State-owned Commercial Banks Research Articles

Can foreign ownership reduce bank risk? Evidence from Vietnam

This study investigates the impact of foreign ownership on bank risk in Vietnam between 2006 and 2015. Our findings show that foreign ownership can lower bank risk, suggesting that the State Bank of Vietnam should further remove restrictions on foreign investments in the banking system. The findings also indicate that higher bank risk is associated with greater technical efficiency, suggesting that the skimping-cost hypothesis may exist. The same conclusion is true for large banks, for banks with higher liquid assets and those with greater loan growth. Also, the findings demonstrate that assets diversity may reduce bank risk, suggesting that Vietnamese banks should diversify their assets from loans towards derivatives and other earning assets to improve banks’ stability. Finally, our findings demonstrate that a less concentrated market can lower bank risk, suggesting that the future mergers and acquisitions in Vietnam that involve a state-owned commercial bank should be approached with caution.

Analysis of Financial Distress Using Altman Methode (Z-score) in Bank Umum Milik Negara (BUMN)

The purpose of this study was to analyze bankruptcy using the Altman (Z-Score) method at State-Owned Commercial Banks (BUMN). The results showed that PT. BRI (Persero) Tbk with a condition that is not bankrupt or healthy in 2015 and 2016 the Z-score is 3,404 and 3,341. In 2017 the Z-score is 2,099, in 2018 it is 1,901 and in 2019 it is 2,057 which means it is included in the gray area (it is in growth zone). PT. BNI 46 (Persero) Tbk in 2015 obtained a Z-score of 4.213, meaning that it is not in a state of bankruptcy or health. In 2016 the Z-score was 1.622, 2017 was 1.702, in 2018 it was 1.578 and in 2019 it was 1.388, this means it is included in the gray area (in the growth zone). PT. Bank Mandiri (Persero) Tbk, in 2015 obtained a Z-score of 1,985, in 2016 was 2,074, in 2017 it was 1,914, in 2018 it was 1,818 and in 2019 it was 1,943, this means it is included in a gray area or in a growth zone. PT. BTN (Persero) Tbk in 2015 obtained a Z-score of 1.659, meaning it is included in the gray area (in the growth zone). In 2016 the Z-score was 0.932, 2017 was 0.962, 2018 was 0.835 and 2019 is 0.912, this shows that PT. BTN (Persero) Tbk has the potential to go bankrupt.

The Impact of Credit Risk Management Indicators on Profitability Attributes: Evidence from the State-Owned Commercial Banks in Bangladesh

The focal attempt of this research is to identify the consequence of credit risk management indicators on profitableness attributes of state-owned commercial banks functioning in Bangladesh. To attain the objectives of this research study researcher has analyzed four sample banks’ audited annual reports covering the period 2012 to 2016. The study has employed the ANOVA technique, multiple regression model, and correlation matrix to reach the concluding remark as per study objectives. The findings revealed that there is significant and insignificant variation as well as relationship in the different indicators of credit risk management but there is insignificant variation in the different attributes of profitability in the midst of the sample banks within the study period. Furthermore, there is the insignificant impact of the different indicators of credit risk management namely loan and advance, classified loan, unclassified loan, leverage ratio, bad debt, default ratio, cost per loan asset, and cost to income ratio on profitability attributes such as return on assets, return on equity along with net profit percentage of the sample banks over the study period. Hence, the study has recommended that the management of the banking sector should emphasize creating a smart credit management policy as well as lending guidelines to formulate the suitable credit risk management practice to meet the demand of loans applicants properly.

Green Banking and Sustainable Development in Bangladesh

Financial institutions can make a significant contribution to sustainable economic development. Characterized as “green banking,” banks can foster environmentally friendly practices as well as socially responsible business practices. This study explores the adoption pattern of various green banking activities by different types of banks in Bangladesh between 2014 and 2019, and the extent of banks' contribution to achieving sustainable development in the country. The secondary data used in the study reveals that many commercial banks (private and foreign) have been practicing green banking since 2014 and have instituted green financing policies that are environmentally friendly and sustainable. However, the state-owned commercial and specialized development banks have been more reluctant to adopt green banking practices. The study proposes a framework for adopting green banking practices that will contribute to attaining the Sustainable Development Goals (SDGs), along with policy changes to align banking operations with the SDGs.

