Risk Management Disclosure in Lithuanian Commercial Banks Financial Statements

2014 ◽  
Author(s):  
Dalia Kaupelyte ◽  
Mantas Seilius ◽  
RRta Zinkeviiiitt
Keyword(s):  
Risk Management ◽  
Commercial Banks ◽  
Financial Statements

scholarly journals RISK MANAGEMENT DISCLOSURE IN LITHUANIAN COMMERCIAL BANKS FINANCIAL STATEMENTS

2014 ◽  
Vol 9 (1) ◽  
pp. 44-51 ◽  
Author(s):  
Dalia Kaupelytė ◽  
Mantas Seilius ◽  
Rūta Zinkevičiūtė
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Institutions ◽  
Financial Reporting ◽  
Commercial Banks ◽  
Financial Statements ◽  
Capital Adequacy ◽  
Annual Reports ◽  
Basel Iii ◽  
Regulatory Requirements

Financial institutions have to follow International regulatory requirements and national regulations for risk management disclosure. International regulations are developed by Basel Committee of Banking Supervision (known as Basel II and Basel III) and International Financial Reporting Standards (IFRS 7) introduced by International Accounting Standards Board. National requirements in Lithuanian are developed by Lithuanian central bank. Financial institutions, banks, are expected to provide timely and transparent information about risk exposures, correspondence to minimum regulatory requirements, risk computation methods etc. Still there are some questions raised how these de facto regulations are implemented in practice. The goal of empirical research was to investigate the extent of risk management disclosure in Lithuanian commercial banks financial statements. Data sample constituted of 7 commercial banks that are legally registered in Lithuania: AB “Swedbank”, AB “SEB”, AB “DNB”, AB “Citadele”, AB “Medicinos Bankas”, AB “Šiaulių bankas”, AB “Finasta”. The period of 2009 – 2013 was analysed. The content analysis as analytical tool was employed. Research criteria were divided into 5 major groups: general policy, capital adequacy, credit risk, market risk, and operational risk. In total 34 criterions were developed. Coding of text was performed by counting words for each criterion. Our evidence supports the conjecture that Lithuanian commercial banks provide more and more risk reporting. Also, we find that the extent of risk management disclosure is greater with the bigger size of reporting bank. Meanwhile, the extent for different risk management disclosure varies significantly: credit risk management is most reported risk. Further investigations on risk management disclosure in commercial banks should be focused on other reports first, such as annual reports or additional reports, which are provided by banks. Second, the sample of research is limited and in order to obtain more accurate results it is necessary to expand it. Moreover, authors did not examine liquidity risk, which could be relevant to the results, especially when Basel III accord is in the implementation stage. Third, counting unit can be changed from words to sentences, because sometimes separate words are meaningless and finally, future researches could be focused not only on extent of disclosed information, but also concentrate on the quality of provided information.

An Investigation of Credit Risk Management Strategies of Private Commercial Banks of Bangladesh

2014 ◽  
Vol 2 (2) ◽  
pp. 77-87
Author(s):  
Abu Hanifa Md. Noman ◽  
Md. Amzad Hossain ◽  
Sajeda Pervin
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Management Practices ◽  
Management Practice ◽  
Management Strategies ◽  
Third Party ◽  
Primary Data ◽  
Credit Risk Management ◽  
Risk Management Strategies

Objective - The study aims to investigate credit risk management practices and credit risk management strategies of the local private commercial banks in Bangladesh. Methodology -The investigation is conducted based on primary data collected from a set of both closed end and open end questionnaire from 23 out of 39 local private commercial banks in Bangladesh. Descriptive statistics has been used in processing the data and interpreting the results. Findings - The results reveal that credit risk management practice of the sample banks is sound which is attributed to the appropriate implementation of Basel II and credit risk management guidelines the country's central bank. The findings further show that use of Credit risk grading is most popular and effective criteria for measuring the borrowing capacity of the borrowers. In order to control credit risk and preventing losses from credit exposure banks give more focus on collateralization, accurate loan pricing and third party guarantee. Loan is monitored properly and credit reminder is given to the client if principal and interest remain outstanding for three months. The study further reveals that lack of experienced and trained credit officers, lack of genuine market information and Lack of awareness regarding non-genuine borrower are the most important problems of current credit risk management practices in Bangladesh. Novelty - To the best of the knowledge of the authors the study is the first that investigates credit risk management strategies of private commercial banks, especially on Bangladesh. Type of Paper - Empirical Keyword : Bangladesh; Commercial Bank; Credit risk; Credit risk management; Credit risk management strategies.

