Download or read book Determinants of Profitability of Listed Commercial Banks in India written by Rajveer Rawlin and published by GRIN Verlag. This book was released on 2019-12-09 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: Doctoral Thesis / Dissertation from the year 2019 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1, Bharathiar University, language: English, abstract: This study seeks to understand the impact of a series of key internal determinants of the profitability of listed commercial banks in India. Following are the research questions raised in this regard: Are there differences in key performance measures of private and public sector banks? Does the size of the bank affect bank profitability? Does the bank’s lending activity and income generation capability affect its profitability? Does the productivity of the bank impact its profitability? Does the bank’s asset quality and capital adequacy affect its profitability? Can bank profitability be forecasted from determinants? The banking industry in India is diverse in nature. There are more than sixty listed commercial banks in India. These include banks in the public and private sector and the banks are of varying size and profitability levels. As noted early, the Indian banking system is faced with severe asset quality issues. The banking system has been flooded with non-performing assets which have significantly eroded the bank margins. Recent adverse developments in the banking sector such as lending scams and questionable advances to troubled segments of the economy have dominated the financial press. While this being so, this research is aimed at examining the contributing factors of profitability in banks. Key measures of bank profitability include the return of assets, return on equity and net interest margin. There are several possible drivers of bank profitability. These include asset quality, capital adequacy, liquidity, productivity and income. While several studies till date have looked at key determinants of bank profitability, very few studies have compared the effect of key determinants for a larger cross section of banks that represent the banking sector in India as a whole. Hence an attempt has been made in this study to know the key drivers of profitability of the banking sector. The study also looks at the similarities or the differences of the influence of selected determinants on profitability measures across the sample of banks selected for research. This study also compares the key drivers of bank profitability for public and private sector banks and an attempt is made to develop models to forecast bank profitability from key determinants.

Download or read book The Determinants of Commercial Banks Profitability in India written by Nagaraju Thota and published by . This book was released on 2015 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using an unbalanced bank level panel data, this study tries to examine how bank-specific characteristics and macroeconomic factors affect the profitability of commercial banks (108 commercial banks) in India in the post reform period from 1999 to 2011. The results indicate that profitability of commercial banks in India, regardless of their ownership, is affected by both internal and external characteristics and changes in the overall banking environment. However, the study finds that the impact is not uniform across bank types. The results indicate that banks' liquidity conditions and size do not impact neither return on equity (ROE) or return on asset (ROA) of the profitability measure. On the other hand, it is found that profitability of private and foreign banks is positively related to their credit risk. The results indicate that overhead cost affects ROE of private and foreign banks positively while public sector banks negatively. Whereas the impact of overheads cost on ROA is positively significant in the case of all banks and negatively significant in the case of private banks. There exists a negative relationship between the level of capital strength and ROE and a positive relationship between the level capital strength and ROA in the case of all banks and public banks, which indicates that the more is the capital strength, the more is the profitability of these banks. The impact of Macroeconomic factors on ROE is insignificant for all cases with conflicting signs across ownership types of the banks. On the other hand on ROA, these indicators are significant when we pool the whole sample together (i.e. all banks) and private banks as a group.

Download or read book Determinants of Commercial Bank Interest Margins and Profitability written by Asl? Demirgüç-Kunt and published by World Bank Publications. This book was released on 1998 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: March 1998 Differences in interest margins reflect differences in bank characteristics, macroeconomic conditions, existing financial structure and taxation, regulation, and other institutional factors. Using bank data for 80 countries for 1988-95, Demirgüç-Kunt and Huizinga show that differences in interest margins and bank profitability reflect various determinants: * Bank characteristics. * Macroeconomic conditions. * Explicit and implicit bank taxes. * Regulation of deposit insurance. * General financial structure. * Several underlying legal and institutional indicators. Controlling for differences in bank activity, leverage, and the macroeconomic environment, they find (among other things) that: * Banks in countries with a more competitive banking sector-where banking assets constitute a larger share of GDP-have smaller margins and are less profitable. The bank concentration ratio also affects bank profitability; larger banks tend to have higher margins. * Well-capitalized banks have higher net interest margins and are more profitable. This is consistent with the fact that banks with higher capital ratios have a lower cost of funding because of lower prospective bankruptcy costs. * Differences in a bank's activity mix affect spread and profitability. Banks with relatively high noninterest-earning assets are less profitable. Also, banks that rely largely on deposits for their funding are less profitable, as deposits require more branching and other expenses. Similarly, variations in overhead and other operating costs are reflected in variations in bank interest margins, as banks pass their operating costs (including the corporate tax burden) on to their depositors and lenders. * In developing countries foreign banks have greater margins and profits than domestic banks. In industrial countries, the opposite is true. * Macroeconomic factors also explain variation in interest margins. Inflation is associated with higher realized interest margins and greater profitability. Inflation brings higher costs-more transactions and generally more extensive branch networks-and also more income from bank float. Bank income increases more with inflation than bank costs do. * There is evidence that the corporate tax burden is fully passed on to bank customers in poor and rich countries alike. * Legal and institutional differences matter. Indicators of better contract enforcement, efficiency in the legal system, and lack of corruption are associated with lower realized interest margins and lower profitability. This paper-a product of the Development Research Group-is part of a larger effort in the group to study bank efficiency.

