Performance Of Banks Research Articles

Leveraging Innovation and Identity for Sustainable Competitive Advantage: An Analysis of Jordanian Bank Performance Drivers

Leveraging Innovation and Identity for Sustainable Competitive Advantage: An Analysis of Jordanian Bank Performance Drivers

Geopolitical risk and banking performance: evidence from emerging economies

PurposeThis study delves into the critical issue of banks' stability and profitability, which are crucial elements for fostering economic growth and preserving depositor confidence. Specifically, we scrutinize the impact of geopolitical risks on the profitability and solvency of banks operating in emerging economies across the Middle East and Africa.Design/methodology/approachEmploying a two-step Generalized Method of Moments (GMM) approach, we analyze a comprehensive dataset comprising 125 banks spanning 13 emerging economies in the Middle East and Africa, covering the period from 2003 to 2019.FindingsOur study reveals a significant sensitivity of Middle Eastern banks to geopolitical risks, wherein effective anticipation or adaptation to these risks positively influences bank performance. Conversely, the impact of geopolitical risk on African banking profitability appears inconclusive and statistically insignificant. These nuanced findings underscore the complex interplay between geopolitical dynamics and financial performance in diverse regional contexts, with implications for policymakers and industry stakeholders.Practical implicationsOur findings underscore the need for nuanced policy responses and risk management strategies tailored to the unique challenges posed by geopolitical dynamics in emerging markets. Furthermore, they highlight the importance of continued research efforts to deepen our understanding of these complex interactions and inform more effective decision-making in the financial sector.Originality/valueAmidst growing recognition of the importance of geopolitical risks in financial markets, empirical studies exploring their precise impact on bank performance remain scarce. This study fills this gap by offering a pioneering investigation into the influence of geopolitical risks on bank profitability and solvency, using advanced econometric techniques and a substantial, diverse sample of banks in emerging economies across the Middle East and Africa.

Employee training and bank stability

AbstractUsing a unique data set of Italian banks covering the 2011 to 2019 period, this study investigates the influence of human resource training on bank stability and examines whether this relationship is affected by bank efficiency and credit risk. In line with the resource‐based view (RBV) of the firm, our findings suggest that employee training exerts a positive impact on bank stability. Credit risk and bank efficiency are also identified as potential drivers in this relationship. Importantly, our results remain robust when addressing endogeneity issues and considering alternative model specifications. This study offers novel insights into the impact of employee‐related variables on bank performance. The practical implications of our findings hold relevance for both banks and regulatory authorities, as human resource training can profoundly influence the effectiveness of risk management strategies and, ultimately, the sound and prudent management of banks.

Exploring the relationship between talent management, work-life balance, and job satisfaction in state-owned banking: a mediation analysis

The objective of this study is to examine how job satisfaction mediates the relationship between talent management and work-life balance, and employee performance in state-owned banks. The analysis employed quantitative analysis and data collection approaches, namely a questionnaire issued to 127 employees using Google Forms. Performing data analysis utilising the structural partial least squares (SEM-PLS) equation model. The findings indicated that both talent management and work-life balance have a direct and substantial favourable impact on employee performance. This study also discovered that job satisfaction had a role in partially mediating the impact of talent management on employee performance. Job satisfaction somewhat mediates the impact of talent management and work-life balance on employee performance. These findings indicate the importance of consistently focusing on and enhancing talent management methods and work-life balance in order to enhance employee performance.

Revenue Diversification and Financial Performance of Commercial Banks, Kenya

Revenue Diversification and Financial Performance of Commercial Banks, Kenya

ANALYSIS OF LIQUIDITY RATIOS IN ISLAMIC BANKS IN INDONESIA

This article examines the liquidity of Bank Syariah Indonesia through financial ratio analysis in the 2018-2022 financial statements using the liquidity ratio approach. The results of the liquidity analysis of Bank Syariah Indonesia from 2018-2022, in general, can be said that the bank's performance is quite good. This can be seen from the fluctuations in the Current Ratio, Quick Ratio, and Cash Ratio achieved by the company. Keywords: liquidity analysis, Islamic banks, financial ratios,

The impact of capital on bank profitability during the COVID-19 pandemic

This study examines how various forms of capital in the years leading up to the COVID-19 pandemic affected bank profitability during the crisis in emerging economies. Using data from 819 banks in 26 countries during the 2019–2020 period, we find that banks entering the crisis with a superior capital position performed better during the pandemic. High-quality capital metrics such as Tier 1 capital and total regulatory capital ratios, not the standard leverage ratio, possess the capacity to affect bank profitability. These results are robust after controlling for Basel III liquidity requirements. We also find that the capital-profitability relationship is stronger for larger banks and for those that entered the crisis with better liquidity and credit risk position. Overall, our results imply that focusing on capital quality can help reduce the adverse effect of an external shock on bank performance.