STUDY ON THE MANAGEMENT OF NEW GENERATION EMPLOYEE SEPARATION IN STATE-OWNED COMMERCIAL BANKS: TAKE X BANK AS AN EXAMPLE

After China’s financial industry having entered into rapid development with China’s accession to the WTO, joint-stock commercial banks have also risen in various places, and the number of branches established by foreign banks in China has gradually increased, showing that they were once monopolized as China’s financial industry continues to reform and develop. The status of the four state-owned joint-stock commercial banks has been shaken.
 This paper focuses on the definition and characteristics of the new generation of employees, using Bank X as an example, the current development of Bank X and the current development of the new generation of Bank X employees, and the negative impact of the new generation of Bank X employees after their departure. A comprehensive analysis of the reasons for their resignation was conducted, and on this basis, the countermeasures were put forward to reduce the turnover rate of the new generation of employees in state-owned commercial banks, hoping to provide a proper resignation management plan, so that Bank X can proceed from its own reality and strengthen the state-owned company. The commercial bank management and construction adopt corresponding strategies to reduce the turnover rate of the new generation of employees and stabilize the countermeasures of talent team building.

ANALISIS PENYALURAN KREDIT PADA BANK UMUM BUMN TAHUN 2011-2020

Credit distribution activities have a very important role for the economy, namely to support development and to improve the welfare of the community, while for banks the main source of income comes from lending activities. The purpose of this thesis research is to determine the Effect of Third Party Funds, Net Interest Margin and Capital Adequacy Ratio on Credit Distribution at State-Owned Commercial Banks in 2011-2020. The data analysis technique used is Multiple Regression Analysis using panel data. The results obtained by the researchers are Simultaneously TPF, NIM, and CAR have an effect on Credit Distribution with significant results. while partially Third Party Funds (TPF) have a positive and significant effect on Credit Distribution. This is indicated by the regression coefficient value of 0.9872 and the probability value of 0.0000. Net Interest Margin (NIM) has a positive and insignificant effect on Credit Distribution. This is indicated by the regression coefficient value of 0.0043 and the probability value of 0.5706. And the Capital Adequacy Ratio (CAR) has a positive and insignificant effect on Credit Distribution. This is indicated by the regression coefficient value of 0.0055 and the probability value of 0.1214.

Determinants Affecting Profitability of State-Owned Commercial Banks: Case Study of China

The study examines the relationship between internal determinants, external determinants and the profitability of state-owned commercial banks. We use pooled regression, fixed effect, and random effect models on the case of the top five Chinese state-owned commercial banks from 2007 to 2019. The results show that internal factors, measured by size, credit quality, and liquidity, significantly positively influence banks’ profitability. State-owned banks that have larger sizes, higher credit quality, and higher liquidity have accordingly higher profitability than other banks. On the contrary, the external factor, measured by the natural logarithm of GDP, negatively influences banks’ profitability. The decrease in GDP leads to higher profitability of state-owned commercial banks in China. Our results provide insight into the profitability of state-owned commercial banks, considering the latest changes in the Chinese banking industry.

Employee Motivation in Vietnamese State-Owned Commercial Banks

Understanding the important of employee motivation in enhancing human resource quality as well as organization effectiveness, Vietnamese State-Owned commercial banks (SOCB) have applied different employee motivational policies. However, these policies haven’t been highly effective and effeciency cause of lacking understanding about factors affecting employee motivation. This study aims to identify and measure factors influencing employee motivation in Vietnamese SOCB applied expectancy theory and suggest recommendations to enhance their employee motivation. Data were collected from sending questionnaires to 4 biggest Vietnamese SOCBs. Cronbach’s alpha, Exploratory Factor Analysis (EFA), Linear regression were employed for analyzing and processing data. The results show that Expectation (E); Intrinsic rewards (INI); the employee anticipated satisfaction with intrinsic rewards (VI) have positive impact on employee motivation in SOCB. Based on the findings, some recommendations are proposed for SOCBs to improve employee motivations.

