Performance Of Banking Sector Research Articles

Revealing the Impacts of Banking Sector Development on Renewable Energy Consumption, Green Growth, and Environmental Quality in China: Does Financial Inclusion Matter?

China aims to reduce its carbon dioxide emissions and promote green growth. This study aims to examine the effect of banking sector performance indicators (banks assets and return on asset) and financial inclusion on renewable energy consumption, green growth, and carbon emissions for China from 1995 to 2020 using the ARDL approach. The long-run results suggest that bank assets increase renewable energy consumption and green growth. While return on assets also increases green growth and decreases carbon emission in the long run. Financial inclusion enhances renewable energy consumption and green growth, curbing CO2 emissions. Banking sector performance and financial inclusion have short-run effects on renewable energy consumption, green growth, and carbon dixoside emissions. The findings thus point to the need for policies that promote banking sector performance and financial inclusion to boost green growth and alleviate CO2 emissions.

Corporate social responsibility disclosures and profitability of Islamic banks: an empirical study

PurposeThis study aims to investigate the relationship between corporate social responsibility (CSR) disclosure and financial performance (FP) of Islamic banking sector from a developing country perspective. It also explores the present status of CSR activities performing by the listed Islamic banks (IBs) of Bangladesh.Design/methodology/approachThe secondary data from seven IBs’ annual reports for the years 2009–2018 are taken to obtain substantial measures of CSR activities. A corporate social responsibility disclosure index is constructed based on disclosure status on nine dimensions and 75 items as per the Accounting and Auditing Organization for Islamic Financial Institutions standards. To find the association between CSR disclosures and profitability, panel regression analysis has been performed.FindingsThe result indicates that CSR disclosures have a significant and negative relation with FP (return on assets) of IBs. It also suggests the expansion of CSR practices and the communicative CSR reporting of IBs, as an ethical identity, toward the stakeholders and society.Research limitations/implicationsFirst, the samples used in this study are limited to IBs as ethical identities in Bangladesh. Second, the length of a time frame as the practice of CSR activities and its reporting is still ineffective following the enforcement of the central bank directive in 2008. Another limitation is that the study used a subjective measure, content analysis, of CSR activities that was self-reported disclosures, which may creep some biasness.Practical implicationsThe practical involvement of this research includes the assistance for policy development regarding better understanding of expansion of CSR practices and trustworthiness of CSR reporting by the Islamic banking segments in developing country context. Future researchers can get a glimpse of what reputational impact CSR initiatives really have on consumers and investors, considering CSR activities as an indicator of greater transparency and honesty in operations and financial reporting.Originality/valueThis study makes an important contribution to the academic literature on CSR communication from developing country context where CSR activities are supported under Islamic banking system. In addition, its examination of the legitimacy of CSR disclosures elaborates the social obligations of corporate entities to their stakeholders and society.

Digital bank transactions and performance of the Indian banking sector

ABSTRACT Our study examines the impact of digital bank transactions on the performance of Indian banks. The study aims to identify the digital mode of transaction parameters that influence financial and operating performance and reduce bank costs. A panel data set has been prepared for 2011 to 2020, considering 32 public and private banks. On the prima facie, the share of public sector banks has declined in the digital mode of transactions on the counterpart of private sector banks. It’s evidenced that a 1% increase in the value of Real-Time Gross Settlement (RTGS) and National Electronic Fund Transactions (NEFT) causes a rise of 0.03% and 0.08% in the business per employee, respectively. Indeed, a change in the RTGS and NEFT transaction further explains CASA to Deposit ratio (0.016% and 0.0078%). Also, a change in RTGS shows a prominent effect on the advances (0.7%). Credit card transactions at ATMs and POS have negatively impacted the cost of funds. Our study proposes two practical implications: First, acceleration in promoting RTGS-based transactions is required; consequently, it will enhance the bank’s performance. Secondly, banks should facilitate credit-based digital transactions to lessen the cost of funds.

The Mediation Role of Employee Engagement on the Relationship between Aspects of Human Capital Management and Employee Job Performance

This study examined the mediation role of employee engagement on the relationship between the aspects of human capital management and employee job performance in the Ethiopian banking sector. This study reports the responses of 426 respondents from twelve banking institutions in Addis Ababa, Ethiopia, drawing on the social exchange theory and the resource-based view theory. This study is structured on a quantitative approach, with stratified and simple random sampling techniques. Exploratory and confirmatory factor analyses were applied to test the factors and verify the factor structure of a set of observed variables. The scales were tested for reliability and validity. Structural equation modeling (SEM) with AMOS was used to test the hypothesized relationships. The results revealed that the aspects of human capital management, namely knowledge accessibility, learning capacity, workforce optimization, leadership practice, and career advancement, positively relate to employee job performance. Moreover, the results of bias-corrected bootstrapping iteration revealed that employee engagement partially mediates this relationship between aspects of human capital management and employee job performance. Finally, the limitations and future research implications are discussed. Keywords: human capital management, employee engagement, employee job performance DOI: 10.7176/EJBM/14-13-02 Publication date: July 31 st 2022