Comparative Analysis of Financial Performance of Sharia Banking and Conventional Banking

Comparative Analysis of Financial Performance of Sharia Banking and Conventional Banking

The Impact of Audit Committees on the Financial Performance of Commercial Banks in Burundi

The Impact of Audit Committees on the Financial Performance of Commercial Banks in Burundi

Financial performance of Nigerian deposit money banks and corporate governance

Corporate governance has become a significant policy issue in Nigeria, especially with many developments such as the volatility of corporations on the Nigerian Exchange and the rise in the population of stockholders, which have increased the relevance of corporate governance measures. This study examined the nexus between corporate governance and Nigerian Deposit Money Banks’ (NDMBs) financial performances using a period from 2012 to 2019. Using a judgmental sampling technique, out of 25 NDMRs, 15 NDMRs were selected as a sample size. Secondary data were extracted from the annual reports of the selected banks. Descriptive research design and regression analysis were used to analyze the data. The findings offer empirical evidence to refute the five null hypotheses and found that the financial performance of NDMBs as measured by Tobin Q and corporate governance proxies (i.e. board meetings, the board size, CEO duality, audit committee independence, and board independence) is statistically related. This study found that the nexus between Nigerian deposit money banks’ financial performance and CEO duality is negative and significant. The nexus between Nigerian deposit money banks’ financial performance and board independence is negative and significant. Nigerian deposit money banks’ financial performance and audit committee independence have a positive and significant nexus. The nexus between Nigerian deposit money banks’ financial performance and board size is positive and significant. The nexus between Nigerian deposit money banks’ performance and board meetings is positive and significant. This study concluded that corporate governance and financial performance of NDMBs are related. AcknowledgmentWhichever contributors to this publication, both non-researchers and scholars, are much acknowledged.

The effect of external Shariah audit on the performance of Islamic banking: evidence from Bahrain and Oman

Purpose This paper aims to examine the effect of external Sharia audit on the performance of Islamic banks in Bahrain and Oman, which are countries that implement it. This study aims to explore the role of external Sharia audit in preventing prohibited profits and mitigating the risks of noncompliance with Sharia principles. Design/methodology/approach This paper opted a quantitative approach and collected data from the employees of the Sharia Supervision Board & Sharia Audit in the Islamic banks. This paper studied how external Sharia audit affects the financial profitability and compliance with Islamic Sharia principles of Islamic banks, using partial least squares structural equation modeling technique. Findings The results indicated that external Sharia audit had a significant positive effect on both financial profitability and compliance with Islamic Sharia principles in the Islamic banks under study. This means that external Sharia audit enhances the financial performance and the adherence to Islamic Sharia principles of the Islamic banks. Research limitations/implications This study has some limitations that suggest directions for future research, such as expanding the sample to other countries and measuring more performance indicators for Islamic banks. Practical implications This study suggests that external Sharia audit enhances the performance and compliance of Islamic banks and urges the regulators to adopt it and standardize it. Originality/value This study contributes to the literature on Islamic finance and external Sharia audit by providing empirical evidence on the impact of external Sharia audit on the performance of Islamic banks.

Capital Structure and Performance in GCC Islamic Banks: A Two-Stage Approach

Capital Structure and Performance in GCC Islamic Banks: A Two-Stage Approach

The impact of green finance and technology on the commercial banks’ profit and risk

This paper investigates the impact of green credit on the performance and risk of Chinese commercial banks, and also explores the impact of green technology on this mechanism. The results show that for all banks, green loan balances have a significantly negative impact on net profit. While for large, small and medium sized banks, it also reduces and increases bank insolvency risk respectively. Therefore, our findings suggest that the standard mechanism for measuring the benefits of green credit should be improved and the regulatory mechanism for green credit should be strengthened.

Does Intellectual Capital Efficiency Translate into Financial Performance for Islamic Banks in Indonesia? Evidence from the Pre-Pandemic Period

This study investigates the determinants of financial performance in Indonesian Islamic banks, focusing on the Financing to Deposit Ratio (FDR) and Capital Adequacy Ratio (CAR) as key indicators. Utilizing data from Bank Syariah Indonesia (BSI) and Bank Muamalat Indonesia (BMI) between 2016 and 2020, the research employs Ordinary Least Squares (OLS) regression analysis to examine the influence of Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE), and Capital Employed Efficiency (CEE) on FDR and CAR. The findings reveal that while CEE has a statistically significant negative relationship with FDR, the model for CAR lacks a statistically significant fit. This research contributes to understanding the role of intellectual capital in Islamic banking performance and offers insights for stakeholders in the Indonesian Islamic finance sector, with implications for the post-pandemic era.

Effect of Net Interest Margin on Financial Performance of Deposit Money Banks in Nigeria

The study investigated the effect of net interest margin on financial performance of deposit money banks in Nigeria. The researcher developed four specific objectives, four research questions and four hypotheses that guided the study. The research design employed was ex post facto. This design is selected and implemented due to the researcher's lack of control over the various elements of the design. The data for this study is preexisting, therefore it is utilized for a secondary data analysis. The study's population comprised twenty-two (22) designated deposit money banks in Nigeria. This study employed the judgmental sampling technique. The sample size is made up of two (2) DMBs which includes United Bank for Africa Plc, Fidelity. The data for this study were obtained from the published financial statements of the chosen publicly traded deposit money banks in Nigeria. This study employed an estimated technique that involved the use of descriptive statistics and Ordinary Least Squares (OLS) regression analysis. The E-view-9 software was utilized to carry out the analysis. The study established that net interest margin is statistically significant and has a positive effect on operating income (OI). The researchers suggested that Banks should monitor and manage the duration gap between assets and liabilities, considering potential interest rate changes and the bank's risk appetite. Banks should explore opportunities to diversify income sources by offering a broader range of financial products and services, such as wealth management, insurance, and asset management.

