Capital Structure Determinant’s of North American Banks and the Compensation Executive Program-An Empiric Study on the Actual Systemic Crisis

Jucá, Michele Nascimento; Sousa, Almir Ferreira de; Fishlow, Albert

doi:10.5539/ijbm.v7n17p13

Cited by 16 publications

(17 citation statements)

References 30 publications

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“…H 1 : bank size has negative significant effect on capital adequacy ratio Jucá, Sousa, & Fishlow (2012) analyzed banks in Brazil and North America to determine the main factor of capital requirement for the period 2004-2010 using multiple linear regression. They found that the determinants of capital structure also had an influence on determining bank leverage levels.…”

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Determinants of capital adequacy ratio on banking industry: Evidence in Indonesia Stock Exchange

Usman

Lestari

Puspa

2019

Jurnal Keuangan Dan Perbankan

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Capital adequacy ratio (CAR) is an important indicator of bank safety sustainability. Banks that can guarantee CAR means the bank has the power to resist the financial crisis, protecting the bank itself and funds from depositors. This study aimed to determine the factors that affect the CAR. The sample used in this study is the banking industry listed on the Indonesia Stock Exchange (IDX) from 2007 until 2018. Independent variables are bank size, leverage, loan loss reserves, net interest margin, loan assets ratio, and liquidity. The dependent variable is CAR. The number of samples is 27 conventional banks by using purposive sampling. By using panel data regression analysis by estimating ordinary General Least Squares (GLS) method. The results of this study indicate that bank size, leverage, loan loss reserve, net interest margin, and loan asset ratio has an effect on CAR significantly while liquidity has no effect on CAR. The results of this study are expected to be used as a reference for bank managers and investors in looking at the factors that affect the CAR in the banking industry. AbstrakRasio kecukupan modal (CAR) merupakan indikator penting untuk keberlanjutan keselamatan bank. Bank yang dapat menjamin CAR berarti bank memiliki kekuatan untuk melawan krisis keuangan, melindungi bank itu sendiri dan dana dari deposan. Penelitian ini bertujuan untuk mengetahui faktor-faktor yang memengaruhi CAR. Sampel yang digunakan dalam penelitian ini adalah industri perbankan yang terdaftar di Bursa Efek Indonesia (BEI) dari tahun [2007][2008][2009][2010][2011][2012][2013][2014][2015][2016][2017][2018]. Variabel independen adalah ukuran bank, leverage, cadangan kerugian pinjaman, margin bunga bersih, rasio aset pinjaman, dan likuiditas. Variabel dependen adalah CAR. Jumlah sampel adalah 27 bank konvensional dengan menggunakan purposive sampling. Dengan menggunakan analisis regresi data panel dengan metode pendekatan General Least Square (GLS). Hasil penelitian ini menunjukkan bahwa ukuran bank, leverage, cadangan kerugian pinjaman, marjin bunga bersih, rasio aset pinjaman berpengaruh signifikan terhadap CAR sedangkan likuiditas tidak berpengaruh terhadap CAR. Hasil penelitian ini diharapkan dapat digunakan sebagai referensi bagi manajer bank dan investor dalam melihat faktor-faktor yang memengaruhi CAR di industri perbankan.

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confidence: 99%

Determinants of capital adequacy ratio on banking industry: Evidence in Indonesia Stock Exchange

Usman

Lestari

Puspa

2019

Jurnal Keuangan Dan Perbankan

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“…In particular, Juca et al (2012) tested the influence of standard determinants of capital structure on the North American financial institutions under the effect of Basel agreements. The study confirmed that the hypothesis holds, and among the significant determinants are asset risks, amount of deposits, profitability and growth opportunities.…”

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Determinants of Banks’ Capital Structure: Evidence from Vietnamese Commercial Banks

Tin¹,

Diaz²

2017

AJFA

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This paper investigates the important factors influencing capital structure decisions. The study focuses on the bank leverage of thirty-one Vietnamese commercial banks from 2009 to 2014, because they play a key role as financial catalysts in the growing economy of Vietnam. The analysis employs multiple linear panel regression models, namely, Ordinary Least Squares (OLS), Fixed Effects (FE), and Random Effects (RE). This research examines five bank-specific factors (i.e., size, profitability, growth rate, taxation and business risk), and three financial market and economic variables (i.e., stock market condition, economy, and inflation) influencing capital structure with debt ratio as the dependent variable. Both the OLS and FE models agree that a Vietnamese bank's size positively affects leverage, which means that the larger the bank, the more debt is incurred. Both models also determine that stock market and economic conditions have negative effects, which implies that in good market conditions, banks lessen their debt loads. In dividing Vietnamese commercial banks into three groups of sizes (i.e., large, medium-sized and small banks) based on chartered capital, both the OLS and RE models agree that size is a positively contributing factor to leverage. However, unlike large Vietnamese banks, medium-sized and small-sized banks tend to still carry a relatively high amount of debt because they are commonly ignored by the ISSN 1946-052X 2017 ajfa.macrothink.org 262 equity markets for reasons of illiquidity and instability, pushing them to rely on borrowing funds even to the point of having higher interest rates. Another interesting finding of this paper is that, only small-sized Vietnamese banks' leverage is negatively affected by stock market and economic conditions. Findings of this paper are robust in using two panel regression models, and can help Vietnamese banks' managers have a general perspective regarding capital structure determinants. This study also offers insights in creating appropriate strategies to controlling factors affecting banks' leverage to achieve the target capital structure that minimizes the cost of capital and maximizes profitability. Asian Journal of Finance & Accounting

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“…Credit rating is an increasingly important component of finance theory and practice (Kisgen, 2009). Moreover, Jucá et al (2012) investigate the banks' capital structure using a sample of U.S. and Brazilian banks. Their findings are in agreement with the work done by Gropp and Heider (2010) in that the standard determinants of capital structure are of first order in explaining the capital structure.…”

Section: Introductionmentioning

confidence: 99%

Capital structure and performance of Middle East and North Africa (MENA) banks: an assessment of credit rating

El‐Masry

2016

Banks and Bank Systems

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The firm's credit rating is an important communication tool and previous research has shown that many companies consider it important in capital structure decisions. This study examines the determinants of capital structure in MENA banks. In addition, it investigates the determinants of credit rating. Further, the impact of credit rating and capital structure on banks' performance is examined. Therefore, this study is an attempt to answer the following questions: 1) what are the main determinants of capital structure? 2) how does credit rating affect capital structure? 3) what are the main determinants of credit rating? and 4) what is the effect of capital structure and credit rating on bank performance? The sample covers 169 banks and is divided into two sub-samples: rated (79) and non-rated banks (90). The results indicate that credit rating directly affects the capital structure decisions as rated banks use more debts than non-rated banks. Banks' performance is positively associated with credit rating and negatively with the capital structure. This study has an implication on investors in their decisions to invest in the banking industry. It also helpful for policy makers to understand how bank's capital structure behaves so they could take it into consideration when issuing new regulations such as Basel.

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Capital Structure Determinant’s of North American Banks and the Compensation Executive Program-An Empiric Study on the Actual Systemic Crisis

Cited by 16 publications

References 30 publications

Determinants of capital adequacy ratio on banking industry: Evidence in Indonesia Stock Exchange

Determinants of capital adequacy ratio on banking industry: Evidence in Indonesia Stock Exchange

Determinants of Banks’ Capital Structure: Evidence from Vietnamese Commercial Banks

Capital structure and performance of Middle East and North Africa (MENA) banks: an assessment of credit rating

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