IMPLEMENTASI MANAJEMEN RISIKO TERHADAP PROFITABILITAS PADA BANK UMUM BUMN YANG TERDAFTAR DI BURSA EFEK INDONESIA PERIODE 2010-2019

Banks in achieving their profitability will certainly be faced with various risks, risk management is a logical and schematic method in identifying, quantifying, determining attitudes, determining solutions, and monitoring and reporting risks that occur in each bank business activity.
 The purpose of this study is to determine the influence of credit risk (NPL) and market risk (NIM) on bank profitability (ROA). This research is conducted at state-owned commercial banks listed on the IDX for the period 2010-2019.
 The method used in this research is quantitative and the source of the data in this study is obtained from secondary data with a sample size of 4 banking companies, namely Bank Negara Indonesia, Bank Rakyat Indonesia, Bank Tabungan Negara and Bank Mandiri.
 The results of this study indicate that the credit risk free variable (NPL) has a negative but significant influence. The market risk variable (NIM) has a positive and significant influence on profitability with a regression coefficient value of 0.466 with a significant level of 0.000. The coefficient of determination shows that the contribution of the influence of the variable credit risk (NPL) and market risk (NIM) to profitability (ROA) is 87.3%, while the remaining 12.7% is influenced by other factors that are not included in the regression model.

The Effect of Market Power on Bank’s Net Interest Margin: The Moderating Role of Financial Access

The research focuses on determining the effect of commercial bank’s market power on net interest margin and the moderating role of financial access. The study uses annual data of 33 commercial banks in Indonesia from 2012 to 2019 based on the category of State-Owned Commercial Banks and National Private Commercial Banks. The data is obtained from secondary data, using financial reports published by commercial banks. The data is analyzed using moderated regression analysis to estimate two models, basic model is used to estimate the effect of market power on net interest margin, while the interaction model is used to estimate the moderating effect of financial access. Market power was measured using the Lerner index of each bank. Financial access was measured by the number of branches and the availability of electronic banking channels such as mobile banking, internet banking, and digital branch. The results show that the increase in commercial bank’s market power significantly increases net interest margin. Other results also show that branch and mobile banking & internet banking significantly moderate the effect of market power on the net interest margin, while the digital branch is not significantly moderating the relationship between market power and net interest margin.

The Perception of Determinants Affecting the Effectiveness of Internal Audits in Vietnam Commercial Banks

Internal auditing and the effectiveness of the internal audit have recently attracted attention from practitioners and researchers because the internal audit function has shifted its focus from ensuring compliance in internal processes to consulting, recommending, and creating added values for an organization. This research explores the determinants affecting the effectiveness of internal auditing of commercial banks, then assesses the perception of personnel working for Vietnamese commercial banks. The literature review method is used to indicate the effectiveness of measurement criteria and factors affecting the effectiveness of internal auditing. In addition, an expert in-depth interview and survey is employed to assess the perception of personnel working for Vietnamese commercial banks. The research findings show that for Vietnamese commercial banks, the perception of the effectiveness of internal auditing and the factors affecting the effectiveness is significantly different among three groups of banks, namely: State-owned commercial banks, State joint-stock commercial banks, and joint-stock commercial banks.

Evaluation and Application of Cloud Model Controller in Financial Technologies in the Age of Big Data

Financial innovation is of great significance to the long-term and stable development of commercial banks and the entire financial market. Reasonable and effective innovation under the current changing financial situation is of great significance to the development of the overall banking industry and financial market, but to varying degrees and Different ways of innovation often produce different results. The article uses the cloud model to comprehensively evaluate the financial innovation indicators of the five state-owned commercial banks. By taking into account the characteristics of ambiguity and randomness, and using the characteristics of the cloud, the evaluation results are more objective and authentic.

