scholarly journals What Determines the Profitability of Vietnam Commercial Banks?

2018 ◽  
Vol 11 (2) ◽  
pp. 231 ◽  
Author(s):  
Duong Thuy Nguyen ◽  
Huyen Thanh Ta ◽  
Huong Thi Diem Nguyen
Keyword(s):  
Capital Structure ◽  
Commercial Banks ◽  
Banking Sector ◽  
Banking System ◽  
Liquidity Risk ◽  
State Ownership ◽  
Data Set ◽  
Bank Profitability ◽  
Macroeconomic Factors ◽  
New Policies

Kunt and Detragiache (1999) said that the profitability of the banking system was a good indication in signaling financial crisis. Therefore, studying determinants of bank profitability is necessary for better understanding of the current condition of the banking sector, and then, for launching new policies. The research explored determinants of Vietnamese commercial banks’ profitability. Using Regression Analysis for Panel Data set of 13 Vietnamese commercial banks over the period from 2006 to 2015, the study found that foreign ownership, cost to income and the level of credit risk, negatively influenced on the profitability of Vietnamese banks, whereas state ownership, size of assets, and macroeconomic factors (GDP and inflation) did not indicated statistically significant relations to the profitability and the relationships between capital structure, liquidity risk and the profitability were mixed.

COMPETITION, RISK AND PROFITABILITY IN BANKING SYSTEM — EVIDENCE FROM VIETNAM

2020 ◽  
Vol 65 (06) ◽  
pp. 1491-1505
Author(s):  
THI HIEN NGUYEN ◽  
HA GIANG TRAN
Keyword(s):  
Information Technology ◽  
Risk Reduction ◽  
Commercial Banks ◽  
Banking System ◽  
Bank Competition ◽  
Competition Index ◽  
Data Set ◽  
Bank Profitability ◽  
Empirical Results ◽  
The Impact

The development in information technology results in a significant increase in bank competition. The question of whether increased competition improves bank profitability and risk reduction is important in many aspects. This paper analyzes the impact of competition on profitability and risk in the context of Vietnam using OLS estimator on data set of 37 Vietnamese commercial banks. The main results present that banks with a higher competition index tend to have higher profitability which is measured by ROE and NIM. In addition, our empirical results also show that banks tend to take on more risk when facing increased competition.

scholarly journals Determinants of profitability according to groups of banks in Albania

2017 ◽  
Vol 7 (1) ◽  
Author(s):  
Dr.Sc. Arjeta Hallunovi
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Bank Credit ◽  
Bank Profitability ◽  
Macroeconomic Factors ◽  
Group 3 ◽  
Group 2 ◽  
Bank Group ◽  
Level Of Significance ◽  
Group 1

The paper analyzed the determinants of profitability of all the commercial banks in Albania, where the banks were analyzed by dividing into groups[1]. These determinants are categorized into two groups, internal and external factors. The objective of the study is to determine the factors that affect the profitability in commercial banks, to show how they differ according to groups of the banks and making some recommendations which can help the management. A panel data with all the commercial banks that operate in Albania is analyzed for the period 2009-2014. To measure the profitability is used the independent variable return on assets. Banking specific factors that are used in this study include variables such as bank size, asset management, credit risk, liquidity of assets, capital adequacy, operational efficiency and cost of financing. On the other hand is taken into consideration only one industry specific factor, which is the concentration and some macroeconomic factors as GDP, exchange rate and inflation. The quantitative data are obtained from the financial statements of commercial banks, INSTAT, Bank of Albania, World Bank and Bankscope, in order to make empirical analysis needed to identify and measure the determinants of bank profitability. In particular, the multiple regression analysis is used to measure the impact of determinants in bank profitability and to realize empirical analysis is used Eviews  7.The results of the study showed a positive relationship between bank size and  profitability, statistically important in the group 2, with 1% level of significance. The credit risk had an inverse relation with profitability in the model, statistically significant at 1% level of significance for the group 2 and 5% for the group 1 and 3. While, in terms of macroeconomic factors, GDP had a positive relationship with profitability  and  it is statistically significant in the group 3. On the other hand, inflation and exchange rate showed a positive relation with profitability (ROA/ROE) but statistically insignificant for the model.[1] According to the Bank of Albania, in December 2014, banks in the Albanian sector are divided by size of activity: 1) The bank group 1 (0-2% of total banking sector assets) include  United Bank of Albania, Veneto Bank, International Commercial Bank, First Investment Bank, Credit Bank of Albania; 2) The bank group 2  (2-7% of total banking sector assets) include Procredit Bank, Credit Agricole Bank, National Bank of Greece, Societe Generale Bank - Albania, Alpha Bank - Albania, Union Bank; and 3) The banks group 3 (about 7% of total banking sector assets) include  Raiffeisen Bank, Credins Bank, National Commercial Bank, Intesa Sanpaolo Bank-Albania, Tirana Bank.  

