The impact of bank capital, bank liquidity and credit risk on profitability in postcrisis period:‎ A comparative study of US and Asia

Abbas, Faisal; Iqbal, S. M.; Aziz, Bilal

doi:10.1080/23322039.2019.1605683

Cited by 104 publications

(105 citation statements)

References 50 publications

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“…Moreover, Jacoub et al (2020) and Al-Homaidi et al (2018) found that non-performing financing correlated to capital, assets, management, earnings, and liabilities, especially financing deposit ratio, corporate governance index, earning, and capital of Islamic bank. These findings support by some previous studies such as Mukhibad et al (2020), Abbas et al (2019, andYehorycheva et al (2017).…”

Section: Introductionsupporting

confidence: 93%

The Relationship of Macro-risk Indicators, Internal Factors, and Risk Profile of Islamic Banking in Indonesia

2020

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This study is essential because of Islamic banks have a level of health with higher NPF than conventional banks and purposes to examines whether macroeconomic indicators (macro-risk), internal factors of banking (GCG-earnings-capital ) and risk profile have correlation in term Indonesian Islamic banking. The method used is the correlation analysis involving four macro-risk variables (Forex; BI rate; Inflation and GDP), three GEC variables (GCG; ROA, and CAR) and two risk profile (FDR and NPF). The number of samples of the ten largest Indonesia sharia commercial banks with the 2011-2018 period. We find that macroeconomic indicator is positively correlated to non-performing financing (NPF), the GEC positively correlated to NPF and FDR; GEC negatively correlated to macro-risk indicators, generally. However, some indicators negatively correlated such as GDP-corporate governance, Forex-profitability, GDP-efficiency, BI rate-capital and profitability-NPF. The study proposed implications for managerial to understand the role of relationship of macroeconomic, internal factors and risk profile in Islamic bank lending.

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Section: Introductionsupporting

confidence: 93%

The Relationship of Macro-risk Indicators, Internal Factors, and Risk Profile of Islamic Banking in Indonesia

2020

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“…Their findings confirm the work of Ghosh [39]. Others use credit risk as explanatory variable and conclude that there is a relation between credit risk and bank profitability in the US and Asia [26]. We argue that, the pursuit of profitability motives in the presence of weak internal control systems exacerbate bank credit risk exposure.…”

Section: Control Variablessupporting

confidence: 84%

“…Bank credit risk management strategies should therefore be comprehensive to address issues of default and prevent increasing non-performing loans. Most literature on credit risk uses ratios such as non-performing loans to total loans, provision for loan losses and loan loss reserves [5,6,26] to measure credit risk.…”

Section: Credit Riskmentioning

confidence: 99%

Internal Controls and Credit Risk in European Banking: The Basel Committee on Banking Supervision Framework Approach

Akwaa-Sekyi¹

2020

Banking and Finance

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Poor corporate governance practices have been cited as contributory to the 2007 global financial crisis. The chapter explores a qualitative self-regulation approach to address a major risk facing banks using the Basel Committee on Banking Supervision (BCBS) framework of internal controls. The study examines the effect of the qualitative principles of the BCBS internal control framework on credit risk. Corporate institutions use internal control frameworks to address the most operational risks, but the current study hypothesizes a possible relation with the credit risk. This research covers banks from selected EU countries covering some period before and after the 2007 financial crisis using a fixed-effect model. We report a significant relationship between board functions and activities, board structure and board monitoring, and credit risk. The results indicate that investment in high-risk assets, bank profitability and board chair being ex-CEO increases credit risk in European banking. The chapter extends the scope of a previous work that used the elements of the COSO internal control framework on a single country. This quantitative measure of qualitative constructs of the framework complements existing research that uses algorithms and simulations to study credit risk.

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“…Liquid assets to total assets (Yousaf et al, 2018;Ali et al, 2020) Loan growth Loans to Total Assets (Abbas, Iqbal et al, 2019) Bank size Natural Log of Total Assets (Ali et al, 2019;Lee & Hsieh, 2013) Economic growth Real gross domestic product (Abbas & Masood, 2020b) Inflation Rate Annual change in Consumer Price Index (Lee & Hsieh, 2013) included the influential factors of each capital ratio to explore the difference in speed of adjustment to reduce the proxy definition and measurement bias.…”

Section: Liquiditymentioning

confidence: 99%

“…The regulators tighten the redesigning frameworks for the required capital for financial intuitions (Bakkar et al, 2019). Over the last decade, researchers have examined many facets of bank capital (Abbas, Iqbal et al, 2019;Dermine, 2015;De Jonghe & Öztekin, 2015), particularly for the assessment of required capital on the performance (Berger & Bouwman, 2013;Bitar et al, 2018;Chortareas et al, 2012) and risk-taking banks (Allahrakha et al, 2018;Ding & Sickles, 2018Färe et al, 2004).…”

Section: Introductionmentioning

confidence: 99%

How commercial banks adjust capital ratios: Empirical evidence from the USA?‎

Abbas

Ali

Yousaf

et al. 2020

Cogent Business & Management

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The impact of bank capital, bank liquidity and credit risk on profitability in postcrisis period:‎ A comparative study of US and Asia

Cited by 104 publications

References 50 publications

The Relationship of Macro-risk Indicators, Internal Factors, and Risk Profile of Islamic Banking in Indonesia

The Relationship of Macro-risk Indicators, Internal Factors, and Risk Profile of Islamic Banking in Indonesia

Internal Controls and Credit Risk in European Banking: The Basel Committee on Banking Supervision Framework Approach

How commercial banks adjust capital ratios: Empirical evidence from the USA?‎

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