Internal and external determinants of listed commercial banks' profitability in India: dynamic GMM approach

Homaidi, Eissa A. Al; Almaqtari, Faozi A.; Yahya, Ali T.; Khaled, Amgad S.D.

doi:10.1504/ijmef.2020.105333

Cited by 38 publications

(33 citation statements)

References 62 publications

(121 reference statements)

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“…The theory of Keyness stated, the amount saved is influenced by the size of the income level of the consumer and are not influenced by the interest rate. This study in accordance with the research of Al-Homaidi et al [25] and Jaara et al [26] but different with Krishna et al [27] research which states that economic growth as measured as a percentage change in GDP is not significantly correlated with ROA.…”

Section: The Influence Of Gross Domestic Product Against Roasupporting

confidence: 79%

“…This can be seen from the high interest of the public to save funds in Islamic Commercial Banks for reasons of security and a high level of profit sharing. The findings of this research are in line with the research conducted by Pritadyanaet al [33], but different from the research conducted by Monica [34] and Al-Homaidi et al [25].…”

Section: The Influence Of Nim Against Roecontrasting

confidence: 61%

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The Influence of the Capital Adequacy Ratio, Net Interest Margin, Gross Domestic Product and Inflation on the Profitability of Islamic Banks in the Middle of the Pandemic Covid-19

Hasriadi¹,

Marwansyah²,

Syarief³

2022

Proceedings of the 4th International Conference on Economics, Business and Economic Education Science, ICE-BEES 2021, 27-28 Jul

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This study aims to analyze the influence of Capital Adequacy Ratio, Net Interest Margin, Gross Domestic Product, and inflation on the profitability of sharia banks that are listed on the financial services authority of Indonesia period 2010 to 2019. The population is the entire Islamic banks which are listed on the financial services authority the years 2010-2019. The sample was selected using purposive sampling and consists of 10 Islamic banks in accordance with the criteria. Methods of data analysis is Partial Least Square-Structural Equation Modeling (PLS-SEM). Path analysis is used to test hypotheses on the model that has been created. The results showed that the Net Interest Margin and Capital Adequacy Ratio is a determinant of the internal affects the Return on Assets. Net Interest Margin has a significant negative effect on Return on Assets but positive and significant effect on Return on Equity. The Capital Adequacy Ratio has positive and significant effect on Return on Assets but negatively affect Return on Equity. The results showed that the Gross Domestic Product as an external factor has a positive and significant effect on Return on Assets and Return on Equity, but inflation does not affect the Return on Assets and Return on Equity.

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Section: The Influence Of Gross Domestic Product Against Roasupporting

confidence: 79%

Section: The Influence Of Nim Against Roecontrasting

confidence: 61%

The Influence of the Capital Adequacy Ratio, Net Interest Margin, Gross Domestic Product and Inflation on the Profitability of Islamic Banks in the Middle of the Pandemic Covid-19

Hasriadi¹,

Marwansyah²,

Syarief³

2022

Proceedings of the 4th International Conference on Economics, Business and Economic Education Science, ICE-BEES 2021, 27-28 Jul

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show abstract

“…e profitability of Chinese and Pakistani banks is measured by two important indicators, which have been extensively used in existing studies [36][37][38][49][50][51][52][53][54][55][56][57][58][59][60]. e first indicator is the return on assets (ROA), calculated as the ratio of net income to average total assets.…”

Section: Variablesmentioning

confidence: 99%

The Impact of Intellectual Capital on Bank Profitability during COVID‐19: A Comparison with China and Pakistan

Haris

Irfan

2022

Complexity

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This study aims to examine how the relationship between intellectual capital (IC) and bank profitability changed during COVID-19. Based on the data of 34 Chinese banks and 39 Pakistani banks, this study uses ordinary least squares (OLS) to examine this relationship during the COVID-19 era. Profitability is measured by return on assets (ROA) and return on equity (ROE), and IC is measured by the value added intellectual coefficient (VAIC) model. The findings show that, even during the COVID-19 pandemic, IC has managed to sustain its positive influence on bank profitability in China and Pakistan. Among IC components, our study reports that human capital is the only IC resource that continues to enhance ROA and ROE of Chinese and Pakistani banks during the pandemic period. Our study suggests that policymakers should pay more attention to IC resources, which has the potential to improve banks’ profitability even during crisis times.

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“…They are the bank-specific factors such as bank size, liquidity, capital adequacy, interest income, ratio of loan loss provision over total loans, equity over total assets, the ratio of noninterest income over gross revenue, total deposits to total assets, etc. (Garcia and Guerreiro, 2016;Tan, 2016;Menicucci and Paolucci, 2016;Al-Homaidi et al, 2020). On the other hand, the external factors are those that reflect the economic and legal environments where banks operate (Sufian and Chong, 2008).…”

Section: Review Of Literature and Formulation Of Hypothesismentioning

confidence: 99%

Technical efficiency, intellectual capital efficiency and bank performance in emerging markets: the case of India

Maji

Hussain

2021

JAMR

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PurposeThis paper examines the impacts of technical efficiency and intellectual capital efficiency (ICE) on bank performance in India after controlling other bank-, industry-specific and macroeconomic variables.Design/methodology/approachThe authors use secondary data on listed Indian commercial banks for the period 2005–2018. The authors use data envelopment analysis (DEA) technique-based Malmquist index (MI) to obtain technical efficiency and value-added intellectual coefficient (VAIC) model for computing ICE. System generalized method of moments (GMM) (SGMM) model in a dynamic framework is used to estimate the parameters, which takes into consideration issues of endogeneity, heterogeneity and persistence of bank performance. Further, the authors use quantile regression model to examine whether the impacts of covariates are homogeneous at different locations of the conditional distribution of bank performance.FindingsThe authors find positive impact of technical efficiency and negative influence of market concentration on bank performance. The results of the study support the efficient structure (ES) hypothesis (ESH). The authors observe positive influence of intellectual capital (IC) on bank performance, which indicates the relevance of intellectual resources in enhancing banks' value. Further, the results of quantile regression indicate that the impacts of technical efficiency and ICE are more pronounced at higher quantiles of the conditional distribution of bank performance.Originality/valueThis paper in the Indian context examines the influences of technical efficiency and ICE after controlling bank-, industry-specific and macroeconomic factors.

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Internal and external determinants of listed commercial banks' profitability in India: dynamic GMM approach

Cited by 38 publications

References 62 publications

The Influence of the Capital Adequacy Ratio, Net Interest Margin, Gross Domestic Product and Inflation on the Profitability of Islamic Banks in the Middle of the Pandemic Covid-19

The Influence of the Capital Adequacy Ratio, Net Interest Margin, Gross Domestic Product and Inflation on the Profitability of Islamic Banks in the Middle of the Pandemic Covid-19

The Impact of Intellectual Capital on Bank Profitability during COVID‐19: A Comparison with China and Pakistan

Technical efficiency, intellectual capital efficiency and bank performance in emerging markets: the case of India

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