The Effect of Credit Risk Management on Profitability: An Empirical Study of Private Banks in Syria

Yousuf, Allam; Felföldi, János

doi:10.47535/1991ojbe050

Cited by 3 publications

(3 citation statements)

References 11 publications

(11 reference statements)

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“…All the models show that there is a negative relationship between bank size (SIZE) and profitability significant with NIP (at 10%), and ROA (at 1%) this result is supported by Moussa (2015) and Rizqi and Faisal (2017). Yousuf and Felföldi (2018) found that bank capital adequacy ratio in Syria affects profitability negatively as expressed by ROE they found that stricter capital requirements means better insurance for depositors, however, this leads to a decrease in the rate of return to shareholders. Moreover, Binh and Thomas (2014) respectively and are highly significant with p-value of 0.000.…”

Section: Regression Analysismentioning

confidence: 97%

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Consequences of Basel Accords on Bank Risk-Taking and Profitability: Evidence from Asian Countries

Gabr

ElBannan

2018

Asian Economic and Financial Review

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The main purpose of this paper is to examine the impact of Basel Accord II on bank profitability and risk-taking in three developing Asian countries; Philippines, Thailand and India over the period 2006-2015. Using panel data, the study methodology is to employ both One-way Analysis of Variance (ANOVA) and multiple regression techniques to explore these relationships. Our empirical results show that Basel II, represented by its three pillars; capital regulatory requirement, official supervisory power and private monitoring and market discipline indices all have a significant negative impact on profitability, which may imply that binding regulations have adverse impacts. Furthermore, capital regulatory requirement and private monitoring inversely impact risk-taking while official supervisory power shows a significantly positive effect on bank risk-taking levels. Concluding that bank regulators must insure that the banks in the three countries strengthen their corporate governance and private monitoring to reduce corruption and enhance performance. Same results are obtained when conducting additional analyses to ensure the validity of the results. Contribution/ Originality:This study contributes in the existing literature by empirically examining the impact of Basel II pillars on bank profitability and risk-taking in lower-middle income Asian countries. The focus was on banks in three countries pooled over 10 years. Employing multivariate regression models aided in directly comparing results with previous studies. INTRODUCTIONBanks are perceived to be a major financial intermediary worldwide. They represent the largest and oldest financial institutions today; channelling depositors" savings into investments (Myerson, 2014). The Basel Committee on Banking Supervision established by the Bank for International Settlements (BIS) was formed to harmonize banking regulation, promoting supervision and financial banking stability. As of July 1988, the Basel Committee consisting of eleven members agreed on the International Convergence of Capital Measurements and

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Section: Regression Analysismentioning

confidence: 97%

“…);Agoraki et al (2011);Thangavelu and Findlay (2011);Alam (2012);Lee and Hsieh (2013);Manlagnit (2015);Maraghni and Rajhi (2015);Moussa (2015);Mohammed and Wetere (2016);Yousuf and Felföldi (2018).…”

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confidence: 99%

Consequences of Basel Accords on Bank Risk-Taking and Profitability: Evidence from Asian Countries

Gabr

ElBannan

2018

Asian Economic and Financial Review

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“…Additionally, the authors recommend Nigerian banks to pay adequate attention to enhancing Tier-One capital. Yousuf and Felföldi (2018) identified the effect of credit risk management on profitability in private banks in Syria. Two main criteria were adopted for the management of credit risk in banks: capital adequacy ratio and non-performing loans.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of Credit Risk Management on Profitability of Nepalese Commercial Banks

Pandey

Joshi²

2023

The Harvest

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This study examines the impact of credit risk management on profitability of Nepalese commercial banks. Default rate, cost per loan assets and capital adequacy ratio are the independent variables used in this study. The dependent variables are return on assets (ROA) and return on equity (ROE). The secondary sources of data have been used from annual reports of selected commercial banks and supervision report of Nepal Rastra Bank. The regression models are estimated to test the significance and effect of credit risk management on profitability of Nepalese commercial banks. The beta coefficient of default rate and cost per assets with profitability (ROA, ROE) has been found negative and statistically significant. The negative sign indicates that there is statistically negative relationship between default rate and cost per loan assets with profitability. Likewise, the beta coefficient of capital adequacy ratio with ROA and ROE is found to be positive and statistically significant. The positive sign of beta coefficient indicates that there is statistically positive relationship between capital adequacy ratio and profitability. The study thus recommends an effective credit risk management for commercial banks of Nepal that maintains an optimum level of capital adequacy ratio, controls and monitors cost per loan assets and balances default rate to enhance financial performance.

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The Study of Credit Risk in the Banking Sector and its Effect on Financial Performance Case Study of the Zenith Bank Sierra Leone

Kamara

2024

SSRN Journal

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The Effect of Credit Risk Management on Profitability: An Empirical Study of Private Banks in Syria

Cited by 3 publications

References 11 publications

Consequences of Basel Accords on Bank Risk-Taking and Profitability: Evidence from Asian Countries

Consequences of Basel Accords on Bank Risk-Taking and Profitability: Evidence from Asian Countries

Impact of Credit Risk Management on Profitability of Nepalese Commercial Banks

The Study of Credit Risk in the Banking Sector and its Effect on Financial Performance Case Study of the Zenith Bank Sierra Leone

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