scholarly journals LIQUIDITY RISK AND ITS MANAGEMENT IN LITHUANIAN BANKING SYSTEM / LLIKVIDUMO RIZIKA IR JOS VALDYMAS LIETUVOS BANKŲ SISTEMOJE

2014 ◽  
Vol 6 (1) ◽  
pp. 64-71
Author(s):  
Erika Bareikaitė ◽  
Raimonda Martinkutė-Kaulienė
Keyword(s):  
Commercial Banks ◽  
Main Part ◽  
Banking Sector ◽  
Scientific Literature ◽  
Banking System ◽  
Liquidity Risk ◽  
Research Synthesis ◽  
Economic Stability ◽  
Management Tools ◽  
Management Processes

Banks are the main part of financial sector in each economy and strength of banking system becomes vital for ensuringfavourable economic stability and growth. Recent failure of two commercial banks in Lithuania showed that managershaven’t evaluated liquidity risk or haven’t dealt with it properly. The tasks of the paper are to investigate Lithuanian banksposition towards liquidity risk, analyse what kind of management tools banks use for ensuring favourable position towardsliquidity and to explore the liquidity influence to profitability in Lithuanian banking sector. The article examines liquidity andits management processes in Lithuanian banking sector. Description of liquidity importance is presented. Liquidity risk and itsmeasurement as well as the ways of managing the above mentioned risk is analysed in the article. In order to analyse the relationshipbetween liquidity risk and profitability of banks, analysis of scientific literature, research synthesis and generalizationshave been made. Išanalizuota likvidumo svarba ir jo įtaka Lietuvos bankų veiklai.Išnagrinėti ir pateikti likvidumo vadybos bei valdymo Lietuvosbankininkystės sektoriuje principai. Likvidumo svarbos analizėpateikta ir apibendrintai, remiantis istoriniais įvykiais bei mokslinėsliteratūros apžvalga. Išnagrinėtos skirtinguose šaltiniuosevartojamos likvidumo sąvokos. Pateikta likvidumo rizikos irjos valdymo būdų apžvalga, aprašyti likvidumo vertinimo komponentai.Iškeltos ir aprašytos hipotezės ryšiui tarp likvidumoir pelningumo nustatyti bei pateikta siūlymų tolesniam tyrimui.

scholarly journals Management of Liquidity Risk and the Banking Activity

2019 ◽  
Vol 8 (2) ◽  
pp. 01-08
Author(s):  
Leonora Haliti Rudhani ◽  
Driton Balaj
Keyword(s):  
Commercial Banks ◽  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
Liquidity Risk ◽  
Risk Indicators ◽  
Liquidity Management ◽  
Banking Activity ◽  
The Stability ◽  
High Level

The banking sector in Kosovo continues to have a high level of sustainability and financial stability. Two substantial components for the stability of the banking system appear to be liquidity and liquidity risk. The purpose of this paper is to analyze liquidity management in Kosovo's commercial banks through liquidity risk indicators from 2008 to 2017. By comparing the methodology of the data presented, the study will assess the state of management of the liquidity risk of commercial banks. From 2008 until now, commercial banks in Kosovo have had liquidity reserves at a level higher than the level required by CBK, which means that exposure to liquidity risk was minimal.

