Pub Date : 2023-09-28DOI: 10.21511/bbs.18(3).2023.17
Zakia Abdelmoneim, Mai Yasser
This paper aims to study the impact of both bank performance and economic growth on bank profitability in 8 middle-income countries from the Middle East and North Africa (MENA) region and MINT countries using the Generalized Method of Moments (GMM) model. Bank profitability is measured by return on assets (ROA) and return on equity (ROE), net interest margin (NIM) is measured by CAMEL model, and economic growth is measured by gross domestic product (GDP) growth. The sample period ranges from 2000 to 2020, and data are extracted from the World Bank financial indicators and database. This paper is supported by the financial intermediation theory. By comparing both MINT and MENA regions, the results show that in the MINT region, ROA is affected most by both asset management and capital adequacy ratio (CAR), while NIM is affected by asset management, liquidity, and management. Regarding the MENA region, ROA and NIM are affected by CAR only. No relationship was found between ROE and any of the CAMEL determinants in both regions. The results show superior performance for MINT than MENA; strong and active capital, increment in assets, credits, and deposits, and enhancement in bank profitability that is reflected in economic growth progress. Both MENA and MINT regions’ profitability (ROA and ROE) is affected by GDP, so their economies are restructuring very well and their banking industries are expected to grow rapidly.
{"title":"The impact of bank performance and economic growth on bank profitability: CAMEL model application in middle-income countries","authors":"Zakia Abdelmoneim, Mai Yasser","doi":"10.21511/bbs.18(3).2023.17","DOIUrl":"https://doi.org/10.21511/bbs.18(3).2023.17","url":null,"abstract":"This paper aims to study the impact of both bank performance and economic growth on bank profitability in 8 middle-income countries from the Middle East and North Africa (MENA) region and MINT countries using the Generalized Method of Moments (GMM) model. Bank profitability is measured by return on assets (ROA) and return on equity (ROE), net interest margin (NIM) is measured by CAMEL model, and economic growth is measured by gross domestic product (GDP) growth. The sample period ranges from 2000 to 2020, and data are extracted from the World Bank financial indicators and database. This paper is supported by the financial intermediation theory. By comparing both MINT and MENA regions, the results show that in the MINT region, ROA is affected most by both asset management and capital adequacy ratio (CAR), while NIM is affected by asset management, liquidity, and management. Regarding the MENA region, ROA and NIM are affected by CAR only. No relationship was found between ROE and any of the CAMEL determinants in both regions. The results show superior performance for MINT than MENA; strong and active capital, increment in assets, credits, and deposits, and enhancement in bank profitability that is reflected in economic growth progress. Both MENA and MINT regions’ profitability (ROA and ROE) is affected by GDP, so their economies are restructuring very well and their banking industries are expected to grow rapidly.","PeriodicalId":53480,"journal":{"name":"Banks and Bank Systems","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135344873","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-27DOI: 10.21511/bbs.18(3).2023.16
None Suripto, Arif Sugiono, Havid Dasuki
This study aims to analyze the comparison of the resilience of Islamic and conventional banking in the Association of Southeast Asian Nations (ASEAN) during the COVID-19 pandemic. Comparison of banking resilience was proxied by the Capital Adequacy Ratio (CAR) and Loan-to-Deposit Ratio (LDR) factors, Return on Assets (ROA) and Non-Performing Loans (NPL) with the Multiple Discriminant Analysis test. In this case, the emphasis is placed on the patterns by which Islamic and conventional banking in ASEAN weathered the recent financial crisis during the COVID-19 pandemic. The explanatory and quantitative analysis also used a purposive sample strategy and SPSS to obtain and analyze data from 120-unit analyses of Islamic and conventional banks, respectively. From 2020 to 2021, traditional banks in the ASEAN region, especially in Indonesia, Malaysia, and Brunei Darussalam, were emphasized. Moreover, some data were prioritized regarding the Comparison of Resilience of Sharia and Conventional Banking in ASEAN after the COVID-19 pandemic. The results showed that conventional and Islamic banks had different resilience due to the influence of Capital Adequacy Ratio (CAR) and Loan-to-Deposit Ratio (LDR) factors, but there was no significant difference in the Return on Assets (ROA) and Non-Performing Loans (NPL). Based on the accuracy of the average prediction of 80%, conventional and Islamic bank groups had classification values of 48% and 88%, respectively. This indicated that Islamic financial institutions were more successful than conventional groups in implementing banking resilience.