Download or read book The Performance of Indian Banks During Financial Liberalization written by Ms.Petya Koeva Brooks and published by International Monetary Fund. This book was released on 2003-07-01 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides new empirical evidence on the impact of financial liberalization on the performance of Indian commercial banks. The analysis focuses on examining the behavior and determinants of bank intermediation costs and profitability during the liberalization period. The empirical results suggest that ownership type has a significant effect on some performance indicators and that the observed increase in competition during financial liberalization has been associated with lower intermediation costs and profitability of the Indian banks.

Download or read book Determinants of Indian Commercial Bank Profitability and Net Interest Margin from 1992 to 2007 written by Darshan Jayprakash Shah and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Econometric Analysis of Panel Data written by Badi Baltagi and published by John Wiley & Sons. This book was released on 2008-06-30 with total page 239 pages. Available in PDF, EPUB and Kindle. Book excerpt: Written by one of the world's leading researchers and writers in the field, Econometric Analysis of Panel Data has become established as the leading textbook for postgraduate courses in panel data. This new edition reflects the rapid developments in the field covering the vast research that has been conducted on panel data since its initial publication. Featuring the most recent empirical examples from panel data literature, data sets are also provided as well as the programs to implement the estimation and testing procedures described in the book. These programs will be made available via an accompanying website which will also contain solutions to end of chapter exercises that will appear in the book. The text has been fully updated with new material on dynamic panel data models and recent results on non-linear panel models and in particular work on limited dependent variables panel data models.

Download or read book Indian Banking Cost and Profitability written by Suresh Chand Garg and published by . This book was released on 1989 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: In This Book, An Attempt Has Been Made To Examine A Few Aspects Of The Cost And Profitability Of Commercial Banks In India. The Major Objectives Of This Study Are: To Ascertain The Nature Of And Reason For The Trend Of Rising Cost And Declining Profits, To Bring Out The Impact Of Monetary Policy On The Earnings Of Components Banks And To Analyse The Components Of Costs, Incomes And Profits With A View To Suggesting A Basis For Cost Reduction And Pricing Policy.The Book Is Likely To Fill A Long Standing Gap In The Literature On The Subject And Is Specifically Meant For Bankers, Policy Makers, Researchers And Post-Graduate Students.

Download or read book The Determinants of Banks Liquidity Buffers in Central America written by Ms.Corinne Delechat and published by International Monetary Fund. This book was released on 2012-12-21 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: Banks’ liquidity holdings are comfortably above legal or prudential requirements in most Central American countries. While good for financial stability, high systemic liquidity may nonetheless hinder monetary policy transmission and financial markets development. Using a panel of about 100 commercial banks from the region, we find that the demand for precautionary liquidity buffers is associated with measures of bank size, profitability, capitalization, and financial development. Deposit dollarization is also associated with higher liquidity, reinforcing the monetary policy and market development challenges in highly dollarized economies. Improvements in supervision and measures to promote dedollarization, including developing local currency capital markets, would help enhance financial systems’ efficiency and promote intermediation in the region.

Download or read book Do Determinants of Bank Profitability Change Over Time Evidence from India written by Rajveer Rawlin and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Banking stocks have been surging off late. However asset quality issues that have plagued the banking sector over the past five years remain in the back ground. This paper seeks to study the influence of key internal determinants on the profitability of listed banks in India and to see if these determinants change or remain the same over time. The profitability measures chosen were the Return on Assets (ROA) and the Return on Equity (ROE). The internal determinants chosen for the study comprised of key bank metrics such as the deposit/credit ratio and bank size, income measures that include interest income/average working funds and non interest income/average working funds, a measure of fee based income, a key productivity measure in business per employee and risk factors that include the capital adequacy ratio and % Net NPA. The influence exerted by the determinants on ROA and ROE was different across years and varied for both ROA and ROE. The risk factors and income measures studied proved to be key determinants of ROA and ROE. Key stake holders of banks should keep these determinants in mind as they seek to evaluate and understand the rapidly growing Indian banking landscape.

