Download or read book Influence of Macro Economic Factors Banking Industry Factor and Banking Specific Factors on Banking Profitability in Indonesia written by I Made Surya Negara Sudirman and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study aims to investigate the influence of macroeconomic factors, industry specific factors and specific factors in the bank's profitability of Indonesian banking. This research was conducted with a purposive sampling method, where the sample used is a bank listed on the Indonesia Stock Exchange and publicizing the full financial statements from 2006 to 2011. Based on those samples criteria, obtained samples of 18 banks. Data analysis method used in this research is the analysis of panel data. The analysis shows fixed effect method produces the best model for predicting the profitability of banks in Indonesia compared to method of pooled and random effect.The results are consistent with the theory underlying profitability of the bank, which was conducted by Ho and Saunders (1981), known by the dealership theory. The theory states that as financial intermediaries, bank expects to get a positive net interest margin (NIM) to face uncertainty generated by the unsynchronized between the deposits offers and credit demands. That consistency is shown with the support of the results of empirical testing of hypotheses related to the operating costs and capital adequacy for dependent variable which measured by the NIM. For the dependent variable of profitability as measured by ROA, consistency is supported by the empirical testing of hypotheses related to credit risk, operational costs, inflation and economic growth. The theory underlying negative impact of market concentration conducted by Bain (1951) known as the structure conduct performance theory is not supported by empirical results.

Download or read book The Influence of Bank and Board Characteristics written by Rochania Ayu Yunanda and published by . This book was released on 2011 with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt: The banking industry has a significant role in an economy which serves as an intermediary to mobilize fund from the surplus units to the deficit units. Examining its performance could be beneficial to the stakeholders in assessing its profitability, liquidity and solvency. Good corporate governance is needed to ensure that the banks are accountable and provide reliable information regarding its financial performance. Indonesia as one of the developing countries is heading towards the implementation of good corporate governance. The Board of Commissioners has a foremost function in supervising the company's business activities in Indonesia. This study examined the factors influencing the financial performance of commercial banks in Indonesia. The study argued that financial performance could be influenced by the presence of good corporate governance. Furthermore, the study examined whether the size and the independence of the Board have significant roles in determining banking financial performance of commercial banks in Indonesia. This study examined the financial performance of 30 commercial banks including eight banks which provided both conventional and Islamic banking services and two fully-fledged Islamic banks. The dependent variables of this study comprised eight (8) financial ratios which are classified into three (3) categories namely profitability, liquidity and risk and solvency. The independent variables consisted of two groups i.e. bank characteristics (bank size, bank age, types of banks and Non Performing Loans (NPL)) and Board characteristics (Board size and Board independence). The study found that asset size has a statistically significant relationship with profitability only. Age was found to be a factor influencing profitability and liquidity. However, it did not show a statistically significant influence. In general, the results showed that commercial banks involved in Islamic banking and conventional banks have almost similar financial performance. These results are acceptable since both types of banks operated in the same industry and in the same country. NPL is found to have a statistically negative significant relationship with profitability and liquidity ratios. Lastly, the results indicated that size of the Board has a positive relationship with financial performance, but the study does not support the prediction that independent directors strengthen the company performance. The findings of the study will be useful to academicians, bankers, and regulators. Discussions relating to the factors influencing performance are provided. Other than that, the results suggested that corporate governance guidelines should reconsider determining and stating the number of Board members and composition of Board independence. The regulators should emphasize more on the specific roles of each Board, especially the Board of Commissioners.

Download or read book The Indonesian Financial System written by Mr.John D. Montgomery and published by International Monetary Fund. This book was released on 1997-04-01 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: The structure of the financial system in Indonesia is examined through the analytical lens of the system’s contribution to the growth, stability, and efficiency of the Indonesian economy. The focus is on the banking system and securities markets, which are the primary mechanisms for mobilizing savings and allocating investment funds. Five key policy issues are highlighted: (1) the level of bank capitalization; (2) the supervision and regulation of banks; (3) the structure of banking markets; (4) the deepening of securities markets; and (5) the supervision and regulation of securities markets.

