Performance Of Banking Sector Research Articles

Macroeconomic Variables and Banking Sector Performance in Sri Lanka

This paper aims to evaluate the effect of selected macroeconomic variables on banking sector performance in Sri Lanka while using ARDL co-integration technique and Granger causality approach. According to study results, in the long run, model 1 shows all explanatory variables have a negative and significant impact on ROE Model 2 shows IR and LER have a positive and significant effect on IM and RR has a negative impact on IM. For model 2 in the short run, the current year's interest rate negatively impacts and the Current year's GDP growth positively impacts IM. It should be carefully controlled by both fiscal and monetary phenomena in Sri Lanka. Because it is needed favorable macroeconomic environment to boost the banking sector as well as the financial market in a country.

The implementation of AIS and financial performance: empirical study in selected Jordanians banking institutions

This article presents a reflection on the role of current Accounting Information Systems on financial performance in Jordanian banking sector. The study is based on primary data collected through a structured questionnaire. The data were analyzed using Multipleregression analysis. The results indicated a significant impact of (SVQ) Service Quality, (IFQ) Information Quality, and (SYQ) System Quality on financial performance. Whilst showed no significant effect of (DQ) Data Quality on financial performance. The effectiveness of the accounting information system also improves the financial performance of banks. In light of the findings, this study suggests the management to establish better strategies that can ensure the effectiveness and efficacy of AIS. The findings would be valuable for academic researchers, managers and professional accounting to acquire a better vision of the AIS by testing the phenomenon in Jordan as a developing country This study is only conducted in Jordan as a developing country. Future research can be orientated to other national and cultural settings and compared with the results of this study.

Do Financial Indicators Affect the ‎Performance of the ‎Banking Ecosystem of Bahrain? A Study of Covid-19 ‎Unprecedented

The main objective of this study is to address the growth of the banking system in Bahrain and analyze the impact of Covid-19 on its financial performance due to the global pandemic effect. The sample has been taken from the banking sectors of Bahrain, which include three clusters: Islamic banking, conventional banking, and entire banks. Data were collected from the Central Bank of Bahrain (CBB), with quarterly data extracted from 2019-2020. This paper measures the impact of pre- and post-Covid-19 financial performance of Bahraini banks to determine the factors affecting the financial indicators that influence the banking sectors of Bahraini banks. The outcomes of the t-statistic failed to reject the null hypothesis, indicating no significant difference between the pre- and post-financial performance of the complete banking sectors of Bahrain. Furthermore, the study diagnoses the factors analysis, including capital adequacy, asset quality, profitability, and liquidity of the banking system of Bahrain. Islamic banking maintained a strong financial position in the pre- and post-Covid-19 periods, along with capital adequacy, asset quality, and profitability. It was observed that pre-Covid-19 conventional banks performed below par in terms of capital adequacy, asset quality, and liquidity, but post-Covid-19, the profitability ratio improved. The entire banking sector, before Covid-19, worked under pressure to generate profit, but after the coronavirus crisis, it recorded profits due to timely actions taken by the Government of Bahrain to reduce the adverse impact of Covid-19. This is a time of survival and growth for the banking industry during uncertainty, aiming to facilitate knowledge-driven insights for financial success.

COVID-19 post-implications for sustainable banking sector performance: evidence from emerging Asian economies

The novel COVID-19 virus, and the pandemic that has followed its spread, has had a massive impact on the banking industry on a global level. Therefore, considering this context, this study examines the effect of the COVID-19 pandemic on the banking sector’s performance in the Asian emerging economics, over a time span ranging from 2016Q1–2021Q2. For this purpose, this study makes use of the FE, RE, 2SLS, and PPML regression models. The empirical findings show that the GDP and banking size are positively related to bank performance in the pre-COVID era, and the COVID pandemics era thus far in the Asian emerging economies. In addition to this, the findings also reveal that the impact of GDP and bank size on banking performance is lower in the pandemic period, as compared to the pre-COVID period. Furthermore, the results show that the COVID pandemic has significantly affected the banking sector performance in the Asian emerging economies. Findings have also suggested that the central bank should shift their focus on the banking industry in the Asian emerging economies. Various other policy implications have also been suggested under the present study.