Non-performing Assets and Profitability: Case of Indian Banking Sector

2020 ◽  
pp. 097226292091410 ◽  
Author(s):  
Dolly Gaur ◽  
Dipti Ranjan Mohapatra
Keyword(s):  
Banking Sector ◽  
Random Effect ◽  
Time Frame ◽  
Return On Assets ◽  
Data Set ◽  
Bank Profitability ◽  
Macroeconomic Factors ◽  
Return On Equity ◽  
Robust Standard Error ◽  
The Impact

At present, the Indian banking sector is facing an arduous time in the form of an increasing trend in non-performing assets (NPAs), which is testing its strength and resilience. The present study aims to explore the NPA–profitability relationship for the Indian banking sector, so as to determine the gravity of the impact that NPAs have on bank profitability. Further, other bank-specific, industry-specific and macroeconomic factors impacting banking profits have been taken under consideration. A balanced panel data set comprising 37 scheduled commercial banks of India over a time frame of 14 years (2005–2018) has been used for the purpose of required analysis. Conclusions have been drawn employing fixed effect and random effect panel regression models. Due to the presence of heteroskedasticity, results for robust standard error have been reported. A highly negative correlation exists between NPA and the two profitability measures return on assets (ROA) and return on equity (ROE). The results of this study have established NPA as the major detractor of banking industry’s profits because NPA carries the most negative regression coefficient which is highly significant. It implies that declining credit quality hampers banks’ performance and leads to their collapse.

scholarly journals Factors That Affect Liquidity of Commercial Banks in Kosovo

2021 ◽  
Vol 10 (1) ◽  
pp. 229
Author(s):  
Donjeta Morina ◽  
Albert Qarri
Keyword(s):  
World Bank ◽  
Commercial Banks ◽  
Banking Sector ◽  
Study Data ◽  
Capital Adequacy ◽  
Data Set ◽  
Macroeconomic Factors ◽  
Growth And Survival ◽  
The World Bank ◽  
Excess Liquidity

A very important factor that affects the growth and survival of commercial banks is also the level of liquidity. Banking industry regulators require banks to possess liquid assets in order to fulfill their obligations to depositors and third parties accurately. Lack of liquidity reduces the ability of banks to meet their obligations and otherwise excess liquidity may be the cause of reduced profits for banks. There are many factors that can affect the position of liquidity in commercial banks and which factors cause unbalanced liquidity and as such also affect their performance. As a result, the study of these factors is of particular importance. The main objective of this study is to analyze the liquidity empathy of the banking sector to several specific banking and macroeconomic factors. To achieve this objective, the study uses regression analysis per a data set that includes a time of 8 years respectively the years 2012 - 2019. To build the necessary econometric model and to achieve the purpose of the study, data are taken from the publications of the Central Bank and the World Bank (GDP data), which data are analyzed for each quarter for the study period. After analyzing the available data, the study concludes that between the main factors that can affect the liquidity position of commercial banks, Non-performing loans, Capital adequacy, and Credit interest rate have the grand and most important impact on the liquidity banking position.

Bank Liquidity Risk and Performance

2018 ◽  
Vol 21 (01) ◽  
pp. 1850007 ◽  
Author(s):  
Yi-Kai Chen ◽  
Chung-Hua Shen ◽  
Lanfeng Kao ◽  
Chuan-Yi Yeh
Keyword(s):  
Commercial Banks ◽  
Liquidity Risk ◽  
Bank Performance ◽  
Alternative Measure ◽  
External Funding ◽  
Bank Profitability ◽  
Macroeconomic Factors ◽  
Advanced Economies ◽  
Interest Margins ◽  
And Performance

This study employs an alternative measure of liquidity risk to investigate its determinants by using an unbalanced panel dataset of commercial banks in 12 advanced economies over the period 1994–2006. Dependence on liquid assets for external funding, supervisory and regulatory factors, and macroeconomic factors are all determinants of liquidity risk. Because of higher funding costs for obtaining liquidity, liquidity risk is regarded as a discount for bank profitability, yet liquidity risk shows a premium on bank performance in terms of banks’ net interest margins. Liquidity risk has reverse impacts on bank performance in a market-based financial system.

scholarly journals Examining banking productivity drivers in MENA banks after financial liberalisation in 1990s

2019 ◽  
Vol 8 (1) ◽  
pp. 59-74
Author(s):  
Hatem Elfeituri
Keyword(s):  
Commercial Banks ◽  
Technological Progress ◽  
Banking Sector ◽  
State Ownership ◽  
Scale Efficiency ◽  
Efficiency Change ◽  
Mena Countries ◽  
Financial Liberalisation ◽  
The Impact ◽  
Banking Productivity