{"title":"Comparing the resilience of Sharia and conventional banking to the financial crisis in the Association of Southeast Asian Nations","authors":"None Suripto, Arif Sugiono, Havid Dasuki","doi":"10.21511/bbs.18(3).2023.16","DOIUrl":"https://doi.org/10.21511/bbs.18(3).2023.16","url":null,"abstract":"This study aims to analyze the comparison of the resilience of Islamic and conventional banking in the Association of Southeast Asian Nations (ASEAN) during the COVID-19 pandemic. Comparison of banking resilience was proxied by the Capital Adequacy Ratio (CAR) and Loan-to-Deposit Ratio (LDR) factors, Return on Assets (ROA) and Non-Performing Loans (NPL) with the Multiple Discriminant Analysis test. In this case, the emphasis is placed on the patterns by which Islamic and conventional banking in ASEAN weathered the recent financial crisis during the COVID-19 pandemic. The explanatory and quantitative analysis also used a purposive sample strategy and SPSS to obtain and analyze data from 120-unit analyses of Islamic and conventional banks, respectively. From 2020 to 2021, traditional banks in the ASEAN region, especially in Indonesia, Malaysia, and Brunei Darussalam, were emphasized. Moreover, some data were prioritized regarding the Comparison of Resilience of Sharia and Conventional Banking in ASEAN after the COVID-19 pandemic. The results showed that conventional and Islamic banks had different resilience due to the influence of Capital Adequacy Ratio (CAR) and Loan-to-Deposit Ratio (LDR) factors, but there was no significant difference in the Return on Assets (ROA) and Non-Performing Loans (NPL). Based on the accuracy of the average prediction of 80%, conventional and Islamic bank groups had classification values of 48% and 88%, respectively. This indicated that Islamic financial institutions were more successful than conventional groups in implementing banking resilience.","PeriodicalId":53480,"journal":{"name":"Banks and Bank Systems","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135537743","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-25DOI: 10.21511/bbs.18(3).2023.14
Marwan Mansour, Mo’taz Al Zobi, Mohammed Saram, Luay Daoud, Ahmad Marei
The high pays received by executives has gained global attention. This study examines the impact of executive compensation on the performance of Jordanian banks, an area that has not been explored much. The study uses empirical methods for data collection and analysis. Dependent variables include Return on Equity (ROE) and Tobin’s Q performance, while total compensation incentives is the main independent variable. Control variables include bank size, bank age, leverage, and female executives. Through balanced panel data analysis comprising 196 bank-year observations, this quantitative research paper applies Ordinary Least Squares (OLS), fixed-effect, and Generalized Method of Moment (GMM) methods. These methods accurately establish the compensation-performance relationship in the banking sector from 2009 to 2022. The coefficient of determination (R2) for the ROE model: 51.63%, Tobin-Q model: 39.33%. These robust models support the main finding that executive compensation is significantly and positively correlated with operating and market-based performance indicators. Results validate the agency hypothesis, indicating that executives are rewarded for bank performance indicators. Consequently, a one-unit increase in executive compensation leads to a rise of 22.8 cents in ROE and 29.51 cents in Tobin-Q. Additionally, bank size, age, leverage, and female executives positively impact bank performance indicators. A modification of BSIZE, BAGE, LEV, and FEMALE by one-unit results in a proportional adjustment of 26.1 cents, 16.6 cents, 2.07 cents, and 48.6 cents, respectively, in ROE. Additionally, a one-unit alteration in BSIZE, BAGE, LEV, and FEMALE corresponds to variations of 77.6 cents, 56.42 cents, 34.39 cents, and 48.8 cents, in Tobin-Q, all in the same direction.