Critical Role of Risk Management and its Impact on Bank Performance in Pakistan

Risk management is most important factor to exist and survive for the financial industry. The major bankruptcies which incurred of ERON and Lehman-Brothers this arises the awareness about the appropriate risk management procedure in banking sectors. Our study analyze the various risk which can affect on banking operation in Pakistan and this study also include the effect of risk management on the performance of the large banking sector as well as small banking sectors in Pakistan. This study uses capital adequacy ratio, non performing loans, interest rate risk, liquidity risk and operational risk for the risk management. The data is taken from the published annual report of the commercial banks from 2005 to 2015. Descriptive statistics, correlation matrix and regression analysis use to analyze the data. This study leads to conclusion is that the better risk management system leads to the better performance of the banks. It’s also conclude that capital adequacy ratio, non performing loans, interest rate risk, liquidity risk and operational risk that are key drivers of the profitability for the large banking sector of Pakistan. It’s also tell us that only capital adequacy ratio and non performing loans are the key drivers of small banking sectors in Pakistan.

An Exploration of the Effect of Customer Relationship Management on Organizational Performance in the Banking Sector

The main objective of this paper is to test the linkages among customer relationship management (CRM) practices and organizational performance in Palestinian banking sector. This research relies on an online survey which was designed for gathering the data from several employees who serve in banking sector. A total of 223 responses were considered valid for data analysis using SPSS and partial least square approach (PLS-SEM). Overall, the findings verified that customer orientation and CRM organization have significant positive effects on organizational performance. The outcomes also confirmed that CRM technology and knowledge management play important roles in affecting organizational performance. These findings reveal that the current business environment requires organizations to continuously monitor and manage customer relationships effectively for achieving their long range objectives and responding to emerging challenges.

Role of banking sector performance in renewable energy consumption

To secure future universal access to modern energy, large investments in renewable energy technology are required. This paper estimates the impact of five banking sector performance indicators (return on asset, market capitalisation, asset quality, managerial efficiency and financial stability) on renewable energy consumption for a global panel consisting of 124 countries. The study used two-step system-GMM panel model to handle potential endogeneity and serial correlation. The paper considers three homogenous subpanels which are constructed based on the income group classification (high-, middle-, and low-income countries). Generally, our results show that improved banking sector performance enhances renewable energy consumption, with heterogenous effect across income group classification. For high -income (HI) countries, an increase in bank size together with improved asset quality and managerial efficiency have positive effects on renewable energy consumption. For middle-income (MI) and low-income (LI) countries, a high return on asset, an increase in bank size and financial stability are positive determinants of renewable energy consumption. We also find heterogenous effect of banking performance indicators across various renewable energy consumption types. The results highlight the importance of a well-functioning bank sector to achieve the investment in renewable energy needed to meet future energy demand and simultaneous decrease CO2 emissions.

Contribution of Financial Services Quality on Financial Performance of Banking Sector in Rwanda: A Case of Bank of Kigali Limited (BK)

The study examined the contribution of financial services quality on financial performance of banking sector taking Bank of Kigali (BK), Rwanda. Specifically, this study assessed the effects of saving quality on financial performance of Bank of Kigali Limited-Rwanda, ascertained effects of loan quality on the financial performance of Bank of Kigali Limited-Rwanda and analyzed effects of e-banking service quality on financial performance of Bank of Kigali Limited-Rwanda. The research used a cross-sectional design using both qualitative and quantitative approaches. The study target population was 320 staff members and clients of the bank of Kigali operating in the City of Kigali. The sample size was 178 respondents determined using the Slovene formula. Simple random sampling technique was used for sample selection. The findings revealed there is positive relationship between saving services quality and the financial performance of the bank of Kigali as indicated saving service quality and market share (r=.759, p =.000), increase return on investment (r=.401, p= .000); increase earnings per share (.702**; p=.000) increase customer retention (r=.708**, p=.000). It was concluded that saving service quality can explains 72.7% of the variations in financial performance and that improvement in saving service quality by one unit leads to an increase of financial performance by 0.557 units in the Bank of Kigali. Further, it was concluded that majority of the respondents appreciated the quality of loan services provided at the bank of Kigali, and that there is a strong positive relationship between loan services quality and financial performance as indicated by loan service quality and return on investment (r=.631; p=.000); earnings per share; (r= .528*, p=.000) and customer retention (r=.644*; p=.045), it was also conclude that the combined effect of the loan service quality explains 55.3% of the financial performance of the Bank of Kigali, and that increase in quality of loan provided at the BK by one unit lead to the improve 0.194 unit on the financial performance of the Bank of Kigali. It was established there is strong positive relationship between e-banking services quality and market share increase (r=.694; p=.000); return on investment (r=.729; p=.000), earnings per share (r=.121; p=.008), and that the combined effects of e-banking service quality explain 75.3% of the variations on financial performance of the Bank of Kigali. The study recommended that other commercial banks should put more emphasis on electronic banking in order to perform well. More features of electronic banking should be introduced in commercial banks to attract more customers and perform well. The government of the republic of Rwanda through the national bank of Rwanda should help commercial banks by training their staff and clients on the benefits of electronic banking. Keywords: Saving quality, loan quality, banking service quality, financial performance, Bank of Kigali-Limited, Rwanda.

