scholarly journals Assessing the Impact of Corporate Governance Index on Financial Performance in the Romanian and Italian Banking Systems

2021 ◽  
Vol 13 (10) ◽  
pp. 5535
Author(s):  
Marco Benvenuto ◽  
Roxana Loredana Avram ◽  
Alexandru Avram ◽  
Carmine Viola
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Banking Sector ◽  
Research Question ◽  
Interactive Effect ◽  
Banking System ◽  
Capital Adequacy ◽  
Banking Systems ◽  
Governance Index ◽  
The Impact

Background: Our study aims to verify the impact of corporate governance index on financial performance, namely return on assets (ROA), general liquidity, capital adequacy and size of company expressed as total assets in the banking sector for both a developing and a developed country. In addition, we investigate the interactive effect of corporate governance on a homogenous and a heterogeneous banking system. These two banking systems were chosen in order to assess the impact of corporate governance on two distinct types of banking system: a homogenous one such as the Romanian one and a heterogeneous one such as the Italian one. The two systems are very distinct; the Romanian one is represented by only 34 banks, while the Italian one comprises more than 350 banks. Thus, our research question is how a modification in corporate governance legislation is influencing the two different banking systems. The research implication of our study is whether a modification in legislation, thus in the index of corporate governance, is feasible for two different banking sectors and what the best ways to increase the financial performance of banks are without compromising their resilience. Methods: Using survey data from the Italian and Romanian banking systems over the period 2007–2018, we find that the corporate governance has a significant, positive and long-lasting effect on profitability and capital adequacy in both countries. Results: Taking the size of the company into consideration, the impact of the Index of Corporate Governance (ICG) on a homogenous banking system is positive while the impact on a heterogeneous banking system is negative. Conclusions: Our study provides evidence of the impact of IGC on financial performance and sheds light on the importance of the size of the company. Therefore, one can state that the corporate governance principles applied do not encourage the growth of large banks in heterogeneous banking sectors, thereby suggesting new avenues of research associated with new perspectives.

Comparative analysis of Financial performance of HDFC and SBI bank on the basis of Ratio analysis

2021 ◽  
pp. 111-114
Author(s):  
Reetika Verma
Keyword(s):  
Financial Performance ◽  
Banking Sector ◽  
Banking System ◽  
Capital Adequacy ◽  
Ratio Analysis ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
Equity Ratio ◽  
Accounting Ratios

The banking sector in any economy plays a significant role in its growth and development. This paper is based on financial performance analysis of two leading banks of India. This paper aims to evaluate financial performance of HDFC and SBI bank on the basis of accounting ratios and also to study the functioning of the Indian banking system [6]. In this paper different ratios of both the banks are compared. Capital adequacy ratio, debt equity ratio, leverage ratios, profit and loss account ratios, net interest margin ratio, return on equity and other ratios are used to compare the performance of both the banks. This research is based on the data collected from financial statements of the banks. The performance of both the banks are compared from the year 2015 to 2020. It is observed that performance of HDFC is better than SBI not only in terms of ratio analysis but also in terms of customer satisfaction.

scholarly journals The Impact of Technology on the Financial Performance of Banking Sector With Reference To Sbi & Hdfc Banks

2020 ◽  
Vol 9 (1) ◽  
pp. 2029-2036
Keyword(s):  
Financial Performance ◽  
Banking Sector ◽  
Banking System ◽  
Asset Returns ◽  
Internet Banking ◽  
Mediation Effect ◽  
Substantial Impact ◽  
Financial Variables ◽  
Bivariate Correlation ◽  
The Impact