{"title":"Does executive compensation matter to bank performance? Experimental evidence from Jordan","authors":"Marwan Mansour, Mo’taz Al Zobi, Mohammed Saram, Luay Daoud, Ahmad Marei","doi":"10.21511/bbs.18(3).2023.14","DOIUrl":"https://doi.org/10.21511/bbs.18(3).2023.14","url":null,"abstract":"The high pays received by executives has gained global attention. This study examines the impact of executive compensation on the performance of Jordanian banks, an area that has not been explored much. The study uses empirical methods for data collection and analysis. Dependent variables include Return on Equity (ROE) and Tobin’s Q performance, while total compensation incentives is the main independent variable. Control variables include bank size, bank age, leverage, and female executives. Through balanced panel data analysis comprising 196 bank-year observations, this quantitative research paper applies Ordinary Least Squares (OLS), fixed-effect, and Generalized Method of Moment (GMM) methods. These methods accurately establish the compensation-performance relationship in the banking sector from 2009 to 2022. The coefficient of determination (R2) for the ROE model: 51.63%, Tobin-Q model: 39.33%. These robust models support the main finding that executive compensation is significantly and positively correlated with operating and market-based performance indicators. Results validate the agency hypothesis, indicating that executives are rewarded for bank performance indicators. Consequently, a one-unit increase in executive compensation leads to a rise of 22.8 cents in ROE and 29.51 cents in Tobin-Q. Additionally, bank size, age, leverage, and female executives positively impact bank performance indicators. A modification of BSIZE, BAGE, LEV, and FEMALE by one-unit results in a proportional adjustment of 26.1 cents, 16.6 cents, 2.07 cents, and 48.6 cents, respectively, in ROE. Additionally, a one-unit alteration in BSIZE, BAGE, LEV, and FEMALE corresponds to variations of 77.6 cents, 56.42 cents, 34.39 cents, and 48.8 cents, in Tobin-Q, all in the same direction.","PeriodicalId":53480,"journal":{"name":"Banks and Bank Systems","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135816604","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-25DOI: 10.21511/bbs.18(3).2023.15
Chedlia Farhat
The determinants of financial development in developing and emerging economies are examined in this article. The long-term relationships between banking sector development, financial integration, trade openness, and economic growth are explored using FMOLS-DOLS panel estimations spanning from 1980 to 2021. The critical significance of economic growth, trade openness, and financial liberalization as fundamental drivers of banking system progress is underscored by the results. To investigate this relationship, two specifications are introduced to measure banking sector development: private credits (specification 1) and the ME ratio (specification 2), which is defined as the ratio of M3 to GDP. In the context of specification 1, quantitative outcomes reveal that a 1% increase in economic growth results in a substantial rise of 0.207% in banking sector development according to FMOLS, and 0.972% according to DOLS. Similarly, a 1% increase in trade openness has a noteworthy positive impact of 0.019% on banking development. Furthermore, the results indicate that financial liberalization contributes positively to banking sector development, with an effect of 0.002%. In the context of specification 2, the impact of economic growth is more pronounced, with a significant increase of 0.3187% (FMOLS) and 0.852% (DOLS). However, trade openness (TRADE_OP) manifests a negative impact of –0.392% (FMOLS) and a positive impact of 0.0162% (DOLS). In conclusion, the critical importance of economic growth, trade openness, and financial liberalization in the development of the banking sector in developing and emerging economies is underscored by the empirical evidence. Prudent economic and financial policies, along with strengthened regulation and supervision, are recommended to foster sustainable and resilient financial development in these contexts.
{"title":"Determinants of banking sector development in developing and emerging economies: Unveiling the role of economic growth, trade openness, and financial liberalization","authors":"Chedlia Farhat","doi":"10.21511/bbs.18(3).2023.15","DOIUrl":"https://doi.org/10.21511/bbs.18(3).2023.15","url":null,"abstract":"The determinants of financial development in developing and emerging economies are examined in this article. The long-term relationships between banking sector development, financial integration, trade openness, and economic growth are explored using FMOLS-DOLS panel estimations spanning from 1980 to 2021. The critical significance of economic growth, trade openness, and financial liberalization as fundamental drivers of banking system progress is underscored by the results. To investigate this relationship, two specifications are introduced to measure banking sector development: private credits (specification 1) and the ME ratio (specification 2), which is defined as the ratio of M3 to GDP. In the context of specification 1, quantitative outcomes reveal that a 1% increase in economic growth results in a substantial rise of 0.207% in banking sector development according to FMOLS, and 0.972% according to DOLS. Similarly, a 1% increase in trade openness has a noteworthy positive impact of 0.019% on banking development. Furthermore, the results indicate that financial liberalization contributes positively to banking sector development, with an effect of 0.002%. In the context of specification 2, the impact of economic growth is more pronounced, with a significant increase of 0.3187% (FMOLS) and 0.852% (DOLS). However, trade openness (TRADE_OP) manifests a negative impact of –0.392% (FMOLS) and a positive impact of 0.0162% (DOLS). In conclusion, the critical importance of economic growth, trade openness, and financial liberalization in the development of the banking sector in developing and emerging economies is underscored by the empirical evidence. Prudent economic and financial policies, along with strengthened regulation and supervision, are recommended to foster sustainable and resilient financial development in these contexts.","PeriodicalId":53480,"journal":{"name":"Banks and Bank Systems","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135816603","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
