Financial Information Influencing Commercial Banks Profitability

Shamki, Dhiaa; Alulis, Ibrahim Khalaf; Sayari, Karima

doi:10.5539/ijef.v8n6p166

Cited by 5 publications

(6 citation statements)

References 28 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The level of capital availability as measured by the CAR ratio shows a bank's potential ability to generate profits as the results of the study; (Zahrah et al, 2019); (Anggreni, 2014); (Shamki et al, 2016); (Nahar & Prawoto, 2017); (Kinanti, 2017); (Amelia, 2015); (Hantono, 2017); (Sabir et al, 2012); (Chou & Buchdadi, 2016) and (Alshatti, 2016). Research with the opposite result was carried out by (Sudiyatno, 2013); (Wibowo, 2013), while research (A. Rifqah & Hassan, 2019) got significant adverse results.…”

Section: Literature Reviewmentioning

confidence: 55%

Performance analysis of sharia commercial banks in Indonesia before the covid pandemic period (2015-2019)

Handayani¹,

Rahmawati²,

Tubastuvi³

et al. 2021

IJRBS

View full text Add to dashboard Cite

Overcoming the impact of the Covid pandemic on Islamic banking in Indonesia, management must take strategic steps based on predictions and previous performance identification. Identify performance, information on the factors that affect the performance of Islamic banking in Indonesia is needed. Several aspects that are considered to affect Islamic banking performance that management must consider are capital, liquidity aspects, credit risk, and efficiency. This research examines the influence of the aspects of capital (Capital Adequacy Ratio and Third Party Funds), liquidity (Finance to Debt Ratio ), credit risk (Non-Performing Financing).) and operational efficiency (BOPO) on the performance of Islamic banking in Indonesia 5 (five) years before the Covid pandemic occurred in Indonesia (2015-2019). The results showed that these five aspects had a simultaneous effect on Islamic banking performance in Indonesia, with a termination coefficient of 94.4%. Of the five variables, CAR, FDR, NPF, and BOPO significantly affect performance, while TPF has no significant effect on performance (Return on Assets).

show abstract

Section: Literature Reviewmentioning

confidence: 55%

Performance analysis of sharia commercial banks in Indonesia before the covid pandemic period (2015-2019)

Handayani¹,

Rahmawati²,

Tubastuvi³

et al. 2021

IJRBS

View full text Add to dashboard Cite

show abstract

“…This result is supported by Sufyan's argument (2011) that banks face lower costs when well-capitalized then financing costs and dependence on external financing to generate a higher decline in profitability. According to Shamki et al (2016), high capital makes banks relatively safer in liquidation, reducing dependence on external financing and hence increasing profits. To sum up, the main sign of the positive coefficient estimate for equity-to-assets indicates the efficient management of banks' capital structure.…”

Section: Discussionmentioning

confidence: 99%

“…The high capital helps banks become quite safer during the liquidation and decrease their external fund resources, leading to their enhanced performance (Shamki, Alulis, & Sayari, 2016). Prabowo (2018), Alhamdan and Alqadah (2013) say that banks' financing costs will be few and depend on external financing to increase the profits achieved when banks are capitalized well.…”

Section: Literature Reviewmentioning

confidence: 99%

The impact of the capital structure on Iraqi banks’ performance

Jadah

Hassan

Hameed

et al. 2020

Investment Management and Financial Innovations

View full text Add to dashboard Cite

The current paper aims to investigate the effect of the capital structure on the profitability of a panel of eighteen Iraqi listed banks from 2009 to 2018. Furthermore, the unbalanced panel data approach (fixed effect and random effect) is utilized to explore the influence of capital structure on banks’ profitability. This study’s findings point out that the banks’ performance in terms of return on assets has a significant positive association with equity to assets ratio, liabilities to assets ratio, and bank size. On the other hand, long-term debt to assets ratio, short-term debt to assets ratio, and total debt to assets ratio showed a significant negative effect on banks’ performance. This study highlights new facts for an enhanced understanding of the capital structure and its association with banks’ performance in developing economies like Iraq. This study is considered one of the earliest studies of its types by determining the Iraqi banks’ optimal structure and examining capital structure’s impact on their performance. Nevertheless, the study contributes significantly to theoretical literature, policymakers, and industry so that conventional Iraqi banks can boost their performance.

show abstract

“…Luo et al (2019) asserts that Chinese banks extensively use WMPs, more specifically, “non-guaranteed WMPS (NG-WMPS)” to expand and pursue profits. As examined by Ramlan and Adnan (2016), Shamki et al (2016), “return on equity or ROE” is a more suitable measure for bank profitability. Ultimately, ROE is used as our primary measure for bank profitability, as well as return on assets ROA as a robustness check.…”

Section: Data and Empirical Methodologymentioning

confidence: 99%

Shadow banking from China's perspective: an empirical analysis of bank-issued wealth management products

Shah

Abbas

et al. 2021

JEAS

View full text Add to dashboard Cite

PurposeWealth Management Products (WMPs) are the largest and most crucial component of China's Shadow banking, which are off the balance sheet and considered as a substitute for deposits. Commercial banks in China are involved in the issuance of WMPs mainly to; evade the regulatory restrictions, move non-performing loans away from the balance sheet, chase the profits and take advantage of yield spread (the difference between WMPs yield and deposit rate).Design/methodology/approachIn this study, the authors investigate what bank related characteristics and needs; influenced and prompted the issuance of WMPs. By using a quarterly panel data from 2010 to 2019, this study performed the fixed effects approach favored by the Hausman specification test, and a feasible generalized least square (FGLS) estimation method is employed to deal with any issues of heteroscedasticity and auto-correlation.FindingsThis study found that there is a positive and significant association between the non-performing loan ratio and the issuance of WMPs. Moreover, profitability and spread were found to play an essential role in the issuance of WMPs. The findings of this study suggest that WMPs are issued for multi-purpose, and off the balance sheet status of these products makes them very lucrative for regulated Chinese commercial banks.Research limitations/implicationsNon-guaranteed WMPs are considered as an item of shadow banking in China, as banks do not consolidate this type of WMPs into their balance sheet; due to that reason, there is no individual bank data available for the amount of WMPs. The authors use the number of WMPs issued by banks as a proxy for the bank's exposure to the WMPs business.Practical implicationsFrom a regulatory perspective, this study helps regulators to understand the risk associated with the issuance of WMPs; by providing empirical evidence that Chinese banks issue WMPs to hide the actual risk of non-performing loans, and this practice could mislead the regulators to evaluate the bank credit risk and loan quality. This study also identifies that Chinese banks issue WMPs for multi-purpose; this can help potential investors to understand the dynamics of WMPs issuance.Originality/valueThis research is innovative in its orientation because it is designed to investigate the less explored wealth management products (WMPs) issued by Chinese banks. This study's content includes not only innovation but also contributes to the existing literature on the shadow banking sector in terms of regulatory arbitrage. Moreover, the inclusion of FGLS estimation models, ten years of quarterly data, and the top 30 Chinese banks (covers 70% of the total Chinese commercial banking system's assets) make this research more comprehensive and significant.

show abstract

Financial Information Influencing Commercial Banks Profitability

Cited by 5 publications

References 28 publications

Performance analysis of sharia commercial banks in Indonesia before the covid pandemic period (2015-2019)

Performance analysis of sharia commercial banks in Indonesia before the covid pandemic period (2015-2019)

The impact of the capital structure on Iraqi banks’ performance

Shadow banking from China's perspective: an empirical analysis of bank-issued wealth management products

Contact Info

Product

Resources

About