The modern banking system includes the effective usage of technology not only to deliver services to customers, but also to increase the financial performance of the banking sector. The present study considered the meta data of the State Bank of India and the HDFC Fund for the duration 2009-10 to 2019-20. The study introduced the data in panel form and applied the approach according to the objectives outlined. The study primarily looked at the four key banking network variables (internet banking, telephone banking, ICS banking and ATMs) influencing the contingent variable – asset returns by tracking a few different variables. The study examined the relationship between the banking technology variables and the financial variables with the aid of the Bivariate correlation statistical method, and the result revealed a favorable relationship with the asset returns technology variables. The study examined the influence of technology on the financial results of banking with a mediation effect and concluded that mobile and ICS banking have a substantial impact on the return on assets of the selected SBI and HDFC banks

scholarly journals The impact of corporate governance on Turkish banking sector during economic crisis: The test of instrumental stakeholder theory

2011 ◽  
Vol 8 (3) ◽  
pp. 28-41
Author(s):  
Suleyman Gokhan Gunay ◽  
Mustafa Heves
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Economic Crisis ◽  
Stakeholder Theory ◽  
Banking Sector ◽  
Return On Equity ◽  
Average Return ◽  
Governance Model ◽  
The Impact ◽  
The Relationship

The aim of this paper is to show the relationship between corporate governance and bank financial performance during economic crisis. In other words, a stakeholder governance model is developed in order to test the instrumental stakeholder theory during economic crisis. It is found that the average return on equity for the group of banks that use stakeholder governance model is approximately 70% higher than the group of banks that use stockholder governance model in Turkey during the economic crisis period (2007-2009). These findings show the importance of stakeholder governance model during the economic crisis. In other words, it is found that banks immunized themselves against the effects of economic crisis in terms of their financial performance

scholarly journals RECENT TIE UP OF SBI WITH ITS ASSOCIATES: A PROBE OF PRE AND POST-MERGER ATTAINMENT THROUGH THE LENS OF CAMELS FRAMEWORK

2020 ◽  
pp. 198-210
Author(s):  
Rajashree Upadhyay ◽  
Dr. Mahesh Kumar Kurmi
Keyword(s):  
Financial Performance ◽  
Banking Sector ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Management Efficiency ◽  
Significant Difference ◽  
Short Run ◽  
The Impact ◽  
Cover Up ◽  
Effective Output

The term ‘merger’ signifies the joining of two or more business concerns into a single one mainly with the purpose of generating much more effective output. But, sometimes these tie up events are done to absorb the weak entity with intention to cover up these sick entity’s loopholes. Merger in banking sector is now a latest trend to take over weak banks and enhance its business capability with capturing a huge portion of competitive market. In simple terms, banks are unified to enjoy the synergy benefits of the merger. State Bank of India which is currently the most popular one public sector bank of India also witnessed such kind of consolidation events primarily with its subsidiaries banks. The almost latest tie up deal of SBI with its five subsidiaries banks & Bharatiya Mahila Bank occurred on 1st April 2017 is the center point of this study around which analysis is rotating with the intention to examine the impact of consolidation on this largest bank’s performance through the lens of CAMELS framework. This article is purely based on secondary data and all the required facts & figures are congregated from ‘CAPITALINE- 2000 Database’. Three years pre tie up phase (i.e., from 2014-15 to 2016-17) & three years post tie up phase (i.e., from 2017-18 to 2019-20) of State Bank India are explored in this study. The findings of the study confirms that State Bank of India has failed to enjoy the benefits of merger as it take over its own associate banks which are already have high non- performing assets. Ratios related to capital adequacy do not point any remarkable improvements in post-merger phase. Similarly, bank has failed to improve its assets quality. Except Business per Employee all the management efficiency ratios have not gained enough mileage. Overall earnings capacity and liquidity of the bank has also deteriorated after merger. As a whole it can be opined that merger has not made any significant difference in financial performance of SBI, at least in short run. KEYWORDS: Merger & Acquisition, CAMELS, Assets Quality, Sensitivity, Banking Sector

scholarly journals Good Corporate Governance And Financial Performance On Capital Adequacy Ratio: A Reflection Of Indonesian Conventional Banking