IMPACT OF FREE CASH FLOW ON THE FINANCIAL PERFORMANCE: EVIDENCE FROM COMMERCIAL BANKS OF PAKISTAN

Free cash flows and financial performance is an area of interest for research especially in financial sector that plays a mediatory role between lenders and borrowers. Financial health of any economy depends upon the sustainability of banking sector that is based upon their sound and efficient financial performance. The link between free cash flows and financial performance of financial sector is empirically investigated in the study. Regression results of the study support that free cash flows have significant positive and negative impact on financial performance of banking sector during time frame 2011-2020. The banks having strong financial position are able to achieve competitive edge in the financial market. So managers at top position and policy makers should design strategies for efficient utilization of free cash flows that not only increases the financial performance but also contribute to stock holders’ wealth maximization. Keywords: Financial performance, Bank size, Return on equity, Return on asset, Agency problems.

Impact of Globalization on Banks Performance and Standard of Living in GCC Countries: Macro Evidence Based on GMM Approach

This research intends to present empirical evidence on the impact of globalization on the banking sector's performance and the standard of living in the Gulf Cooperation Council (GCC) countries. The present study accounts for the several characteristics of globalization. The authors have utilized data of commercial banks in the Gulf Countries (GC) from 1996 and 2017. The return on assets and equity are used to assess the performance of the banks by using the technique of Generalized Method of Moments. It is found that bank profitability is negatively impacted by greater economic, social, and political globalization. However, globalization has a positive impact on GDP per capita in GCC nations, indicating that globalization is beneficial from a living standard point of view. The current research has used population and government effectiveness as control variables, and the findings show that growing population benefits bank’s returns while government effectiveness has no influence on banking performance.

Impact of COVID-19, Political, and Financial Events on the Performance of Commercial Banking Sector

This paper employs a structural empirical model to gauge the possible effects of COVID-19, political and financial events on the returns and volatility of commercial banks. It observes that insured and run-prone uninsured depositors choose between differentiated commercial banks, which appears to be significantly impacted from the present pandemic, especially for the case of Pakistan’s commercial banking sector. The estimated volatility series for commercial banks is measured through the GARCH model, which explains the current financial and political distress for the case of shocks from COVID-19. We calibrate by Impulse Indicator Saturation (IIS) to detect the structural breaks formed by these events in the returns and volatility series of commercial banks. It is observed that the calibrated model possesses almost all financial events that have had a prominent impact on the returns and volatility series whereas two out of eighteen political events are unimpacted.

Impact of Drivers of Change (Digitalization, Demonetization, and Consolidation of Banks) With Mediating Role of Nature of Training and Job Enrichment on the Banking Performance

This paper examines the impact of the drivers of change, that is, digitalization, demonetization, and consolidation of banks as factors affecting training and development. Banking institutions are the real contributors of the GDP in today’s world. The study is based on the data collected from senior bank officers, middle and lower level officers from India. The balanced scorecard is used to determine the performance of the banks with the help of four perspectives, that is, financial, customer, innovative, and growth perspective. Job enrichment helps in adding value to an employee through various techniques and programs. Partial Least Square-Structured Equation Modeling (PLS-SEM) was applied for examining the relation among the drivers of change and job enrichment with Banking Sector Performance. It also examines the mediating role of training between drivers of change and banking sector performance. The results suggest that training along with selected drivers and job enrichment influenced bank performance and value of adjusted R2 is .668. The current research suggests that the role of digitalization, demonetization, and consolidation of banks on banking performance improved with mediation effect of training. This research also highlights that in types of training, special training has higher loading, which implies the need to focus on training and specifically of special training to enhance banking performance.

Intensifying Employees' Job Performance in Palestine Banking Sector: How Personal Attributes Tell Us?

This study sought to examine the impact of personal attributes (motivation, proactive personality, and self-esteem) on job performance among the employees of Palestinian banks, particularly the national banks in the Gaza strip. A total of 160 banks’ employees participated in the study, representing 86.25 per cent of the response rate. Empirical findings from Pearson correlation coefficient and multiple linear regression analysis demonstrated that motivation (r = .644, β = .247, p<.01), proactive personality (r = .727, β =.417, p<.01), and self-esteem (r = .612, β = 0.284, p<.01) were all positively and significantly related to the employees’ job performance. Several recommendations were reached, the most important being that the national banks’ administrations should provide various training programs, embrace the approach of flexible working hours, and create programs that can strengthen the employees’ intrinsic motivation.