When choosing a country as a trading partner, an important role is played by the speed, convenience, and reliability of banking services (this is primarily determined by the level of digitalization of banking activities), and the general level of economic growth of this country. The article analyzes the relationship between the efficiency of the banking system and the country’s economic growth under digitalization using the example of Azerbaijan and its key trading partners. Calculations were made using data for 2010–2021 based on World Bank, IMF, and UN statistics. Principal component analysis was used to identify the most relevant indicators that describe the stability of the banking system, the level of economic development of the country, and the level of digitalization; the method of structural modeling was used to identify functional relationships between the constructed synthetic generalizing indicators. Calculations showed that the development of the banking system is much more (almost seven times) influenced by the level of digitalization in the country than the level of economic growth (coefficients for synthetic generalizing indicators formed in the process of structural modeling are 0.29 and 0.04). Modeling proved that the focus of reforms aimed at increasing the level of digitalization in the country should be an increase in the number of electronic accounts, electronic payments, the share of the population using the Internet, growth of R&D expenditures, and innovation index.
{"title":"Interdependence of the banking system development and the economic growth in the context of digitalization: Case study of Azerbaijan and its key trading partners","authors":"Nigar Tagiyeva, Esmira Babashirinova, Gulnara Agabekova, Yashar Damirov, Gulnara Ismayilova","doi":"10.21511/bbs.18(3).2023.13","DOIUrl":"https://doi.org/10.21511/bbs.18(3).2023.13","url":null,"abstract":"When choosing a country as a trading partner, an important role is played by the speed, convenience, and reliability of banking services (this is primarily determined by the level of digitalization of banking activities), and the general level of economic growth of this country. The article analyzes the relationship between the efficiency of the banking system and the country’s economic growth under digitalization using the example of Azerbaijan and its key trading partners. Calculations were made using data for 2010–2021 based on World Bank, IMF, and UN statistics. Principal component analysis was used to identify the most relevant indicators that describe the stability of the banking system, the level of economic development of the country, and the level of digitalization; the method of structural modeling was used to identify functional relationships between the constructed synthetic generalizing indicators. Calculations showed that the development of the banking system is much more (almost seven times) influenced by the level of digitalization in the country than the level of economic growth (coefficients for synthetic generalizing indicators formed in the process of structural modeling are 0.29 and 0.04). Modeling proved that the focus of reforms aimed at increasing the level of digitalization in the country should be an increase in the number of electronic accounts, electronic payments, the share of the population using the Internet, growth of R&D expenditures, and innovation index.","PeriodicalId":53480,"journal":{"name":"Banks and Bank Systems","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47411506","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-08-23DOI: 10.21511/bbs.18(3).2023.12
Tajudeen John Ayoola, Omoneye Olufunke Olasanmi, Eghosa Godwin Inneh, Adebukola Olubunmi Ayoola, Chris Ehiobuche
A dominant strand of literature advances a positive association between corporate governance quality and investor confidence. However, the corporate life cycle may influence the relationship. Therefore, this study investigated the moderating role of the corporate life cycle in the association between corporate governance quality and investor confidence in the Nigerian banking industry. Corporate governance quality was proxied using a composite measure of board characteristics comprising board size, board meeting, independence, and board gender diversity, while investor confidence was proxied using the price-earnings ratio. Secondary data were obtained from the audited annual financial statements of 12 banks from 2006 to 2021. The study adopted a pooled regression model based on the results of Hausman, and the Breusch and Pagan Lagrangian multiplier test. The results showed that corporate governance quality positively and significantly impacted investor confidence at the introduction (coef = .318, p = 0.017) and decline (coef = 383, p = 0.011) phases of the life cycle. Banks at the introduction and decline phases of the life cycle were characterized by a narrow resource base, low profitability, and higher risky investments sufficient to attract investor confidence. The study concludes that corporate governance quality enhanced investor confidence at the introduction and decline phases of the banks’ life cycle.