Download or read book Does Macroprudential Instruments and Market Power Matter on Banks Performance written by Tumpak Silalahi and published by . This book was released on 2013 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: The research question of this dissertation is divided into 3 folds: firstly, whether the market power or market structure that concentrated on bank industry more influential on the profitability of banks? Secondly, whether macroeconomic cycle more influence on Indonesian bank profitability? And thirdly, whether Macroprudential regulation influence on bank profitability? Research about the role of Macroprudential regulation.Based on explanation above, this research is intended to study the things as follows:1. To review and analyze the impact on Indonesian macroprudential policies on performance of commercial banks in Indonesia.2. To study the impact of market power or market concentration on commercial bank profitability.3. To examine the relationship between economic cycle with commercial banks performance.4. To review and analyze interaction between market power or market concentration and macroprudential policy in conjunction with the profitability of commercial banks in Indonesia.To achieve those objectives, research methodologies develop in this paper based on the econometric model as a primarily tool using quarterly commercial bank data since 2007 until recently as a compliment to descriptive and statistical analysis.The hypothesis of this dissertation research is that the timely macroprudential policies are very important in maintaining the financial stability and an effective conventional monetary policy is important to stimulate economic output. However, the structure of market power or concentration of the commercial banks may be matter on effectiveness of macroprudential policy. Moreover, several Indonesian banking policies had been taken during the global financial crises in the year of 2008/2009 could be used as a learning lesson to reach the ultimate objective of Indonesian sustainable economic growth while maintaining macroeconomic stability.

Download or read book The Influence of Fundamental Factors to Liquidity Risk on Banking Industry written by Harjum Muharam and published by . This book was released on 2013 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt: Bank and risk are two things that cannot be separated from each other. Both conventional and Islamic banks are more or less similar in risk summary. One of the critical risk is liquidity risk that caused by bank disabilities on meeting their maturity dates of depositors. Therefore it needs further observations to control their liquidity risk. This study investigates the influence of CAR, profitability ratios, NIM, liquidity gaps, and RLA belongs to liquidity risk on banking industry. The population of this study consists of conventional and Islamic banks. The selection of samples uses purposive sampling method. The samples are divided into 3 conventional banks and 3 Islamic banks. The study is based on secondary data in a period of five years, i.e. 2007-2011. The statistical analysis of secondary data has been divided into three, which are descriptive, regression and hypothesis testing. The study finds negative and significant influence of CAR and ROE to liquidity risk on conventional banks, while ROA and RLA have positive and insignificant effect. In Islamic banks, the research finds positive and significant impact of NIM and ROE to dependent variable, whereas liquidity gaps and RLA have insignificant affect. Liquidity gaps have positive and significant effect to liquidity risk in conventional banks, while ROA has positive direction in Islamic banks. In addition, NIM in first model and CAR in second model is found to be negative and insignificant at 5% significance level.

Download or read book Financial Sector Crisis and Restructuring written by Carl-Johan Lindgren and published by . This book was released on 1999 with total page 103 pages. Available in PDF, EPUB and Kindle. Book excerpt: An IMF paper reviewing the policy responses of Indonesia, Korea and Thailand to the 1997 Asian crisis, comparing the actions of these three countries with those of Malaysia and the Philippines. Although all judgements are still tentative, important lessons can be learned from the experiences of the last two years.

Download or read book The Boom Bust and Restructuring of Indonesian Banks written by Mari Pangestu and published by . This book was released on 2006 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies why currency and monetary shock hit Indonesia's economy and banking sector so severely and the measures that were taken to deal with the banking crisis, the lessons learned, and challenges faced in restructuring and strengthening the banking system. The vulnerable state of the banking sector, in combination with exchange rate and interest rate shocks, led to a systemic banking crisis. The priorities for bank restructuring are to complete the separation of nonviable from viable banks, recoup losses, implement new rules and regulations, and develop an incentive-based system for the consolidation of banks.

Download or read book Indonesia Anatomy of a Banking Crisis written by Barbara E. Baldwin and published by INTERNATIONAL MONETARY FUND. This book was released on 2001-05-01 with total page 139 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study looks at the first two years of the banking crisis that erupted in Indonesia in late 1997. It finds that the banking sector was weak at the outset, and that governance problems intensified the crisis and seriously delayed its resolution. Although a strategy was put in place over the initial months, protracted delays in implementation led to an explosion in the costs of resolution. By end-1999, the critical elements to reconstruct the banking system were in place, and the political transition seemed completed; but, in a continuing unsettled environment, the new authorities still faced daunting challenges. This study looks at the first two years of the banking crisis that erupted in Indonesia in late 1997. It finds that the banking sector was weak at the outset, and that governance problems intensified the crisis and seriously delayed its resolution. Although a strategy was put in place over the initial months, protracted delays in implementation led to an explosion in the costs of resolution. By end-1999, the critical elements to reconstruct the banking system were in place, and the political transition seemed completed; but, in a continuing unsettled environment, the new authorities still faced daunting challenges. This study looks at the first two years of the banking crisis that erupted in Indonesia in late 1997. It finds that the banking sector was weak at the outset, and that governance problems intensified the crisis and seriously delayed its resolution. Although a strategy was put in place over the initial months, protracted delays in implementation led to an explosion in the costs of resolution. By end-1999, the critical elements to reconstruct the banking system were in place, and the political transition seemed completed; but, in a continuing unsettled environment, the new authorities still faced daunting challenges.