The impact of the reforms of the 2000s and the Arab Spring of 2011 on the performance of the Egyptian banking sector

This paper aims to assess the current condition of the Egyptian banking sector, based on the past reforms of the 2000s. This analysis is based on data from the Central Bank of Egypt (CBE), data from the Egyptian banking sector and the literature review. The main fi nding is that despite many changes in the political and economic scene that drove the country into a crisis, the Egyptian banking sector was able to work well in the post-2008 period, achieving high growth rates. This study contributes to the academic literature on factors infl uencing fi nancial development in emerging counties, based on the analysis of the Egyptian banking.

Covid19-IBO: A Covid-19 Impact on Indian Banking Ontology Along with an Efficient Schema Matching Approach.

The exponential spread of Covid-19 is not only a serious concern for public health but has also severely affected the global economy. India is not an exception. The banking sector must plan innovatively in a wide range of scenarios focusing upon Covid-19 specific requirements. It becomes essential to examine the impact of Covid-19 on the performance of the Indian banking sector and take focused initiatives at both the tactical and the strategic levels. This paper offers the Covid-19 Impact on Banking Ontology (Covid19-IBO) that provides semantic information about the impact of Covid-19 on the banking sector of India. The developed ontology has been verified and validated and has been made available on the Linked Open Data cloud. It can be utilized to annotate the related data to provide meaningful insights. The Covid-19 ontologies already available have some overlapping information that causes redundancy. Unified integration of these ontologies is required to operate upon them unambiguously. It becomes reasonable to develop a matching approach to link all these ontologies semantically. We, therefore, also provide a schema matching approach with reasonable results to map the Covid-19 ontologies.

Monetary policy collision on the performance of banking sector in India

Purpose The study aims to identify the impact of monetary policy tools on the performance of banks in India, and this could be an excellent suggestion to the regulators in framing the favourable interest rates which would meet the macroeconomic objectives of the Indian economy. Design/methodology/approach The design adopted in this study is descriptive and analytical research. Correlation and regression analysis is used to determine the relationship between bank rate (BR) and the performance of public sector banks in India. The sample chosen for this study is the public sector banks actively performing in India. Findings The performance is measured by taking three factors, and they are deposits, loans and advances (L&A) and total asset value of the banks. All three factors have shown an impact of BR on them during the five years. L&A affected the least amongst the three factors, but the other two were significantly impacted by the change in BR by the Reserve Bank of India. So, there should be a favourable fluctuation in the BR which will bring flexibility in the banking system, and they can perform well in the economy and the central bank also can concentrate on the macro-economic situation in the country. Originality/value This paper helps in giving suggestions to the Central bank, researchers, financial institutions to look into the financial performance and monetary policy rates and the central bank also can concentrate on the macro-economic situation in the country.

Dynamic Capabilities and Their Impact on Intellectual Capital and Innovation Performance

There is a high tendency for conversion from a statistical economy based on measuring tangible assets into investigating non-tangible capital drive in the present economic status worldwide. The implications of intellectual capital on innovation performance have widely attracted attention among researchers in the global arena. The present study investigated the impacts of intellectual capital on innovation performance in the banking sector as influencing non-tangible assets. Besides, the role of dynamic capabilities in moderating the relationship between intellectual capital and innovation performance was examined. A purposive sampling technique was applied to 364 participants from Iraqi commercial banks as the research context. Thereafter, structural equation modelling (SEM) was utilised to analyse the collected data from the survey questionnaire using SPSS.v25 and AMOS.v24. The study found that the employees’ levels of intellectual capital significantly increased toward innovativeness through the moderating role of dynamic capabilities between intellectual capital and innovation performance in the commercial banking sector for better competitive advantages. Consequently, the study provides valuable insights and guidance for academicians and practitioners on the impacts of developing intellectual capital on enhancing competitive performance, especially in the context of Iraqi commercial banks.