scholarly journals Credit Management and Issues of Bad Debts: An Empirical Study of Listed Deposit Banks in Nigeria

2020 ◽  
pp. 32-49
Author(s):  
Peter E. Ayunku ◽  
Akwarandu Uzochukwu
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Random Effect ◽  
Credit Risk Management ◽  
Loan Loss ◽  
Data Set ◽  
Credit Management ◽  
Loan Loss Provision ◽  
The Impact

This study examines the impact of credit management on firm performance amidst bad debts, among Nigerian deposit banks. Five hypotheses were formulated following the dependent variables of Return on Asset and Tobin Q. The independent variables employed for this study include: Loan Loss Provision, Loan to Deposit Ratio, Equity to Asset Ratio, and Loan Write off. This study is based on ex-post facto research design and employed a panel data set collected from fourteen (14) commercial banks over six years ranging from 2014 to 2019 financial year. We analyzed the data set using descriptive statistics, correlation and Ordinary Least Square Regression Technique. The random effect models established that non-performing loan, loan loss provision and equity to asset impact significantly on banks’ performance in both Return on Asset and Tobin-Q models. This suggests that the sampled banks need to establish efficient arrangements to deal with credit risk management. In all, credit risk management indicators considered in this research are important variables in explaining the profitability of Nigerian commercial banks. However, based on the outcome from the empirical analysis, the study carefully recommends that investors and shareholders in these banks should be aware of the possible use of provisions for losses on non-performing loans by managers for smoothening of profits. The shareholders specifically should be ready to meet optimal agency costs to reduce the manager's information asymmetry by hiring competent internal and external auditors.

scholarly journals Risk Management of Commercial Banks in Kosovo

2019 ◽  
Vol VII (Issue 4) ◽  
pp. 197-212
Author(s):  
Muhamet Aliu ◽  
Arbana Sahiti ◽  
Albina Kalimashi
Keyword(s):  
Risk Management ◽  
Commercial Banks

scholarly journals Improved forecast assessment for the expected credit losses in credit risk monitoring in commercial banks in the context of international and Russian practices

2020 ◽  
Vol 15 (3) ◽  
pp. 445-457
Author(s):  
Elena Vladimirovna Travkina ◽  
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Banking Sector ◽  
Assessment Model ◽  
Financial Instruments ◽  
Credit Risk Assessment ◽  
Ifrs 9 ◽  
Credit Losses

Current banking sector’s performance raises the issues connected with the IFRS 9 Financial Instruments driven transformation of the forecast assessment for the expected credit losses during monitoring and credit risk assessment in commercial banks. In this regard, it becomes important to conduct a comprehensive systematization of the existing Russian and international practices for monitoring and evaluating credit risk in commercial banks. The purpose of the study is to develop a comprehensive approach to the use of an effective model for the impairment of expected losses in banking activities. The novelty of the study includes the enhancement of the tools for the forecast assessment of the expected credit losses among the commercial banks’ clients to improve the credit risk management efficiency. The results from the implementation of IFRS 9 Financial Instruments in the banking area show that modern conditions maintain the uncertainty of the long-term impact of the credit risk on the commercial banks’ performance. What is more, a huge amount of additional information gives significant difficulties, which contributes into the sophisticated calculations of the future credit losses of the banks. It has been justified that a forecast assessment model for the expected credit losses of the clients during the monitoring and bank’s credit risk assessment should be based on the collective or individual ground. The efficient application of the expected losses impairment in the banking performance has been described as a fundamental tool to simulate the expected credit losses to provision for impairment. This model has been shown to be determined by the features of the credit activities and bank portfolio, types of its financial tools, sources of the available information, as well as the applied IT systems. The proposed model validation algorithm for the expected impairment losses could reduce the expected credit losses, decrease the volume of the created assessed reserves, as well as improve the overall commercial bank performance efficiency. Theoretically, the study develops the credit losses risk management in the context of the transformations in the global and Russian banking practices. From the perspective of the practical value, the research gives an opportunity to create an efficient forecast assessment model for the expected credit losses of the commercial banks’ clients, this model contributing into the cost effectiveness of the bank’s credit activities. A promising further research is considered to be aimed at developing the tools for the assessment of the commercial banks’ credit activity results in the context of the adopted changes connected with the introduction of IFRS 9 Financial Instruments in the Russian banking sector.

Sign in / Sign up

Export Citation Format

Share Document