The paper investigates whether deregulation and economic reforms have transformed the MENA banking sector into a more productive and efficient sector. This is the first study to cover a large sample of 11 MENA countries for an extended and recent period (1999-2012). Initially, this paper estimates the productivity and efficiency of MENA commercial banks using Malmquist DEA to estimate productivity (TFP), technological and technical efficiency, and scale efficiency change in order to investigate to what extent banking productivity in MENA economies has improved during the study period. Then, Tobit model is employed to examine the impact of bank and macroeconomic variables on the total factor productivity of MENA commercial banks. The obtained MPI results suggest that commercial banks operating in the Gulf countries have exhibited productivity progress mostly due to the technological progress rather than efficiency change. Results also suggest that expenses preference behaviour would help banks to enhance their productivity in the examined period and MENA countries. Whilst banking productivity is improved by financial reforms and technological progress, such findings overall do not indicate that foreign participation or state ownership lead to enhance productivity of banks, whilst suggesting that a number of sound policies should be implemented taking into account the characteristics of banking sector in MENA countries.

scholarly journals Analysis of The Influence of Liquidity, Credit and Operational Risk, in Indonesian Islamic Bank’s Financing for The Period 2007-2013

2015 ◽  
Vol 17 (3) ◽  
pp. 279 ◽  
Author(s):  
Ousmane Diallo ◽  
Tettet Fitrijanti ◽  
Nanny Dewi Tanzil
Keyword(s):  
Credit Risk ◽  
Causal Relationship ◽  
Risk Sharing ◽  
Banking Sector ◽  
Panel Data Analysis ◽  
Banking System ◽  
Liquidity Risk ◽  
Operational Risk ◽  
Islamic Banking ◽  
Islamic Bank

The purpose of this paper is to analyze the influence of credit, liquidity and operational risks in six Indonesian’s islamic banking financing products namely mudharabah, musyarakah, murabahah, istishna, ijarah and qardh, in order to try to discover whether or not Indonesian islamic banking is based on the “risk-sharing” system. This paper relies on a fixed effect model test based on the panel data analysis method, focusing on the period from 2007 to 2013. The research is an exploratory and descriptive study of all the Indonesian islamic banks that were operating in 2013. The results of this study show that the Islamic banking system in Indonesia truly has banking products based on “risk-sharing.” We found out that credit, operational and liquidity risks as a whole, have significant influence on mudarabah, musyarakah, murabahah, istishna, ijarah and qardh based financing. There is a correlation between the credit risk and mudarabah based financing, and no causal relationship between the credit risk and musharaka, murabahah, ijarah, istishna and qardh based financing. There is also correlation between the operational risk and mudarabah and murabahah based financing, and no causal relationship between the operational risk and musharaka, istishna, ijarah and qardh based financing. There is correlation between the liquidity risk and istishna based financing, and no causal relationship between the liquidity risk and musharaka, mudarabah, murabahah, ijarah and qardh based financing. A major implication of this study is the fact that there is no causal relationship between the credit risk and musharakah based financing, which is the mode of financing where the islamic bank shares the risk with its clients, but there is an influence of credit risk toward mudarabah mode financing, a financing mode where the Islamic bank bears all the risk. These findings can lead us to conclude that the Indonesian Islamic banking sector is based on the “risk sharing” system.

scholarly journals COMPETITION OF TRANSNATIONAL BANKS: MAIN TRENDS AND WAYS OF DEVELOPMENT

2021 ◽  
pp. 151-157
Author(s):  
Надежда Константиновна Савельева ◽  
Татьяна Алексеевна Тимкина
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Banking System ◽  
Competitive Advantages ◽  
International Banking ◽  
Statistical Research ◽  
Cross Border ◽  
The World ◽  
Financial Transactions ◽  
Level Analysis

Статья посвящена проблемам сохранения конкурентных преимуществ коммерческих банков для осуществления финансовых операций на трансграничных рынках. Целью исследования является анализ основных тенденций развития деятельности транснациональных банков в условиях глобализации. Объектом исследования являются мировые лидеры международной банковской сферы. Научная новизна заключается в разработке основных направлений развития банковской системы на международном уровне, результатах анализа опыта лидирующих транснациональных банковских компаний в условиях пандемии The article is devoted to the problems of maintaining the competitive advantages of commercial banks for the implementation of financial transactions in cross-border markets. The aim of the study is to analyze the main trends in the development of the work of transnational banks in the context of globalization. The object of research is the world leaders of the international banking sector. In the process of research, the authors have analyzed theoretical and practical material used in general methods of scientific knowledge and statistical research. Scientific novelty lies in the development of the main directions for the development of the banking system at the international level, analysis of the experience of leading transnational banking companies in the context of a pandemic.

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