The impact of fintech on the profitability of state-owned commercial banks in China

Fintech is the innovative use of technology in the design and delivery of financial products and services. This study aims to statistically investigate the fintech and other determinants that affect the profitability of six state-owned commercial banks (SOBs) in China using the data from the 2014-2019 period. Theoretically, fintech serves as a disruption for its banking services through adverse impacts on asset business, liquidity business and intermediary business. Empirically, the result shows that the development of fintech has a negative impact on the profitability of SOBs and the regression results from the OLS estimation, the FGLS estimation, the Prais-Winsten estimation and the FE estimation are compared to ensure the validity of the statistical inference.

The impact of gross domestic product on the financing and investment efficiency of China\u2019s commercial banks

China’s commercial banks have developed at a very rapid speed in recent decades. However, with global economic development slowing down, the impact of gross domestic product growth as an exogenous factor cannot be ignored. Most existing studies only consider the internal factors of banks, and neglect their external economic factors. This study thus adopts an undesirable dynamic slacks-based measure under an exogenous model in combination with the Kernel density curve to explore the efficiency of state-owned commercial banks (SOCBs), joint-stock commercial banks (JSCBs), and urban commercial banks (UCBs) in China from 2012 to 2018. The results show that SOCBs have the highest overall efficiency, followed by JSCBs, then UCBs. The efficiencies of SOCBs, JSCBs, and UCBs in the financing stage are greater than those in the investment stage, indicating that the latter stage brings down overall efficiency. Thus, all commercial banks need to focus on the efficiency of non-performing loans and return on capital. Finally, SOCBs need to strengthen internal controls, reduce non-performing loans and improve return on capital. JSCBs should actively expand its business while controlling costs, and UCBs should optimize its management.

Profit or Policy? Cross-Border Syndicated Lending by Chinese State-Owned Banks

Chinese banks, particularly the state-owned commercial banks, have significantly increased their presence in overseas syndicated loan markets over the past two decades. The Big Four are of great systemic importance as they are also the four largest banks globally by assets as in 2019. Previous evidence has heavily associated state ownership with bank inefficiency. Using borrower-time fixed effect to isolate demand-side factors, we show that foreign syndicated loans involving the Big Four have higher spreads than otherwise identical loans to the same borrowers during the same period, particularly in advanced economies. We find the opposite result in loans to Middle Eastern, Central Asian, and African Countries. Further analyses suggest that higher premia demanded by the Big Four are more likely to be explained by their increased profit sensitivity, with partial privatization and domestic banking market reform achieving success at least to some extent. Our evidence indicates that these megabanks could be becoming more efficient over time.

Implementing strategic disposability for performance evaluation: Innovation, stability, profitability and corporate social responsibility in Chinese banking

The current paper estimates the overall inefficiency indicator of a bank under a network Data Envelopment Analysis (DEA) in the presence of undesirable inputs and outputs. We primarily contribute to the DEA literature in four ways. First, we decompose banks’ overall inefficiency performance indicator into five component indicators, namely, the sub-indicators of innovation, two kinds of stability, profitability and corporate social responsibility. Second, since the proposed model, which is an absolute value optimization problem, does not give the overall inefficiency score directly, we introduce a two-step procedure to obtain all sub-indicator scores and the overall inefficiency score. Third, we extend the by-production framework by proposing not only a concept and interpretation of “strategic disposability” for an intermediate undesirable output in estimating the stability sub-indicators, but also another concept of “strategic disposability” for an intermediate undesirable input in gauging the sub-indicator related to corporate social responsibility. Our results show that 1) the Chinese banking industry has a high level of innovation inefficiency and profitability inefficiency is higher than primary business stability inefficiency, strategic management stability inefficiency and corporate social responsibility inefficiency for all the bank ownership types except the state-owned commercial banks; 2) state-owned commercial banks have a higher level of corporate social responsibility inefficiency compared to the other inefficiencies; 3) state-owned commercial banks, rural commercial banks and joint-stock commercial banks are the best three performers with different ownership types performing well in different perspectives; 4) all different ownership types experience a level of performance volatility over the examined period.

