Performance Of Banks Research Articles

Risk-based regulation and supervision of second-tier banks: experience of EU countries

The aim of the study was to determine the impact of increased capital adequacy standards of second-tier banks on their performance. The study is based on second-tier banks of EU member states, as these countries are the first to implement the Basel Committee recommendations, so their experience should be studied and taken into account when building risk-based regulation of second-tier banks of Ukraine and Kazakhstan. The study covers the period of 2009–2022, as the Basel III regulations were adopted after 2008, and they began to operate for the second-tier banks of EU member states in 2013. The study was conducted using econometric modelling with an analysis of the dependence of banking indicators on the capital structure established by Basel III. Functional interrelationships of the dependence of Net Interest Income, Profit, Return on Assets, Return on Equity, Risk Costs to Operating Income were tested. The impact of capital adequacy requirements on the performance of second-tier banks was determined: capital adequacy requirements have a positive impact on net interest income and profit of second-tier banks. The obtained results can be used to substantiate increasing capital adequacy requirements to increase the reliability of the banking system as an element in the system of factors of economic growth of the national economy.

Bank-specific and Macroeconomic Determinants of Commercial Banks Profitability in Kenya

This study focuses and examines the impact of bank-specific factors and macroeconomic determinants on the financial performance of commercial banks listed on the Nairobi Securities Exchange (NSE) during the period spanning from 2011 to 2020. The research is anchored on transaction cost economic theory with financial panel data methodology. In the pursuit of study objective, the study employed pooled ordinary least squares (OLS) estimation method combined with fixed effect model to account for individual-specific characteristics that may not be directly observable but are likely to impact the dependent variable. The research findings reveal that bank assets, bank capital and debt ratio have a positive impact on bank profitability while bank concentration has a negative effect. Notably, inflation rate, lending rate and tax rate were insignificant in relation to rate of return on equity among the selected banks in NSE. The study recommends that banks should prioritize efficient capital allocation and diversify their business lines and offerings. Therefore, banks should give thought to the implementation of strategic asset management as a means to optimize their asset allocation, as it can contribute to increased profitability through diversification and efficient asset utilization.

The Impact of Technological Innovations on Bank Performance in Emerging Economies

On a global scale, technological innovations have achieved great success in the process of economic development of national economies, especially in the banking sector. Technological innovation is largely used by the banking sector to create competitive intelligence and competitive advantage, as it helps banks improve their services and cost efficiency, as fewer employees and fewer traditional branches are needed. However, this current study focused on examining the impact of technological innovation on bank performance in 40 emerging markets from 2000 to 2021. Findings from the correlation results show that there are strong positive correlations between technological innovation and bank performance in emerging markets. Similarly, we also find the existence of cointegration between technological innovation and bank performance and the existence of a long-run relationship between technological innovation and bank performance in emerging markets, as implied by the results of tied tests. Our study also found from ARDL and GMM results that there are long-term significant relationships between technological innovation and emerging market bank performance. After making these discoveries, we recommended policies such as improving the technology hub of emerging markets and extending banking services to emerging markets' underbanked populations living in remote areas using technology tools to improve bank performance in emerging markets.

Mergers and acquisitions in OIC countries: the role of strategic similarity in bank performance

Purpose - This research aims to evaluate the impact of strategic similarity on MA performance in banking within OIC countries. The study investigates how strategic alignment influences MA outcomes and explores the role of cultural fit, cross-border factors, and capital adequacy in shaping post-merger success.Method - A quantitative approach is used in this study, using secondary data from annual reports of banking institutions in OIC member countries that experienced mergers and acquisitions from 2013 to 2022. This study uses 38 MA transaction data obtained from Bank Focus. The hypothesis is tested using a partial least squares structural equation model.Result - The finding reveals that the strategic similarity factor could not explain the success of MA performance for both Islamic and conventional banks. Cultural misalignment and cross-border regulatory issues are key factors affecting post-merger success. The one-year observation period was too short, but capital adequacy was found to influence performance significantly.Implication - Theoretically, models of MA success should include cultural and regulatory dimensions and consider a longer-term view. Managers should prioritise cultural integration, address regulatory challenges, and align capital adequacy strategies to improve post-merger outcomes and resilience.Originality - This research discussed the factors determining successful MA performance in banks in OIC countries. The findings can be used to develop insights into mergers and acquisitions in the banking sector.