A Comparative Analysis of the Banking Sector Performance in India: Two-Stage Analysis

The objective of this paper is to analyse comparatively the technical efficiency of each commercial bank with the latest data source. The present study applied the input-oriented DEA model to assess the performance of the banking sector and further investigated the determinants of banks efficiency employed by both OLS and Logit models. The results of DEA showed that the public and domestic private sectors banks were more efficient than foreign sector banks in India over the period of study. The estimated results of the OLS and Logit models indicated that the coefficients of LR, ROA and BS had a positive effect on the bank technical efficiency and were statistically significant. The finding of the present study will be helpful for the policymakers, owners of the banks and governments to take appropriate strategies to yield the desired efficiency.

Corporate Governance and Organizational Performance: A Study of Selected Banks in Nigeria

An indebt study of the performance of Nigerian Banking sector is deplete with litany of woes and failures. This necessitated the need to examine the factors responsible for this sad scenario against the background of the role of corporate governance on organizational performance. The study adopted a combination of both descriptive design and ex-post facto research methodology; Secondary data were sought from published annual reports of selected Banks for the period under review (2014-2020), and was analyzed using descriptive statistics and ratio analysis. Hypotheses were tested by multiple regression and Pearson product moment correlation methods. The finding of the study revealed that there is a positive relationship between Audit Committee Size, Board Composition with performance of selected Banks, while Board Size and Board Meetings showed negative significant relationship with performance of selected Banks respectively. The study concluded with recommendations that Corporate Governance Mechanism and Code of Best practices contributed a good deal to the performance of Banks – that the managers of Selected Banks should adopt Corporate Governance principle and best practices as integral parts of managing banks for both effective and efficient service delivering, thus striking a balance between organization’s objective and the stakeholder’s interest.

Corporate Governance and Organizational Performance: A Study of Selected Banks in Nigeria

An indebt study of the performance of Nigerian Banking sector is deplete with litany of woes and failures. This necessitated the need to examine the factors responsible for this sad scenario against the background of the role of corporate governance on organizational performance. The study adopted a combination of both descriptive design and ex-post facto research methodology; Secondary data were sought from published annual reports of selected Banks for the period under review (2014-2020), and was analyzed using descriptive statistics and ratio analysis. Hypotheses were tested by multiple regression and Pearson product moment correlation methods. The finding of the study revealed that there is a positive relationship between Audit Committee Size, Board Composition with performance of selected Banks, while Board Size and Board Meetings showed negative significant relationship with performance of selected Banks respectively. The study concluded with recommendations that Corporate Governance Mechanism and Code of Best practices contributed a good deal to the performance of Banks – that the managers of Selected Banks should adopt Corporate Governance principle and best practices as integral parts of managing banks for both effective and efficient service delivering, thus striking a balance between organization’s objective and the stakeholder’s interest.

Cross-sectional dispersion and bank performance

We examine the relation between cross-sectional earnings dispersion and the banking sector's performance. Theory suggests that cross-sectional earnings dispersion will lead to greater loan losses and higher interest rates. We confirm this hypothesis by showing a robust association between earnings dispersion and bank performance. Dispersion in earnings explains more of the overall bank performance than macroeconomic indicators for business cycles. We also find that banks tighten their lending standards and increase interest rates to partially compensate for future loan losses. Finally, we find that cross-sectional earnings dispersion is associated with dispersion in bank performance. The relation between dispersion in bank performance and earnings dispersion is declining over time suggesting that systematic risk is rising in the banking sector.

The Effect of Export Commodities Price Fluctuation on the Banking Sectors' Financial Performance of the Sub-Saharan African States

This study examines the impact of export commodity price fluctuation on the financial sector performance in some selected sub-Saharan African (SSA) countries. The objective is to determine how instability in export commodity prices transmit to banking sector performance indicators in the region. Essentially a longitudinal study is conducted by combing annual time series data (1996 – 2018) for 18 sub-Saharan Africa countries that are resource exporter sourced from United Nations Conference on Trade and Development (UNCTAD) and World Bank database. The study adopts inferential, descriptive ex-post facto research design, using panel data covering the period 1996 to 2018 sourced from eighteen major primary commodity exporting countries in the sub-Saharan African states. Z-score to evaluate the probability of banking default. Oil price volatility is estimated using a GARCH data analysis framework in terms of mild volatility and intense volatility was applied to estimate the export commodity volatility while Z-score was used to profile the banking performance. It is found that intense commodity price fluctuations exert more debilitating effects on all banking sector performance indicators among the SSA countries with strongest effect of commodity price volatility on the banking sector performance being driven due to vulnerability of the banking sector. It is therefore recommended that banks evolve more efficient resilience mechanisms and that monetary and fiscal policy authorities should seek to enhance domestic capacity of the financial system to withstand domestic export commodity shock over time.