2021 ◽  
Vol 7 (2) ◽  
pp. 293-306
Author(s):  
Yuli Agustina ◽  
Agung Winarno ◽  
Ariska Dyan
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Self Assessment ◽  
Good Corporate Governance ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
Using Data ◽  
The Impact

The purpose of this study is to determine the impact of good corporate governance, as well as financial performance as measured by non-performing loans, net interest margin, return on assets, and loan to deposit ratios, on the capital adequacy ratio of conventional banking in the period 2015-2019, using data from the Federal Reserve. The composite value of banking self-assessment is the indicator that was utilized to determine good corporate governance in the context of this study. The quantitative approach used in this study was combined with secondary data. Purposive sampling was used in this study to select a sample of 35 banks, which was then analyzed. The findings revealed that GCG, NPL, ROA, and LDR had no impact on CAR. This occurs because the revenues obtained by the bank are used to mitigate the bank's operational risk, and so have no effect on the bank's capital adequacy ratio (CAR). The NIM has a negative and statistically significant effect on the CAR. This is due to the fact that the NIM indicates that the quantity of loans granted is increasing, implying that the risk faced by the bank is also increasing.

State ownership and bank performance: conventional vs Islamic banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Turki Alshammari
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Positive Influence ◽  
State Ownership ◽  
Bank Performance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Banking Systems ◽  
The Impact

Purpose This paper aims to examine the effect of state ownership on bank performance for all banks in the Gulf Cooperation Council (GCC) countries during the period 2003 – 2018, for two distinct banking systems: the conventional and the Islamic banking systems. Design/methodology/approach To achieve the goal of the study, this paper uses a mean t-test to examine the mean difference of the related variables for both banking systems, and a regression test (using the GMM method) to explore the effect of state ownership on bank performance. Findings The most important result of the analysis is that state ownership has a significantly positive influence on bank performance for conventional banks but not for Islamic banks, in the GCC area. Originality/value This study adds to the scarce related literature comparative empirical results with respect to the impact of ownership on the performance of two different banking systems: the conventional system and the Islamic banking system in the GCC area. This study is likely to have implications for policymakers in terms of developing rules relevant to the governance of GCC’s two banking systems that can help to support the stability of the whole banking sector.

scholarly journals The Influence of Bank Governance on Improving the Financial Performance- An Empirical Study on the Banks Sector in the Kingdom of Saudi Arabia: أثر حوكمة المصارف علي تحسين الأداء المالي – دراسة تطبيقية على قطاع المصارف في المملكة العربية السعودية –

2019 ◽  
Vol 3 (8) ◽  
Author(s):  
Ghada Othman Al- Jahdali, Rawia Reza Obaid
Keyword(s):  
Corporate Governance ◽  
Saudi Arabia ◽  
Financial Performance ◽  
Banking Sector ◽  
Cash Balance ◽  
Kingdom Of Saudi Arabia ◽  
Public And Private ◽  
Return On Equity ◽  
Before And After ◽  
The Impact

The study aimed to measure the impact of corporate governance on improving the financial performance in the banking sector in Saudi Arabia by measuring the impact of the profitability of Saudi banks، namely the profitability and liquidity indicators when applying governance. The analytical method was followed to achieve the objective of the study. The data of the financial statements were analyzed for the period 2010- 2017 to confirm six hypotheses related to measuring the existence of statistically significant differences between indicators of financial ratios before and after applying corporate governance. The results of the study showed that the liquidity indicators differ in 2010- 2013 (the accounting average of the cash balance ratio is 21%) from in 2014- 2017 (the accounting average of the cash balance ratio equals 18%)، which affected the rate of return achieved by the bank. The results also showed that excessive liquidity reduces profits، which is one of the Bank's most important objectives. Return on equity and return on assets were 4% and 1%، respectively، indicating that profitability is very low compared to high liquidity. The study recommended the need to promote the concept of corporate governance among all concerned parties and recommended the formation of specialized committees on governance in banks. Efforts should be made to adopt the concept of governance in the Kingdom of Saudi Arabia through cooperation between different public and private sectors.    