Does fintech innovation improve bank efficiency? Evidence from China’s banking industry

This paper examines whether the development of the financial technology (fintech) industry affects cost efficiency and the technology adopted for China’s banking industry over the period 2003–2017. Fintech industry development indices are constructed using fintech enterprise-level data, and these indices measure the development extent of entire fintech industry and four sub-industries including (1) credit, deposit and capital–raising services, ​(2) payment, clearing and settlement services, (3) ​investment management services ​and ​(4) market support services. The relevant efficiency scores for Chinese banks under different ownership structures are measured by applying the stochastic metafrontier approach. The results show that state-owned commercial banks have the lowest cost efficiency and operate under inferior technology. When considering the influence of fintech development, fintech innovations not only improve the cost efficiency of banks, but also enhance the technology used by banks. This double beneficial effect is more significant in the case of market support service innovations.

The Impact of Performance Assessment System on Employee Commitment: A Study among Executive Officers of State-Owned Commercial Banks in Sri Lanka

Performance management is a much broader and a complicated function of HR, as it encompasses activities such as joint goal setting, continuous progress review and frequent communication, feedback and coaching for improved performance, implementation of employee development programs and rewarding achievements. Performance management can be regarded as a systematic process by which the overall performance of an organization can be improved by improving the performance of individuals within a team framework. It is a means for promoting superior performance by communicating expectations, defining roles within a required competence framework, and establishing achievable benchmarks. As end results, the performance appraisal positively affects to the employee commitment and it will lead to achieving corporate objectives. However, there is a public opinion about a poor performance management system in public sector organizations. Accordingly, some researchers argue that performance management of public sector commercial banks is poorer than private sector commercial banks in the Sri Lankan context. Hence, this paper focuses on the assessment of the influence of the current performance management system adopted by major state-owned commercial banks on job commitment of their executive employees. The sample for this study was drawn from executive grade employees who are working at Peoples Bank and Bank of Ceylon and data were collected by using self-administrated questionnaire. Altogether 350 questionnaires were distributed by email and 208 completed questionnaires were taken in for final analysis. The PLS based SEM was employed to measure the impact of the exogenous variable on the endogenous variable based on the Smart PLS-3. The results revealed that among the set of determinants, career development, is the most significant determinant of employee commitments among executive officers of state-owned commercial banks in Sri Lanka. Further, it was revealed that, alignment with organizational goals, is the least significant determinant of employee commitments among executive officers of state-owned commercial banks in Sri Lanka.

Regulation adaptive strategy and bank efficiency: A network slacks-based measure with shared resources

Banks have two primary strategies for adapting to a regulation change in the era of big data which can be characterized as natural disposability and managerial disposability. Natural disposability implies a negative strategy by which a bank attempts to decreases its vector of inputs to decrease undesirable outputs. In contrast, managerial disposability indicates a positive strategy by which a bank considers a regulation change as an opportunity and adapt the regulation change by utilizing big data technology. The operational process of a bank can be decomposed into a productivity stage and a profitability stage. Furthermore, the operation costs, a shared resource, can be used to characterize natural disposability and managerial disposability. Based on natural disposability and managerial disposability, this paper proposes two network models to estimate the efficiencies of banks. To test their practical implications, the proposed models were applied to examine the efficiencies of Chinese commercial banks in the period 2014−2018. Our key findings are as follows. (1) There exist great disparities in the inefficiencies between two adaptive strategies. The inefficiencies are primarily driven by the profitability stage under natural disposability, whereas the inefficiencies are equally attributed to both stages under managerial disposability. (2) The efficiency differences among different types of banks are insignificant under natural disposability but are significant under managerial disposability. (3) Joint-stock commercial banks are more oveall efficient than state-owned commercial banks, city commercial banks and rural commercial banks, while state-owned commercial banks show worst practice for overall efficiency and profitability stage efficiency.

Effects of E-Banking Adoption on the Financial Performance of State-Owned Commercial Banks in Bangladesh

This study examines the relationship between e-banking adoption and the financial performance of state-owned commercial banks in Bangladesh. The pooled ordinary least square (OLS) estimate was applied to analyze the panel data of the sample banks. The empirical findings reveal that e-banking adoption and implementation has a significant negative impact on banks' profitability in terms of return on assets, return on equity, and net interest margin in the year of adoption. However, the result also shows that e-banking has a significant positive impact on return on assets in the year following adoption.