主流文献提出了公司治理质量与投资者信心之间的正相关关系。然而，企业生命周期可能会影响这种关系。因此，本研究调查了公司生命周期在尼日利亚银行业公司治理质量与投资者信心之间的关系中的调节作用。公司治理质量用董事会特征(包括董事会规模、董事会会议、独立性和董事会性别多样性)的综合衡量指标来衡量，而投资者信心则用市盈率来衡量。二级数据来自12家银行2006年至2021年经审计的年度财务报表。本研究采用了基于Hausman结果的混合回归模型，以及Breusch和Pagan拉格朗日乘数检验。结果显示，公司治理质量在生命周期的引入阶段(coef = .318, p = 0.017)和衰退期(coef = 383, p = 0.011)对投资者信心产生了显著的正向影响。银行在生命周期的初期和衰退期的特点是资源基础狭窄，盈利能力低，投资风险高，足以吸引投资者的信心。该研究得出结论，公司治理质量在银行生命周期的引入和衰退阶段增强了投资者的信心。
{"title":"Corporate governance quality, corporate life cycle and investor confidence in commercial banks: Evidence from Nigeria","authors":"Tajudeen John Ayoola, Omoneye Olufunke Olasanmi, Eghosa Godwin Inneh, Adebukola Olubunmi Ayoola, Chris Ehiobuche","doi":"10.21511/bbs.18(3).2023.12","DOIUrl":"https://doi.org/10.21511/bbs.18(3).2023.12","url":null,"abstract":"A dominant strand of literature advances a positive association between corporate governance quality and investor confidence. However, the corporate life cycle may influence the relationship. Therefore, this study investigated the moderating role of the corporate life cycle in the association between corporate governance quality and investor confidence in the Nigerian banking industry. Corporate governance quality was proxied using a composite measure of board characteristics comprising board size, board meeting, independence, and board gender diversity, while investor confidence was proxied using the price-earnings ratio. Secondary data were obtained from the audited annual financial statements of 12 banks from 2006 to 2021. The study adopted a pooled regression model based on the results of Hausman, and the Breusch and Pagan Lagrangian multiplier test. The results showed that corporate governance quality positively and significantly impacted investor confidence at the introduction (coef = .318, p = 0.017) and decline (coef = 383, p = 0.011) phases of the life cycle. Banks at the introduction and decline phases of the life cycle were characterized by a narrow resource base, low profitability, and higher risky investments sufficient to attract investor confidence. The study concludes that corporate governance quality enhanced investor confidence at the introduction and decline phases of the banks’ life cycle.","PeriodicalId":53480,"journal":{"name":"Banks and Bank Systems","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41697176","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-08-16DOI: 10.21511/bbs.18(3).2023.11
A. Nurkhin, Kusmuriyanto, W. Widiyanto, Anna Kania Widiatami, Ida Nur Aeni
Islamic banking has existed in Indonesia since 1992. The performance of Islamic banking is interesting for further analysis. This study aims to analyze the impact of good corporate governance (GCG) implementation and bank characteristics on the performance of Islamic banking in Indonesia before the COVID-19 pandemic. Profitability is a measure of banking performance and is proxied by return on assets (ROA) and return on equity (ROE). The research sample consists of Islamic commercial banks that published financial and annual reports between 2011 and 2019. The data collection method used is documentation. Multiple regression analysis was used for data analysis. The results indicate that the implementation of GCG has no significant impact on performance (probability values of 0.425 and 0.420 on ROA and ROE with coefficients of 0.016 and 0.019). The P-value of the non-performing loans (NPF) variable is < 0.001 on ROA and ROE, which means that NPF has a significant negative impact on ROA and ROE. Third-party funds only have a significant impact on ROE with a p-value of 0.046. Meanwhile, the size of a bank has not been shown to have a significant impact on the performance of Islamic banking in Indonesia. Efforts to maintain NPF are critical for banks to achieve good performance (profitability). NPF demonstrates the risk of nonpayment of Islamic bank financing. AcknowledgmentWe gratefully acknowledge the research funding provided by LPPM Universitas Negeri Semarang (contract number: 19.8.3/UN37/PPK.3.1/2022).