Download or read book Factors Affecting Mudaraba Deposits on Islamic Commercial Bank in Indonesia written by and published by . This book was released on 2015 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt: This research is aimed to investigate the factors affecting Mudaraba deposits on Islamic Commercial Bank in Indonesia using Fixed Effect Model (FEM) method in the panel data. Four variables, profit sharing rate, interest rate, GDP, and number of Islamic Commercial Bank's branch offices, are thought to have influence on the volume of Mudaraba deposits. It uses quarterly time series in the period of 2004 - 2013. The research was conducted at Bank Muamalat Indonesia, Bank Syariah Mandiri, and Bank Mega Syariah Indonesia. The Result shows that the volume of Mudaraba deposits on Islamic Commercial Bank in Indonesia does not depend on profit sharing rate, interest rate, and the number of Islamic Commercial Bank's branch office but depend on Gross Domestic Products (GDP). This research supported the view that in order to increase the volume of Mudaraba deposits in Indonesia, it is suggested that Islamic Banks are expected to add to its market share by entering the large corporate sector (SOEs and private enterprises upper middle) so that third-party funds, in particular Mudaraba deposits can and able to compete with Conventional Commercial Bank market share. Islamic Commercial Banks can thus optimally as executive financial intermediation for the financing and distribution on the real sector and not only focus on the retail sector and SMEs. Lastly, Islamic Commercial Banks in Indonesia should also provide a more branch offices of Islamic Commercial banks are built in order third-party funds and were able to distribute more optimally targeted at the real sector. The author suggest that the results of this study can add to the results of the study in order to develop Islamic Commercial Banking in Indonesia as well as to provide input related to policy measures in increasing deposits, especially deposits Mudaraba with the factors that influence it.

Download or read book The Boom Bust and Restructuring of Indonesian Banks written by Mari Pangestu and published by International Monetary Fund. This book was released on 2002-04 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies why currency and monetary shock hit Indonesia's economy and banking sector so severely and the measures that were taken to deal with the banking crisis, the lessons learned, and challenges faced in restructuring and strengthening the banking system. The vulnerable state of the banking sector, in combination with exchange rate and interest rate shocks, led to a systemic banking crisis. The priorities for bank restructuring are to complete the separation of nonviable from viable banks, recoup losses, implement new rules and regulations, and develop an incentive-based system for the consolidation of banks.

Download or read book Effect of Interest Rates and Bank Size on Profitability of Islamic Banks in an Interactive Model written by Muhammad Muzammil and published by . This book was released on 2020 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper is aimed at studying the role of interest rates and bank size along with other macroeconomic and firm-level factors in determining the Islamic bank's profitability. We also explored the intricate complementarities of these two factors in the relationship between Profitability and bank-level factors. Other macro variables like GDP, Inflation and Exchange rate were taken as control. We have used the interaction effect of Bank-level variables like spread, efficiency, default risk, capital adequacy, liquidity, and leverage which were taken as predictors on profitability. Profitability was measured by Return on Asset and Equity. Data from full fledge Islamic banks in Pakistan was taken during the period of 2006-2018. These Islamic banks included were Al Baraka Bank Pakistan Ltd, BankIslamiPakistan Ltd (BIPL), Dubai Islamic Bank Pakistan Ltd (DIB), and Meezan Bank Limited. The regression analysis shows there is a significant impact of macroeconomic indicators, bank-specific variables, and interaction effect of interest and size on the Islamic bank's profitability. The interest rate and exchange rate have a negative and significant impact on ROE. Whereas Asset Quality, Gearing, and Capital Adequacy seem to have a positive and significant effect on profitability. Bank specific variables such as credit risk, spread ratio, and size also seem to negatively affect profitability. With regards to interaction effect, both size and interest rate seems to complement the effect of Asset Quality, Credit Risk, Spread Ratio on Profitability. However, both size and interest rates have a negative complementary with gearing in predicting profitability. Therefore, this study will help the policymakers, regulars, and bank management to identify the key drivers of profitability so they can increase the profitability of Islamic Banks in Pakistan.