Banking sector performance during the COVID-19 crisis.

This paper examines the impact of financial sector policy announcements on bank stocks around the world during the onset of the COVID-19 crisis. Overall, we find that liquidity support, borrower assistance programs and monetary easing moderated the adverse impact from the crisis, but their impact varied considerably across banks and countries. By contrast, countercyclical prudential measures led to negative abnormal returns in bank stocks, suggesting that markets price the downside risks associated with these policies.

Stressed assets, off-balance sheet business activities and performance of Indian banking sector: a DEA double bootstrap approach

PurposeThis paper examines the technical efficiency (TE) of Indian commercial banks during 1998–2015.Design/methodology/approachThis study uses mathematical programming-based data envelopment analysis (DEA) methodology to measure technical efficiency of Indian banks. Further, Simar and Wilson (2007) double bootstrap procedure is applied to examine the determinants of efficiency of the Indian banks, by examining the effects of various bank specific and other contextual variables.FindingsThe results indicate substantial upward bias in the conventional efficiency estimates of the Indian commercial banks. Needless to note, such upward bias is consistent with the theoretical postulates. The bootstrapped regression results show that increasing capital adequacy ratio is positively associated with bank efficiency. The popular belief that non-performing assets have a dampening effect on performance of banks is validated. Among others, ownership category is observed to be an important determining factor of bank efficiency. Specifically, state-owned banks (SOBs) are relatively lagging behind the foreign banks. Moreover, larger banks are observed to have a significantly higher level of efficiency, therefore, recent official policy initiatives toward consolidation of SOBs are validated.Originality/valueAs this study uses Simar and Wilson (2007) bootstrap approach, it enables the authors to have an estimate of the extent of bias in the traditional DEA TE scores. It also helps us drawing consistent inferences by rectifying the problem of serial correlation in the conventional second stage regression in this regard.

The Impact of Work Environment on Employees’ Performance in Banking Sector in Palestine

Purpose: Because high employee performance can lead to positive organizational outcomes, improving employee performance is one of the foremost objectives for any organization. Nowadays, since employees have an arguably greater number of job opportunities from which to choose and may, ostensibly, opt to leave unfavorable conditions in search of better alternatives, the workplace environment proves a critical factor in deciding to remain or leave any given position. Put simply, the workplace environment stands to influences employees’ levels of motivation, performance, and productivity. This study examines the effects of the work environment on employee performance in the Palestinian banking sector.
 
 Design/methodology/approach: Questionnaires were distributed among an initial 320 bank employees from a total of 14 Palestinian banks found in Palestine. Of the 320, 268 were deemed completed in a manner satisfactory to be considered primary source data. The remaining 52 surveys were improperly or incompletely populated and not calculated into the results. The data from these surveys were then analyzed using SPSS v 27.
 
 Findings: Findings indicate that the work environment correlates to a significantly positive effect on employee performance. After that, these results have provided robust and beneficial recommendations, which policymakers and banks may implement to formulate relevant strategies to manipulate the work environment and improve employee productivity.
 
 Originality: This research is the first to address the relationship between employees’ performance and the workplace environment in the Palestinian Banking sector. 

The mediating role of innovation in the relationship between organizational culture and organizational performance in Pakistan's banking sector

This study explores the mediating role of innovation in the relationship between the dimensions of organizational culture and organizational performance. The study used questionnaire data taken from 250 managers of banks in Pakistan. Structural equation modeling was used to test hypotheses. The results indicate that while the dimensions of organizational culture and innovation have a clear and positive influence on organizational performance, organizational culture and mission have an insignificant relationship with organizational performance in the presence of innovation. These results give organizations valuable insights to compete against environmental changes by effectively implementing innovations, especially in Pakistan's banking sector. The findings illustrate that mechanisms to boost an organization's innovative culture can enable the implementation of innovation, that in turn, can contribute to superior organizational performance. In extant literature, organizational culture has been examined as one of the factors that influences organizational performance. However, there is a lack of empirical studies on the relationship between organizational culture and organizational performance. Besides, as a factor of organizational performance, several investigators have considered innovation, but few have studied organizational innovation as being affected by organizational culture. This study explores the link between organizational culture, organizational performance and the role of innovation in this relationship.