A BRIEF ANALYSIS OF THE BANKING INDUSTRY IN INDIA

This research paper explores the evolution and current dynamics of the Indian banking sector, focusing on the role of digital transformation and the performance of public, private, and foreign banks. Focusing mainly on the decadal data from 2013 to 2023, the study analyzes the growth of bank assets, the Credit-Deposit (C-D) ratio, and the penetration rate of online banking. The findings demonstrate that the banking sector in India has undergone significant changes, with technological advancements driving increased efficiency and customer reach. Public sector banks faced challenges due to non-performing assets (NPAs), while private sector banks showed robust asset growth, recovering quickly from the economic impact of the COVID-19 pandemic. Foreign banks also displayed resilience, with steady growth in assets. The research highlights the critical role of digital banking in modern banking services, contributing to financial inclusion and economic growth. KEY WORDS: public, private, foreign, assets, Credit-Deposit ratio, online banking

Assessing the Effect of Strategic Alliances on Organizational Performance of Commercial Banks in Nigeria

This study was carried out to examine the effect of Strategic Alliances on Organizational performance of commercial banks in Nigeria. The study adopted a cross-sectional survey design with primary data generated through self-administered questionnaire. The population for this study was five (5) commercial banks in South-South, Nigeria. The study however focused mainly on their regional offices located in Asaba, Delta State, Nigeria. Six regional managers for each bank were used as the study respondents giving a total of 30 respondents. Census sampling was adopted since the study sample was small. The reliability of the instrument was achieved by the use of the Cronbach Alpha with all the items scoring alpha coefficient above 0.70. The hypotheses were tested using the spearman rankorder correlation co-efficient with the aid ofstatistical package for social sciences (SPSS). The tests were carried out at a 95% confidence interval and a 0.05 level of significance. The study findings revealed that there is a significant relationship between strategic alliances on revenue performance, cost efficiency performance and on the profitability of commercial banks in South-South, Nigeria. The study recommends that commercial banks should invest in modern technologies to effectively integrate all the banks functions and activities to minimize operational costs. The top management team should invest more on financial innovations so that customers will have a wide scope of banking products to choose from leading to customer satisfaction and improve value addition which in turn enhances financial performance.

An Analysis of Performance, Efficiency, and Sustainability in Islamic Banks Using Bibliometric Methods

The Performance, Efficiency, and Sustainability in Islamic Banks literature was thoroughly reviewed using a bibliometric approach that gathered 1,031 publications from Scopus-indexed journals published between 2008 and 2023. We sorted nations, institutions, sources, papers, and writers by performing an exhaustive data analysis using a suite of tools, including Excel, RStudio, and VOSviewer, to determine who has made the most significant contributions to the field of performance, efficiency, and sustainability in Islamic banks. Particularly after 2020, this study showed a dramatic increase in publishing rates. Important areas of study included Islamic banking and finance, Islamic finance and economic growth, Islamic finance and financial crises, and Islamic finance: performance and efficiency. Authors hailing from the US, UK, and Malaysia rose to the pinnacle of their fields quite quickly. Stakeholders may use these findings to inform their decision-making, particularly about the potential impact of performance, efficiency, and sustainability in Islamic banks.

Interest Rates Risk and Financial Performance of Commercial Banks in Kenya

Interest Rates Risk and Financial Performance of Commercial Banks in Kenya

Boardroom tenure, financial expertise and bank performance: a nonlinear dynamic framework

ABSTRACT This research investigates the influence of boardroom tenure and financial expertise on US bank performance in a nonlinear dynamic framework. To this aim, we utilize a sample of 305 banks during the 2010–2021 period, and we implement three empirical methodologies: GMM analysis, threshold technique, and quantile approach. Our findings reveal that the individual and interaction effects of boardroom financial expertise and tenure on bank performance are positive. Also, we provide evidence of an inverted U-shaped relation between boardroom tenure and bank performance, and between the board’s financial expertise and bank performance. Moreover, threshold analysis shows the presence of threshold effects in the relationship between boardroom tenure, expertise, and performance. Quantile results demonstrate that boardroom financial expertise improves the performance of high-performing banks. In contrast, boardroom tenure enhances the performance of low-performing banks but diminishes the performance of their high-performing counterparts.

Corporate governance and financial performance of Islamic banks: new international evidence

Corporate governance and financial performance of Islamic banks: new international evidence

The Influence of Loan at Risk and Bank Spesific Variables on The Profitability of Commercial Banking in Indonesia Based on Core Capital: Period 2015 to 2022

This research aims to examine the influence of loan at risk (LAR) and other specific bank variables, namely size, leverage, and capital, on the profitability of commercial banks in Indonesia based on the classification of core capital set by banking authorities. The study utilizes panel data regression with a balanced fixed-effect model from a sample of 67 examined commercial banks, both in aggregate and based on the core capital classification of each bank, covering the research period from 2015 to 2022. The results indicate that the credit asset portfolio with LAR quality significantly affects the profitability of commercial banks negatively, both in terms of ROA and ROE, applying to the entire group of commercial banks studied. Meanwhile, other specific variables have varying degrees of influence and significance. Collectively, the independent variables in all research models have a significant impact on the profitability of all commercial banks in Indonesia. The findings of this study can contribute to the reference for bank management and other stakeholders in assessing the profitability performance of commercial banks, as well as expanding the literature in the field of banking.