Understanding the Performance of the Banking System in Times of Crisis: the Case of Commercial Banks in the CEMAC

This article aims to explain the performance of the banking system in the Central African Economic and Monetary Community (CEMAC) during a crisis period by exploring the average value of the bank profitability indicator. A comparative reading of this indicator between 1986 and 2020 shows that profitability during a crisis period is higher than during the normal period. Using an analysis of the model of banking performance with the method of generalized moments (GMM), the results show that the contradiction relating to the banking performance is explained by: 1)- the strong presence of the State in the capital of commercial banks in the CMEAC zone during the crisis; 2)- the decline in liquidity characteristic of crisis periods also explains this performance of the CEMAC banking sector. It is recommended that the monetary authorities ensure that their decisions are strictly applied by commercial banks in normal times as well as in times of crisis

Financial Management: Management of Non-Performing Assets (NPAs)

"Banking sector plays an important role in the Indian economy. The banking sector performance can be measured by assessing the bad loans which cannot be recovered. The level of NPAs indicates the soundness of the banking sector. The purpose of this research is to examine the role of the different banks in managing and controlling the NPAs through the various recovery mechanisms. This paper identifies the reasons on occurring of NPAs in Indian banking industry, and to find out existing monitoring systems and credit appraisals to control the NPAs. The information will be useful for investors as the issue of poor loans causes for the NPAs and to know its impact on the profitability of the banks and thereby the future prospects of the banking sector. The main objectives of this paper; To examine the gross NPAs and incidence of NPAs. To measure the trends of NPAs in the Indian banking sector. Further the paper also attempts to study adherence to the guidelines and directions issued by the RBI from time to time"

EFICIÊNCIA BANCÁRIA NO BRASIL (2010-2019): UMA ANÁLISE DE DOIS ESTÁGIOS

The objective of this work is to analyze the performance of the Brazilian banking sector and its determinants. The present research was divided into two parts, the first part seeks to determine the technical efficiency by the DEA-BCC model in the main Brazilian banks in the period from 2010 to 2019. In the second part, the determinants that can influence the performance of banks are evaluated. Estimates indicate that large banks are, on average, more efficient than small and medium-sized banks. In addition, when looking at the type of ownership, foreign banks tend to perform better compared to national banks. In addition, the determinants point out that the net interest margin and non-interest income are significant and contribute positively to the level of efficiency. In turn, the capital adequacy ratio, non-performing loans and inflation have a negative impact on technical efficiency.

Competitive intelligence process and strategic performance of banking sector in Pakistan

Competitive intelligence process and strategic performance of banking sector in Pakistan

The Effect of COVID-19 on the Profitability of Commercial Banks in Bangladesh

Purpose: Every component of the global financial system has suffered serious harm due to the present COVID-19 pandemic, and Bangladesh is not an exception. The banking sector’s performance and profitability have been impacted as a result. In this paper, we analyze the effect of COVID-19 pandemic on the financial performance of banking sector in Bangladesh before and throughout the present era of COVID-19. Methodology: In this regard, the study considered the 14 banks over the period of 2014-2021. The random-effects regression model is utilized to identify the profitability drivers. The random effect model investigates the influence of bank-specific variables and macroeconomic variables on the profitability of banks. Findings: During the pandemic era of COVID-19, our article found that a high degree of nonperforming loans, retaining more liquid assets, and a significant amount of hedging funds reduced banks' profitability. In contrast, a suitable bank size, non-interest revenue, inflation rate, and population growth increased the bank's performance indicators throughout this time. Practical Implications: This study's findings will aid financial policymakers in identifying profit-enhancing loopholes and implementing preventative actions during crisis periods such as COVID-19. Originality: The profit influencing factor include both bank and economic oriented, some of which were not previously considered in Bangladesh-specific studies. Incorporating these additional criteria and the independent examination of the pandemic era helps us to get new perspectives on the elements that influence commercial banks’ profitability.

Peeking Beyond Profitability: Effects of Merger and Acquisition on Microeconomic Indicators in Banking Industry

The purpose of this study is to provide relative information on mergers & acquisition events of banks in Pakistan. To evaluate the profitability and microeconomic factor of banks in Pakistan, financials for thirteen years (2006-2017) were examined with the help of financial ratios. The research applied secondary data which were gathered from the financial statements of banks, and their websites. In this research, every financial decision-making process, ratio analysis by timeline method is most often utilized. The outcomes illustrate that the pre-merger performance of banking sector of Pakistan in the dimensions of profitability and loan/deposits was fairly satisfying. It clarifies that merger activity was unsuccessful in increasing the financial productivity of the bank, but banks become one with other small and the same sized banks simply to increase market shares, to increase their assets and to reveal concealed morals.