Political risk and banking sector performance in Nigeria

Political risk is prevalent in Nigeria and tends to influence business outcomes and the stability of the banking system. As a result of this study, it was determined whether political risk matters to the performance of the banking sector in Nigeria. The effect of political risk on different banks’ performance measures, such as return on assets, return on invested capital, credit risk and stock price, were examined in a panel of 12 selected commercial banks for the period 2006–2018. Data was analyzed using a two-stage system of generalized method of moments. The results provided evidence that the effect of political risk on bank performance depends on the performance proxies. Specifically, political risk was found to be negatively related to banks’ returns on invested capital and positively related to deteriorating credit risk. Hence, it can be concluded that political risk induces poor banking system performance in Nigeria. The study provides a critical insight into the management of a country’s political systems in terms of their potential to create unfavorable conditions for banking systems to thrive.

A SURVEY OF LITERATURE REVIEW ON BANK PREFORMANCE

This study analyses existing literature review studies on banking sector performance. Specially, this research aim is to identify topics of interest and development niche for this vast field. The paper presents a content analyses of 14 literature review on banking sector performance studies, selected using clear and transparency methodology. The content analysis of the papers identified that themes are diverse: banking performance and efficiency analysed using the DEA (Data Envelope Analysis) method, banking efficiency and risk, banking efficiency and competition, mobile banking and bank profitability. Based on selected papers this study identified that in recent years number of systematic literature revie studies increase, in the same time traditional literature review are decreasing.

Data mining techniques for predicting the financial performance of Islamic banking in Indonesia

PurposeThe purpose of this paper is to apply various data mining techniques for predicting the financial performance of Islamic banking in Indonesia through the main exogenous determinants of profitability by choosing the best data mining technique based on the criteria of the highest accuracy score of testing and training.Design/methodology/approachThis paper used data mining techniques to predict the financial performance of Islamic banking by applying all of LASSO regression, random forest (RF), artificial neural networks and k-nearest neighbor (KNN) over monthly data sets of all the full-fledged Islamic banks working in Indonesia from January 2011 until March 2020. This study used return on assets as a real measurement of financial performance, whereas the capital adequacy ratio, asset quality and liquidity management were used as exogenous determinants of financial performance.FindingsThe experimental results showed that the optimal task for predicting the financial performance of Islamic banking in Indonesia is the KNN technique, which affords the best-predicting accuracy, and gives the optimal knowledge from the financial performance of Islamic banking determinants in Indonesia. As well, the RF provides closer values to the optimal accuracy of the KNN, which makes it another robust technique in predicting the financial performance of Islamic banking.Research limitations/implicationsThis paper restricted modeling the financial performance of Islamic banking to profitability through the main determinants of return of assets in Indonesia. Future research could consider enlarging the modeling of financial performance using other models such as CAMELS and Z-Score to predict the financial performance of Islamic banking under data mining techniques.Practical implicationsOwing to the lack of using data mining techniques in the Islamic banking sector, this paper would fill the literature gap by providing new effective techniques for predicting financial performance in the Islamic banking sector using data mining approaches, which can be efficient tools in business and management modeling for financial researchers and decision-makers in the Islamic banking sector.Originality/valueAccording to the author’s knowledge, this paper is the first that provides data mining techniques for predicting the financial performance of the Islamic banking sector in Indonesia.

A Comparative Study on Financial Performance of banking sectors

Banking sector plays a serious role within the country’s economy. The Indian banking industry is one of the quickest growing industry in India. The Indian industry has witnessed radical changes and massive growth throughout the previous couple of years. “CAMEL” ratio is calculated so as to target money performance. The CAMEL stands for Capital adequacy, Asset quality, Management, Earnings and Liquidity. The present paper explains the performance of selected banks (HDFC bank and BOB). Last 5 years are taken for this study i.e., 01/04/2015 – 31/03/2020. The study is predicated on secondary information sources and for this purpose, relevant information is collected from the Annual Report of the individual banks for the above-named study period.