Download or read book Impact of Bank specific Characteristics Macroeconomic Factors and Governance Islamic and Conventional Bank Revenue Efficiencies written by Fakarudin Kamarudin and published by . This book was released on 2015 with total page 682 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Determinants of Bank Liquidity in Indonesia written by I Made Surya Negara Sudirman and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Global monetary crisis has proven that the increase of banking liquidity risk followed by banking illiquidity barrier triggers the wide spreading crisis. The economic interdependency among countries causes the widespread global monetary crisis. Monetary crisis in a country always puts the banks in that country in liquidity difficulties, which eventually ends up in to the banks liquidation as a result of their incapability of overcoming the liquidity difficulties. A bank's illiquidity can cause a contagion effect indicated with bank run against the other banks as the effect of public trust loss toward the banking sector. Basically, the main source of banking liquidity risk is the fragile bank products, which is shown with fund deposit period that is normally far shorter than the fund remittance period in form of credits or others. In a critical condition, the liquidity risk increases as a bank finds it more difficult to convert its assets into a liquid form to respond to its short-term obligations. This difficulty is mainly caused by decrease of the public purchasing power which generally leads to the decrease of the assets market price. The decrease of the assets market price in the crisis period can also be provoked by the banking assets conversion process into liquid ones, so that it causes the increase of asset offer on one side, while there is an asset decrease on the other side. To manage the liquidity risk and overcoming the bank liquidity difficulty, a bank should maintain its assets quality, increase its capital, efficiency and profitability as liquidity sources. As an intermediate institution, the bank liquidity is also determined by external factors, such as, interest rate, inflation, economic growth, and capital market development. This paper henceforth aims to test myriad variables which can determine the bank liquidity in Indonesia during the global monetary crisis period. This study analysis 20 banks which chosen on purposive sampling method by using dynamic panel analysis from Arellano and Bond (1991) and Arellano and Bover (1995), that are Difference GMM and System GMM, respectively. The study shows that there are some significant variables which capital, asset quality, profitability, funding, interest rate, inflation, and capital market development determine the banking liquidity in Indonesia.

Download or read book Macroeconomic Stress Testing for the Indonesian Banking System written by Muliaman D. Hadad and published by . This book was released on 2007-01-01 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Nonperforming Loans in the GCC Banking System and their Macroeconomic Effects written by Mr.Raphael A. Espinoza and published by International Monetary Fund. This book was released on 2010-10-01 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: According to a dynamic panel estimated over 1995 - 2008 on around 80 banks in the GCC region, the NPL ratio worsens as economic growth becomes lower and interest rates and risk aversion increase. Our model implies that the cumulative effect of macroeconomic shocks over a three year horizon is indeed large. Firm-specific factors related to risk-taking and efficiency are also related to future NPLs. The paper finally investigates the feedback effect of increasing NPLs on growth using a VAR model. According to the panel VAR, there could be a strong, albeit short-lived feedback effect from losses in banks’ balance sheets on economic activity, with a semi-elasticity of around 0.4.

Download or read book New Dynamics in Banking and Finance written by Nesrin Özataç and published by Springer Nature. This book was released on 2022-04-27 with total page 209 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume presents current developments in the fields of banking and finance from an international perspective. Featuring contributions from the 5th International Conference on Banking and Finance Perspectives (ICBFP), this volume serves as a valuable forum for discussing current issues and trends in the banking and financial sectors, especially in light of the global economic challenges triggered by financial institutions. Using the latest theoretical models, new perspectives are brought to topics such as the global financial markets, international banking and finance, microfinance, fintech, and corporate finance. Offering an opportunity to explore the challenges of a rapidly changing industry, this volume will be of interest to academics, policy makers, and scholars in the fields of banking, insurance, and finance.

Download or read book Does the Nominal Exchange Rate Regime Matter written by Mr.Atish R. Ghosh and published by International Monetary Fund. This book was released on 1995-11-01 with total page 10 pages. Available in PDF, EPUB and Kindle. Book excerpt: The effect of the exchange rate regime on inflation and growth is examined. The 30-year data set includes over 100 countries and nine regime types. Pegged regimes are associated with lower inflation than intermediate or flexible regimes. This anti-inflationary benefit reflects lower money supply growth (a discipline effect) and higher money demand growth (a credibility effect). Output growth does not vary significantly across regimes: Countries with pegged regimes invest more and are more open to international trade than those with flexible rates, but they experience lower residual productivity growth. Output and employment are more variable under pegged rates than under flexible rates.