{"title":"Do corporate governance implementation and bank characteristics improve the performance of Indonesian Islamic banking? Before-COVID-19 pandemic analysis","authors":"A. Nurkhin, Kusmuriyanto, W. Widiyanto, Anna Kania Widiatami, Ida Nur Aeni","doi":"10.21511/bbs.18(3).2023.11","DOIUrl":"https://doi.org/10.21511/bbs.18(3).2023.11","url":null,"abstract":"Islamic banking has existed in Indonesia since 1992. The performance of Islamic banking is interesting for further analysis. This study aims to analyze the impact of good corporate governance (GCG) implementation and bank characteristics on the performance of Islamic banking in Indonesia before the COVID-19 pandemic. Profitability is a measure of banking performance and is proxied by return on assets (ROA) and return on equity (ROE). The research sample consists of Islamic commercial banks that published financial and annual reports between 2011 and 2019. The data collection method used is documentation. Multiple regression analysis was used for data analysis. The results indicate that the implementation of GCG has no significant impact on performance (probability values of 0.425 and 0.420 on ROA and ROE with coefficients of 0.016 and 0.019). The P-value of the non-performing loans (NPF) variable is < 0.001 on ROA and ROE, which means that NPF has a significant negative impact on ROA and ROE. Third-party funds only have a significant impact on ROE with a p-value of 0.046. Meanwhile, the size of a bank has not been shown to have a significant impact on the performance of Islamic banking in Indonesia. Efforts to maintain NPF are critical for banks to achieve good performance (profitability). NPF demonstrates the risk of nonpayment of Islamic bank financing.\u0000AcknowledgmentWe gratefully acknowledge the research funding provided by LPPM Universitas Negeri Semarang (contract number: 19.8.3/UN37/PPK.3.1/2022).","PeriodicalId":53480,"journal":{"name":"Banks and Bank Systems","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43578845","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study aims to explore the intention of non-Muslims to become Islamic bank customers using an extended theory of planned behavior with Islamic Bank knowledge as a moderating variable. The partial least square structural equation modelling technique was employed for data and hypothesis testing. Using a probability sampling method, this analysis involved 200 non-Muslim Christians as the majority of respondents, representing the majority of non-Muslims in Indonesia. The results of this study show that attitude (ß = 5.390, p = 0.000), subjective norm (ß = 5.488, p = 0.000), and perceived behavioral control (ß = 2.104, p = 0.036) have a positive relationship with intention. Surprisingly, the relationship between Islamic Bank knowledge and intention is indirect, which is mediated through attitude. In addition, the Islamic Bank knowledge amplifies the relation between perceived behavioral control and intention. This study confirmed that Islamic Bank knowledge plays an important role in increasing intention. Thus, Islamic banks should consider educating more non-Muslims about what an Islamic bank is.
Pub Date : 2023-08-15DOI: 10.21511/bbs.18(3).2023.09
Tisa Maria Antony
Liquidity risk is a significant financial threat that must be handled carefully. Underestimation or mismanagement of liquidity risk may lead to severe financial losses or even bank failures. Therefore, timely and adequately estimating liquidity risk and examining factors that affect liquidity risk are essential. On that account, this paper aims to examine the determinants of liquidity risk for Indian commercial banks from 2013 to 2022. For this purpose, the study has employed a panel data regression model with pooled OLS, fixed effect, and random effect methods and has considered bank-specific and macroeconomic variables. The findings show that liquidity risk is affected by both bank-specific variables and macroeconomic variables. Bank-specific variables, such as bank age, have a negative impact on liquidity risk at the 1 percent significance using pooled OLS, FE, and RE models. In contrast, bank size and bank capitalization positively impacted liquidity risk. However, the operational efficiency of banks was found to have no significant impact on liquidity risk using both the liquid asset to total assets ratio and the loan to deposit ratio. In addition, the results show that macroeconomic variables such as GDP and inflation have a positive impact on liquidity risk. The study’s findings are expected to assist various stakeholders in making appropriate policies, decisions and managing their liquidity risk.