THE IMPACT OF GREEN FINANCE ON BANKING PERFORMANCE IN INDONESIA

Green Finance refers to financial practices that can be described through financial services and products that take environmental sustainability to support sustainable development. The role of green finance is to connect financial goals with the environment to encourage inclusive economic growth. One form of green finance implementation is in financial institutions, especially banking. This study aims to analyze the impact of green finance implementation in the banking sector on banking performance as proxied by the profitability ratio in the 2018-2022 period. The Generalized Method of Moments (GMM) dynamic panel is used. The Green Daily Operation (GDO) and Green Finance Policy (GFP) variables indicate the implementation of green finance in banking. Other independent variables use banking performance ratios consisting of the capital adequacy ratio, non-performing loans, and the bank's operational efficiency ratio. The study results show that green finance represented by implementing GFP can increase profitability, while GDO does not significantly affect banks' profitability in Indonesia. Furthermore, the internal banking ratio that is not significant to profitability is the capital adequacy ratio, while increasing non-performing loans and operational efficiency ratio significantly negatively impacts bank performance because it reduces profitability. This research supports applying the green concept in the banking sector to improve sustainable bank performance.

Measurement of the Financial Performance of Banks for Development and Investment in Türkiye by CAMELS Analysis

Using the CAMELS analysis approach, this study examines the financial performance of banks operating in Türkiye for development and investment. Accordingly, a comparative performance evaluation has been conducted using the financial data of 12 banks for development and investment, comprising three state-owned, seven privately owned, and two foreign-owned banks, for 2020-2022, with 22 financial ratios. At the end of the analysis, it was observed that Golden Global Investment Bank Inc. exhibited the best financial performance in 2020, Diler Investment Bank Inc. in 2021, and GSD Investment Bank Inc. in 2022, among the other banks for development and investment. The worst financial performance, however, was demonstrated in all three years by BankPozitif Credit and Development Bank Inc.

Liquidity Transformation and Fragility in the U.S. Banking Sector

ABSTRACTLiquidity transformation, a key role of banks, is thought to increase fragility, as uninsured depositors face an incentive to withdraw money before others (a so‐called panic run). Despite much theoretical work, however, there is little empirical evidence establishing this mechanism. In this paper, we provide the first large‐scale evidence of this mechanism. Banks that engage in more liquidity transformation exhibit higher fragility, as captured by stronger sensitivities of uninsured deposit flows to bank performance and greater levels of uninsured deposit outflows when performance is poor. We also explore the effects of deposit insurance and systemic risk.

The Influence of Service Quality and Customer Satisfaction on Customer Loyalty of BCA Mobile in Bandar Lampung

PT. Bank Central Asia, Tbk, founded in 1957, is one of the largest private banks in Indonesia today with an asset value of 1,408 trillion rupiah with a net profit of 48.6 trillion rupiah. The results of the Bank Service Excellence Monitor (BSEM) survey conducted by Marketing Research Indonesia (MRI) in the 2020-2021 edition produced data that BCA Mobile was ranked second and the 2023-2024 edition was ranked fifth in the 10 best mobile banking performances in Indonesia. The problem in this research is that there has been a decline in BCA Mobile's performance followed by many complaints about the use of the BCA Mobile application, which has become a trending topic on the X social media platform (Twitter). BCA Mobile must attention to this so that customers do not think about looking for alternatives to other mobile banking. The aim of this research is to test whether service quality and customer satisfaction have an influence on BCA Mobile customer loyalty in Bandar Lampung City. This research uses a survey method by distributing questionnaires to 90 respondents via Google Form. The analytical method used is simple regression using the partial test (t test) and Sobel test with the SPSS 25 application. The results of the research show that the service quality variable and customer satisfaction variable have an influence on the BCA Mobile customer loyalty variable in Bandar Lampung City.

Emotional Intelligence and Organizational Performance in Commercial Banks in Uyo Metropolis, Akwa Ibom State

The study was designed to examine the relationship between Emotional Intelligence and Organizational Performance in commercial banks in Uyo Metropolis of Akwa Ibom State. A cross-sectional survey was adopted for the study and a sample of 162 respondents was drawn from the population of 271 using Taro Yamane’s scientific sampling technique. For the objectives of the study to be achieved, two hypotheses were formulated and tested. The study utilized structured questionnaire and interview as the major instruments for data collection. 162 questionnaires were distributed and 135 were returned. Data were collected and analyzed using simple percentage and ordinal logistic regression. Results showed that there is a significant and positive relationship between variables of emotional intelligence such as self-control, self-management and, and employee performance in commercial banks in Uyo Metropolis of Akwa Ibom State. It was recommended that, self-control should be sustained by bank employees by continually developing the capacity to alter their thoughts, feelings, and behaviors to align them with organizational goals to enhance performance as well as developing the capacity to manage emotions as one of the major determinants of harmonious relationship among members in an organization.

