in India: Camel Model on YES Bank & SBI And Lakshmi Vilas Bank & DBS Bank India Ltd.

Analyzing the Financial Performance of Commercial Banks in India: Camel Model on YES Bank & SBI And Lakshmi Vilas Bank & DBS Bank India Ltd.

The Effect of Credit Risk on the Financial Performance of Commercial Banks in Vietnam

The Effect of Credit Risk on the Financial Performance of Commercial Banks in Vietnam

The Effect of Istishna Financing, Mudharabah Financing and Ijarah Financing on Financial Performance in Islamic Commercial Banks

The purpose of this study is to see the partial and simultaneous effects of istishna, mudharabah and ijarah financing on profitability (ROA) of Islamic Commercial Banks in Indonesia. The method is a descriptive quantitative approach. The sample and population in this study are Islamic commercial banks in Indonesia in 2018-2023 on a quarterly basis. So that there are 24 samples in this study. Isthisna financing results in the conclusion that the level of profitability (ROA is significantly negatively affected by istishna financing. In addition, mudharabah financing significantly and negatively affects the level of profitability (ROA). Furthermore, it is shown that ijarah financing does not significantly affect the level of profitability (ROA). Simultaneously, it is concluded that istishna financing and mudharabah financing have a significant negative effect on the level of profitability (ROA). Then ijarah financing has no significant effect on the level of profitability (ROA). Data analysis used in this study requires descriptive analysis test, classical assumption test and hypothesis testing. The data used is secondary from Islamic banking statistics with the Financial Services Authority (OJK) website.