Drivers of bank profitability: Case of Latvia and Lithuania

Titko, Jeļena; Skvarciany, Viktorija; Jurevičienė, Daiva

doi:10.1016/j.intele.2016.02.003

Cited by 32 publications

(25 citation statements)

References 17 publications

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“…Furthermore, as stated by Lee and Kim (2013);Titko, Skvarciany, and Jureviciene (2015) the results for LDRs (H3) do not demonstrate statistically significant effect on bank performance when measured using ROA. These findings indicate that the higher the LDR the more favorable the performance of BPR.…”

Section: Discussionmentioning

confidence: 71%

Bank Performance and Its Underlying Factors: A Study of Rural Banks in Indonesia

Chou

Buchdadi

2016

AFR

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This study determines the effect of variables recommended by the central bank of Indonesia on the performance of rural banks (BPRs) which has the particularity that serve the needs of communities in rural areas, small and medium enterprises (SMEs) in the form of deposits (savings and time deposits) and credit. The analysis technique employed in this study is panel data regression using expenses ratio (BOPOs), capital adequacy ratios (CAR), nonperforming loans (NPLs), loan-to-deposit ratios (LDRs) as independent variables. Return on asset (ROA) and net interest margin ratio (NIM) are used as the proxies of BPRs performance. The data used are from 164 BPRs operating in Java island between 2009 and 2012 period (totaling 656 company years). The results showed that BOPOs and NPLs played crucial role in explaining the BPR performance in Indonesia. The findings in this study indicate that efficiency and prudence in management policies for banking industry in Indonesia becomes more important.

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Section: Discussionmentioning

confidence: 71%

Bank Performance and Its Underlying Factors: A Study of Rural Banks in Indonesia

Chou

Buchdadi

2016

AFR

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“…It reflects the financial health of a bank and its capability in maximizing shareholders' values by expanding their businesses by inventing new products and by competing in the lowest service fees among the peers. Based on the investigation on bank profitability in Latvia and Lithuania from 2008 to 2014, a positive relationship was established between bank size and profitability expressed in volume of deposits and ROE, respectively (Titko, Skvarciany, & Jurevičienė, 2015). Yet, the study found that operational efficiency did not display positive effects on bank profitability.…”

Section: Profitability (Roa Roe)mentioning

confidence: 99%

“…ROE is determined by dividing the net income with shareholders' equity, which becomes a detrimental in determining bank's dividend growth rate in the long-run period, together with its rate of retain retention. Titko, Skvarciany, and Jurevičienė (2015) In essence, the specific determinants of commercial banks' profitability in Malaysia are estimated in the following equations:…”

Section: Measurement Of Dependent Variablementioning

confidence: 99%

Determinants Of Commercial Banks’ Profitability In Malaysia

Iskandar¹,

Yahya²,

Wahid³

2019

J Entrep Bus

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This study investigated the determinants of commercial banks' profitability by selecting capital adequacy, credit risk, management efficiency and liquidity risk as the main drivers toward profitability of ROA and ROE. The main motive behind this study is to acknowledge the reasons of Malaysian banking in having different rates of profitability despite sharing similar loan growth in the country. A regression analysis was performed using the panel dataset comprising eight commercial banks from 2011 to 2017. To this end, the empirical data were collected from DataStream and Annual Report. Among all the determinant variables, capital adequacy did not show statistically significant impact on profitability. The regression findings revealed that credit risk, management efficiency and liquidity risk were among the most significant determinants that dictated banks' profitability. The variables exerted stronger influence on the profitability of ROE, when compared on ROA. In view of these findings, some suggestions may be functional for bank regulatory authorities to intensify and to sustain both robustness and stability of the banking sector in the country. This study had bridged an important gap in the existing literature by enhancing understanding of bank profitability in Malaysia.

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“…Previous studies identify factors which determine bank profi tability defi ning them as internal and external. One type of these studies is based on cross-country evidence (i.e., Claessens, Coleman, & Donnelly, 2018;Adelopo, Lloydking, & Tauringana, 2018;Menicucci & Paolucci, 2016;Bolt, de Haan, Hoeberichts, van Oordt, & Swank, 2012;Beckmann, 2007;Staikouras & Wood, 2004;Demirgüç-Kunt & Huizinga, 2016;1999), another large group of studies investigates bank profi tability in individual countries (i.e., Garcia & Guerreiro, 2016;Tan, 2016;Titko, Skvarciany, & Jurevičiene, 2015;Dietrich & Wanzenried, 2011).…”

Section: ľUbica Lesáková Andrea Ondrušová Miroslava Vinczeovámentioning

confidence: 99%

Factors Determining Profi tability of Small and Medium Enterprises in Selected Industry of Mechanical Engineering in the Slovak Republic – the Empirical Study

Lesáková¹,

Ondrušová²,

Vinczeová³

2019

E+M

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The profi tability analysis revealing factors infl uencing profi tability becomes a very helpful tool providing guidelines for managers in their short-term as well as strategic decision-making process. To take right decisions, managers need to analyse their fi nancial situation, especially in respect to fi rm´s profi tability and the factors infl uencing it. Mechanical engineering industry belongs to key industries in Slovakia. It apparently plays an essential role in the global economy, it is a source of entrepreneurship, innovations and new jobs. Many of enterprises operating in this industry are small or medium-sized. These are some of the reasons for which SMEs´ profi tability and ways of its improvement should draw particular attention. The paper presents results of research carried out in the selected industry of mechanical engineering of SMEs in Slovakia (SK NACE rev. 2 28xxx-Manufacture of machinery and equipment not elsewhere classifi ed). The aim of the research is to analyse and evaluate the development of profi tability in this industry during the period 2008-2015 and to identify key external and internal factors infl uencing profi tability of SMEs over that period. In order to determine the infl uence of basic indicators, the DuPont pyramidal analysis was performed. Data obtained by means of the questionnaire survey enabled to identify the factors affecting profi tability whose infl uence is impossible to calculate. The Friedman and Wilcoxon tests were used to evaluate the answers in questionnaires. Results are connected with the evaluation of three hypotheses defi ned in regard of the established goal of the paper.

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Drivers of bank profitability: Case of Latvia and Lithuania

Cited by 32 publications

References 17 publications

Bank Performance and Its Underlying Factors: A Study of Rural Banks in Indonesia

Bank Performance and Its Underlying Factors: A Study of Rural Banks in Indonesia

Determinants Of Commercial Banks’ Profitability In Malaysia

Factors Determining Profi tability of Small and Medium Enterprises in Selected Industry of Mechanical Engineering in the Slovak Republic – the Empirical Study

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