Customer Perception of Financial Performance of the State Bank of India and Its Associate Banks Before and After the Merger

This study explores customer perceptions of the financial performance of the State Bank of India (SBI) and its associate banks before and after their merger. The primary objective is to evaluate the financial performance of SBI and its associates, comparing pre- and post-merger scenarios. The study hypothesizes that customers perceive the performance of SBI post-merger to be significantly better than before the merger. A descriptive and analytical approach was employed, utilizing primary and secondary data. Primary data was collected through a structured questionnaire distributed among bank employees across various SBI branches in Karnataka. The data was analyzed using SPSS software, employing descriptive statistics such as mean, standard deviation, and percentage to assess the impact of the merger on SBI's performance. Advanced statistical methods were also applied to test the hypotheses, including Factor Analysis, Linear Regression, Pearson Correlation, Chi-Square Test, and One-way ANOVA. The results indicate significant improvements in customer perceptions of SBI's performance post-merger, affirming the hypothesis. This study provides a comprehensive analysis of the effects of the merger on SBI's financial performance, highlighting the importance of customer perception in evaluating the success of such corporate restructuring efforts.

How artificial intelligence incidents affect banks and financial services firms? A study of five firms

We investigate the impact of AI incidents on banking and the financial industries. By analyzing five U.S. banks and financial services firms, we find that the average short-term Cumulative Abnormal Returns (CARs) loss of AI incidents is -21.04 % and the negative impact can spread out to the financial industry with a three-day loss of -0.13 %. Compared to firms without AI incidents, banks and financial services firms with AI incidents have higher bankruptcy risk and lower operational cash flows. To our knowledge, this is the first study analyzing the AI incident impact on the performance of banks and financial services firms.

A Study on Equity Analysis with Reference to Banking Sector

The main aim of the study is to identify the growth trend script of banking in equity market. Investment decisions are important, enabling investors to learn more about risk. As the Indian economy has opened doors for MNC, the Indian banking industry is seeing dramatic changes and stiff competition. The study is only going to cover selected three nationalized and three private banks in India. Foreign Banks have been excluded from the study. The time period of study is limited from April 2021 to March 2024 to know exact impact of financial and equity performance of banks. This report presents fundamental analysis and technical analysis of top banks and a comparative study of selected banks. SBI from nationalized bank and HDFC Bank from private sector are most performing companies. The Primary data is used to understand relevance of equity market in context of bank. Secondary data in research are presented via tabulations and graphs based on percentile method. The frame of various observation and suggestions are shared in the subsequent research work.

Analisis Kinerja Keuangan Bank BUMN dan Bank Swasta Indonesia: Studi Komparatif

Purpose: This study assesses and compares the financial performance of state-owned and private banks in Indonesia from 2019 to 2021. This study focuses on evaluating key financial indicators to monitor the financial structure and efficiency of banking institutions continuously amid increasing competition in the banking sector. Methodology: This study utilizes several financial ratios and applies independent sample t-tests to analyze the financial performance of state-owned and private banks. The key ratios analyzed include (Equity to Total Assets Ratio), ECTAR (Equity to Customer Assets Ratio), IMAEAR (interest margin to average earnings assets ratio), LLCR (Loan Loss Coverage Ratio), DTCR (Debt to Capital Ratio), LDR (Loan to Deposit Ratio), and CAR (Capital Adequacy Ratio). Results: State-owned banks are financially weaker than private banks. Furthermore, there is no significant difference in the average financial performance of state-owned and private banks when measured using EATAR and ECTAR ratios. However, clear differences are observed between these two banking groups in terms of the IMAEAR, LLCR, DTCR, LDR, and CAR ratios. Limitations: This study is limited to the analysis of financial performance from 2019 to 2021, which may not fully capture long-term trends or the impact of external economic conditions, such as global financial crises or regulatory changes. Additionally, this study focuses only on a specific set of financial ratios. Contribution: This study contributes to the body of knowledge by providing a comparative analysis of the financial performance of state-owned and private Indonesian banks. It offers valuable insights for banking institutions, regulators, and investors on how financial performance differs across banking groups, highlighting areas where state-owned banks may need to improve their financial strength.