scholarly journals Capital Adequacy and Financial Performance of Banks in Nigeria: Empirical Evidence Based on the Fgls Estimator

2016 ◽  
Vol 12 (25) ◽  
pp. 295 ◽  
Author(s):  
David Umoru ◽  
Joy O. Osemwegie
Keyword(s):  
Financial Performance ◽  
Empirical Evidence ◽  
Banking Sector ◽  
Capital Adequacy ◽  
Evidence Based ◽  
Panel Model ◽  
Capital Adequacy Ratio ◽  
The Impact

The study examines the degree of significance of the capital adequacy ratio in influencing the financial deeds of Nigerian banks by applying the feasible GLS estimator technique on the pooled panel model for the period of 2007 to 2015. Empirical evidence supports the overriding impact of capital adequacy in enhancing the financial deeds of Nigerian banks. Nevertheless, the impact of the estimated capital adequacy is below 30%. The policy stance of the empirics holds thus that depositor’s money in the banking sector has not been absolutely assured. Hence, the deposit money banks might not be able to fulfil their liabilities and risk. In light of the findings, we suggested a constant reassessment of the least amount of capital required of banks by the CBN.

scholarly journals Corporate governance and financial performance: An empirical study on Egyptian banks

2015 ◽  
Vol 13 (1) ◽  
pp. 1359-1374
Author(s):  
Hassan M. Hafez
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Board Of Directors ◽  
Banking Sector ◽  
Annual Reports ◽  
Obvious Effect ◽  
The Board Of Directors ◽  
Conventional Banks ◽  
The Impact

There is a distinct lack of research into the relationship between corporate governance and banks’ financial performance in the banking sector in Egypt. This research paper tries to fills this gab by examining the impact of corporate governance, with particular reference to the role of board of directors and ownership concentration, on the financial performance of Egyptian banks. Using a sample of 39 banks represent all commercial banks operate in Egypt for the period 2004– 2015 and controlling banks size and age. The study relied on the data through the annual reports of the respective banks, website of the central bank of Egypt and Data scope. The banks were selected for the study cutting across the local Islamic and Conventional banks, foreign Islamic and conventional banks, and regional Islamic and conventional banks. The results showed that banks ownership either foreign or national has an obvious effect on the banks’ financial performance. Board size has no significant effect. However, the hierarchy of the board of directors and the duality of the CEO has a direct effect on the banks financial performance in Egypt.

scholarly journals A financial Stability Index for Jordan

2021 ◽  
Vol 10 (2) ◽  
pp. 157-178
Author(s):  
Samer A.M. AL-Rjoub
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Composite Index ◽  
Banking System ◽  
Stability Index ◽  
Capital Adequacy ◽  
Economic Conditions ◽  
Policy Makers ◽  
Monetary Stability ◽  
The Impact

Abstract Financial stability is an important part of the Central Bank of Jordan (CBJ) role in parallel with maintenance of monetary stability. The impact of the global financial crises from 2007-2009 and the economic slowdown has left the Jordanian banking sector in a generally weaker position than before. This paper constructs an index of financial stability of the Jordanian banking sector that will adequately reflects the effects of the crises in 2008-2009 and measure the resilience of the banking sector against negative shocks. The index is based on the aggregation of the fifteen announced soundness indicators into four main categories: (i) Capital Adequacy, (ii) Earnings and Profitability, and (iii) liquidity to build one aggregate composite index. Using two weighting schemes the Financial Stability Index (FSI) proved to be a good indicator of banking reactions to shocks and changing economic conditions. FSI is intuitively attractive as it could enable policy makers to better monitor the banking sector’s resilience to shocks and can help further in anticipating the sources and causes of financial stress to the system. The index of financial stability of the banking sector in Jordan shows that the banking system has been consciously resilient against shocks and negative economic conditions.

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