{"title":"Determinants of liquidity risk: Empirical evidence from Indian commercial banks","authors":"Tisa Maria Antony","doi":"10.21511/bbs.18(3).2023.09","DOIUrl":"https://doi.org/10.21511/bbs.18(3).2023.09","url":null,"abstract":"Liquidity risk is a significant financial threat that must be handled carefully. Underestimation or mismanagement of liquidity risk may lead to severe financial losses or even bank failures. Therefore, timely and adequately estimating liquidity risk and examining factors that affect liquidity risk are essential. On that account, this paper aims to examine the determinants of liquidity risk for Indian commercial banks from 2013 to 2022. For this purpose, the study has employed a panel data regression model with pooled OLS, fixed effect, and random effect methods and has considered bank-specific and macroeconomic variables. The findings show that liquidity risk is affected by both bank-specific variables and macroeconomic variables. Bank-specific variables, such as bank age, have a negative impact on liquidity risk at the 1 percent significance using pooled OLS, FE, and RE models. In contrast, bank size and bank capitalization positively impacted liquidity risk. However, the operational efficiency of banks was found to have no significant impact on liquidity risk using both the liquid asset to total assets ratio and the loan to deposit ratio. In addition, the results show that macroeconomic variables such as GDP and inflation have a positive impact on liquidity risk. The study’s findings are expected to assist various stakeholders in making appropriate policies, decisions and managing their liquidity risk.","PeriodicalId":53480,"journal":{"name":"Banks and Bank Systems","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41614523","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-08-14DOI: 10.21511/bbs.18(3).2023.08
A. Kaminskyi, N. Versal, O. Petrovskyi, N. Prykaziuk
Accurate forecasting of consumer loan market behavior gives banks a huge potential to optimize their credit strategies by proactively adapting to external changes. This study aims to analyze and predict consumer loan demand, supply, and profitability in the Ukrainian banking sector. Using a systemic dynamic approach, the interplay of five key factors is considered: central bank policies, GDP fluctuations, changing competitive landscape driven by FinTech companies, investment in government bonds as an alternative to loan granting, and severity of credit risk management.The developed dynamic model for the bank consumer loan market in Ukraine offers predictive capabilities enhancing decision-making and strategic planning in the banking sector and can be adapted in open small economies. Within the proposed systemic dynamic model, five scenarios were explored. Compared to the base scenario, a 4 p.p. increase in the key policy rate results in UAH 4.7 billion decrease in demand for bank consumer loans and a UAH 0.55 billion reduction in lending profitability based on the year’s results. Fall in GDP by 6 p.p. leads to a decrease in the supply of bank consumer loans by UAH 6.9 billion and a decrease in lending income by UAH 1.3 billion based on the year’s results. Scenario with the decline of FinTech portfolio by 20 p.p. quarterly leads to an increase in demand for bank consumer loans of UAH 8 billion. A 4 p.p. rise in government bond yields leads to a UAH 17 billion reduction in the supply of consumer loans in the same quarter.
{"title":"Dynamic framework for strategic forecasting of the bank consumer loan market: Evidence from Ukraine","authors":"A. Kaminskyi, N. Versal, O. Petrovskyi, N. Prykaziuk","doi":"10.21511/bbs.18(3).2023.08","DOIUrl":"https://doi.org/10.21511/bbs.18(3).2023.08","url":null,"abstract":"Accurate forecasting of consumer loan market behavior gives banks a huge potential to optimize their credit strategies by proactively adapting to external changes. This study aims to analyze and predict consumer loan demand, supply, and profitability in the Ukrainian banking sector. Using a systemic dynamic approach, the interplay of five key factors is considered: central bank policies, GDP fluctuations, changing competitive landscape driven by FinTech companies, investment in government bonds as an alternative to loan granting, and severity of credit risk management.The developed dynamic model for the bank consumer loan market in Ukraine offers predictive capabilities enhancing decision-making and strategic planning in the banking sector and can be adapted in open small economies. Within the proposed systemic dynamic model, five scenarios were explored. Compared to the base scenario, a 4 p.p. increase in the key policy rate results in UAH 4.7 billion decrease in demand for bank consumer loans and a UAH 0.55 billion reduction in lending profitability based on the year’s results. Fall in GDP by 6 p.p. leads to a decrease in the supply of bank consumer loans by UAH 6.9 billion and a decrease in lending income by UAH 1.3 billion based on the year’s results. Scenario with the decline of FinTech portfolio by 20 p.p. quarterly leads to an increase in demand for bank consumer loans of UAH 8 billion. A 4 p.p. rise in government bond yields leads to a UAH 17 billion reduction in the supply of consumer loans in the same quarter.","PeriodicalId":53480,"journal":{"name":"Banks and Bank Systems","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-08-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45962231","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：