A comparative study on bank income diversification: which non-interest income component is beneficial?

PurposeThis paper aims to conduct a comparative study on the impact of income diversification and the main non-interest components on banks’ financial performance and risk-adjusted profitability in China and Egypt.Design/methodology/approachThis study uses both static and dynamic panel regression analyses on a sample of Egyptian and Chinese banks from 2009 to 2022.FindingsIncome diversification yields positive effects on bank profitability in Egypt and China. Trading income consistently exhibits a significant positive influence on bank profitability in both nations. Conversely, fee-based income positively impacts bank profitability in China, whereas in Egypt, this effect is observed under dynamic-based regression models. On the contrary, income diversification does not consistently increase risk-adjusted profitability in both countries, especially Egypt.Originality/valueTo the best of the authors’ knowledge, this is the first study to examine the impact of income diversification on Egyptian bank performance while identifying the most significant non-interest income components. In addition, the comparative analysis conducted in this study reveals the positioning of China, the largest economy among emerging countries, in terms of the degree of income diversification, its impact on bank profitability and the extent to which non-interest income components contribute to bank profitability when compared with Egypt, representing an emerging country characterised by different levels of bank market power, financial infrastructure and expertise. Findings hold significant implications, suggesting that bank managers and policymakers should prioritise diversifying income sources, particularly through fee-based services and trading activities in China, and trading activities in Egypt, to enhance financial profitability.

Effect of Interest Rate Spread on Performance of Commercial Banks in Kenya

Effect of Interest Rate Spread on Performance of Commercial Banks in Kenya

Pengaruh Tata Kelola Syariah Terhadap Kinerja Bank Syariah Dan Kepatuhan Syariah

The aim of this research is to collect empirical data regarding the influence of sharia governance on sharia bank performance and sharia compliance at Bank Syariah Indonesia in Semarang City. Sharia compliance and governance are important components of risk management in Islamic banks. By providing guidance and supervision to sharia bank operations so that they consistently adhere to sharia principles, DPS plays an important role in maintaining sharia compliance. Sharia principles, sharia compliance, and observing sharia compliance are generally mandated for sharia banks. This research uses quantitative research methodology. The population of this research is Bank Syariah Indonesia employees who meet the specified requirements. The Slovin formula was used to determine the research sample, namely 36 people. Questionnaires were used to obtain data. In contrast, this research data analysis uses direct linear regression. The results of the first t test show that the tcount value is 5.870 > ttable of 1.688, the significant value is 0.000 <0.05, and the governance regression coefficient value is positive, namely 0.051. The results of the second t test show that the tcount value is 3.104 > ttable of 1.688, the significant value is 0.004 <0.05, and the governance regression coefficient value is positive, namely 0.046. Research findings show that sharia governance has a positive and significant impact on sharia bank performance and sharia compliance at Bank Syariah Indonesia in Semarang City.

Leveraging Digitalization and Servitization to Improve Financial Performance: An Empirical Analysis

This research investigates the interplay between digitalization, servitization, and Corporate Social Responsibility (CSR) in influencing the financial performance of Pakistani banks. The study addresses a critical gap by examining how these factors combine to impact bank profitability in the contemporary landscape of digital transformation and evolving customer demands. A quantitative approach is employed, utilizing survey data collected from branch managers in Pakistani banks. Standardized scales measure digitalization, servitization, CSR, and bank performance. The findings demonstrate a positive direct effect of digitalization on bank performance. Furthermore, servitization strengthens this positive impact, suggesting that banks offering a comprehensive suite of services alongside traditional products achieve superior financial outcomes. Notably, the study reveals no significant short-term contribution of CSR to a bank's financial performance. Thus, the study sheds light on the crucial role of servitization in amplifying the positive effects of digitalization on bank performance. By strategically integrating services with products, banks can leverage digital technologies to become more data-driven and enhance their financial health.

Research on the Impact of Digital Transformation on Commercial Bank Performance

This paper takes 60 commercial banks undergoing digital transformation from 2015 to 2021 as samples and uses the Peking University Digital Transformation Index to empirically test the impact of digital transformation on commercial banks’ operating performance. The results show that: Digital transformation has a positive impact on the business performance of commercial banks; the impact of digital transformation on the operational performance of commercial banks of different sizes is heterogeneous. At present, the digital transformation of China’s commercial banks is still in the initial stage, and there is a lack of successful experience in the direction and measures of transformation, which plays a certain reference role for the future development of commercial banks.