The determinant of capital adequacy ratio: empirical evidence from Vietnamese banks (a panel data analysis)

Anh, Nguyen Ngoc; Minh, Nguyen Khac

doi:10.1504/aajfa.2020.10026179

Cited by 4 publications

(10 citation statements)

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“…The results of (Ansari and Sanaullah, 2016) show that loan loss reserves have a significant and positive influence on capital adequacy ratio. The results of (Thoa et al, 2020) are inversely proportional to the previous studies results, namely, loan loss reserves have a insignificant and negative effect in the capital adequacy ratio. Liquidity is the banks ability to fulfill their financial obligations when they are due.…”

Section: Introductionsupporting

confidence: 57%

“…The higher the return on equity obtained by the bank, the higher the net profit after tax, which means that the possibility of accumulating retained earnings will increase, so its own capital will increase, and it is estimated that the bank's capital adequacy ratio will DOI: http://dx.doi.org/10.24912/je.v26i1.684 158 increase. The research results of (Thoa et al, 2020) show that the ROE has no effect on the capital adequacy ratio.…”

Section: Theoretical Reviewmentioning

confidence: 92%

“…The loan ratio is a bank asset that is funded by lends or another financial liabilities that last for a long time or exceed one year. Research by (Thoa et al, 2020) shows that the loan ratio has a negative influence on the solvency ratio, but it is insignificant. (Asghari et al, 2014) estimated a study of a Iran's private banks sample and found that the loan to asset ratio has a significant and positive impact on the capital adequacy ratio.…”

Section: Introductionmentioning

confidence: 99%

“…The results of previous research conducted by (Ahmet, 2011) show that liquidity had no effect on the capital adequacy ratio of Turkish banks. The research showed by (Thoa et al, 2020) shows that liquidity has a significant and negative impact on capital adequacy ratio, which means that when bank have high liquid assets, if the bank does not have strategic management and business policies, the risk will be increase appropriate.…”

Section: Introductionmentioning

confidence: 99%

“…Based on the background description above and previous research conducted by (Thoa et al, 2020) in Vietnam in 2020, it shows the influence of bank size and liquidity ratio on the capital adequacy ratio, so researchers are interested in re-examining in Indonesia. Therefore, this study is entitled "Factors Affecting the Capital Adequacy Ratio of Banks Listed Indonesia Stock Exchange".…”

Section: Introductionmentioning

confidence: 99%

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Factor Affecting the Capital Adequacy Ratio of Banks Listed in Indonesia Stock Exchange

Setiawan

Muchtar²

2021

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The purpose of this study is to conclude the factors that affect bank capital adequacy ratios. The sample used is 42 banks listed on the Indonesia Stock Exchange in 2015-2019. The analysis method used was panel data regression and using purposive sampling for the sampling technique. The independent variables in this study are loan loss reserves, return on equity, bank size liquidity ratio and loan ratio, and capital adequacy ratio is the dependent variable. The results show that bank size and the return on equity have a positive effect on capital adequacy ratio, while loan ratio has a negative effect on capital adequacy ratio. The liquidity ratio and loan loss reserve have no effect on the capital adequacy ratio. It is expected that the results of this study will provide a reference for companies to understand the factors that affect capital adequacy. Managerial implications: Banking companies are expected to increase the total number of assets held, increase return on equity and reduce bank loan ratios to avoid the risk of bad credit.

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Section: Introductionsupporting

confidence: 57%

Section: Theoretical Reviewmentioning

confidence: 92%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Factor Affecting the Capital Adequacy Ratio of Banks Listed in Indonesia Stock Exchange

Setiawan

Muchtar²

2021

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The Dynamics of Macroeconomic and Microeconomic Determinants with The Capital of Rural Banks

Ponziani

2022

jejak

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The research aims to investigate the dynamics among rural banks’ capital, macroeconomic variables and microconomic variables. Macroeoconomic variable consists of infllation and interest. Microeconomic variables consist of loan to deposi ratio, nonperforming loans, and return on assets. The data are excerpted from OJK and BI’s website. The data are monthly data extending from January 2010 until May 2021. The testing method used is vector error correction model (VECM). The results show that rural banks’ capital is significantly affected the previous state of capital and profitability. This indicates the importance of sustainability of capital in rural banks and how it is very much dependent upon the profitability of the rural banks. Further, the research results show that there ar two cointegrating functions in the model. Both cointegration functions are influential to inflation. The speed adjustment derived from the residuals of capital function is 0.6754% and 13.5669% for residual from inflation function itself. The slow adjustment process is due to the small market share and assets of rural banking sector. In addition, capital, nonperforming loans, and return on assets are pivotal for central bank monetary policy to control inflation.

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Bank-specific performance indicators, macroeconomic variables and capital adequacy of Nigerian banking industry

Ikue

Denwi

Sodipo³

et al. 2022

IJRBS

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This paper examined bank-specific performance indicators and macroeconomic factors affecting the short-term financing obligation of Nigerian banks from 2010 to 2019. The data for the study are sourced annually from the financial statements of the selected Deposit Money Banks and the Central Bank of Nigeria Statistical Bulletin. The panel unit root and co-integration tests are employed to ascertain the sustainability of the bank-specific performance indicators. The models for the industry were cast in a host of panel frameworks such that we estimated the static and dynamic panel models. The study observed that the capital adequacy ratio, which is the short-term financing obligation of Nigerian banks was elastic to bank profitability positively. In addition, interbank call rate, bank size, and oil price positively influence the capital adequacy ratio over time, whereas loan-to-deposit ratio, inflation and exchange rate exacerbate the capital adequacy ratio. Consequently, we canvass that Nigerian banks should reduce dividend payouts and increase retained profits as a buffer against exposed risks.

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The determinant of capital adequacy ratio: empirical evidence from Vietnamese banks (a panel data analysis)

Cited by 4 publications

References 0 publications

Factor Affecting the Capital Adequacy Ratio of Banks Listed in Indonesia Stock Exchange

Factor Affecting the Capital Adequacy Ratio of Banks Listed in Indonesia Stock Exchange

The Dynamics of Macroeconomic and Microeconomic Determinants with The Capital of Rural Banks

Bank-specific performance indicators, macroeconomic variables and capital adequacy of Nigerian banking industry

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