Download or read book Islamic Finance Alternatives for Emerging Economies written by M. Ustaoglu and published by Springer. This book was released on 2014-08-26 with total page 164 pages. Available in PDF, EPUB and Kindle. Book excerpt: Turkey could be considered the most important and leading Islamic country that has implemented the Western economic model successfully mostly because of the modernization efforts since late Ottoman period. As a result of the secularization efforts in the field of economy in early republican era, Muslim people in the country had to deal with non-Islamic practices that contradict with their religious beliefs. Islamic Finance Alternatives for Emerging Economies analyzes the emergence of the Islamic financial institutions in Turkey, by taking into account their history, their operational model, and their legal regulations in the financial field, to discuss the future of Islamic finance. The contributors also consider the ability of Islamic financial institutions and tools to respond to the financial needs of Muslims.

Download or read book Deregulation and Efficiency of Indian Banks written by Sunil Kumar and published by Springer Science & Business Media. This book was released on 2013-10-23 with total page 340 pages. Available in PDF, EPUB and Kindle. Book excerpt: ​ The goal of this book is to assess the efficacy of India’s financial deregulation programme by analyzing the developments in cost efficiency and total factor productivity growth across different ownership types and size classes in the banking sector over the post-deregulation years. The work also gauges the impact of inclusion or exclusion of a proxy for non-traditional activities on the cost efficiency estimates for Indian banks, and ranking of distinct ownership groups. It also investigates the hitherto neglected aspect of the nature of returns-to-scale in the Indian banking industry. In addition, the work explores the key bank-specific factors that explain the inter-bank variations in efficiency and productivity growth. Overall, the empirical results of this work allow us to ascertain whether the gradualist approach to reforming the banking system in a developing economy like India has yielded the most significant policy goal of achieving efficiency and productivity gains. The authors believe that the findings of this book could give useful policy directions and suggestions to other developing economies that have embarked on a deregulation path or are contemplating doing so.

Download or read book Commercial Banks in India written by Benson Kunjukunju and published by . This book was released on 2008-01-01 with total page 342 pages. Available in PDF, EPUB and Kindle. Book excerpt: Banking sector in India has undergone remarkable changes since the nationalisation of 14 major commercial banks in 1969. The geographical and functional coverage of banks has surged at a rate that is unprecedented in the world. Nationalisation of commercial banks in 1969 and 1980 was a mixed blessing. Reforms have brought about considerable improvements as reflected in various parameters relating to capital adequacy, asset quality, profitability and operational efficiency. Unfortunately, commercial banks continue to face the problem of non-performing assets (NPAs). The present volume deals with various aspects related to the development of commercial banks in India, with particular focus on post-liberalisation (1991 onwards) developments.

Download or read book Introduction to Econometrics written by Christopher Dougherty and published by Oxford University Press, USA. This book was released on 2011-03-03 with total page 593 pages. Available in PDF, EPUB and Kindle. Book excerpt: Taking a modern approach to the subject, this text provides students with a solid grounding in econometrics, using non-technical language wherever possible.

Download or read book Commercial Banking in the Planned Economy of India written by Chitta Ranjan Basu and published by Mittal Publications. This book was released on 1991 with total page 444 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Financial Structure and Bank Profitability written by Asl? Demirgüç-Kunt and published by World Bank Publications. This book was released on 2000 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: Countries differ in the extent to which their financial systems are bank-based or market-based. The financial systems of Germany and Japan, for example, are considered bank-based because banks play a leading role in mobilizing savings, allocating capital, overseeing investment decisions of corporate managers, and providing risk management vehicles. The systems of the United States, and the United Kingdom are considered more market-based. Using bank-level data for a large number of industrial and developing countries, the authors present evidence about the impact of financial development, and structure on bank performance. They measure the relative importance of bank or market finance by the relative size of stock aggregates, by relative trading or transaction volumes, and by indicators of relative efficiency. They show that in developing countries, both banks and stock markets are less developed, but financial systems tend to be more bank-based. The richer the country, the more active are all financial intermediaries. The greater the development of a country's banks, the tougher is the competition, the greater is the efficiency, and the lower are the bank margins, and profits. The more under-developed the stock market, the greater are the bank profits. But financial structure per se does not have a significant, independent influence on bank margins, and profits.

Download or read book Determinants of Public Sector Bank s Profitability in India written by Gurmeet Singh and published by . This book was released on 2016 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt: The economic development of country depends on the effective banking system. In recent years, there have been considerable pressures on the profitability of banks. The study investigates the long run equilibrium relationship between the return on assets (ROA) and nine variables over the period 2005 to 2014. Johansen's co-integration test and vector error correction model have been applied to explore the long-run equilibrium relationship. The analysis reveals that the returns on assets of the Indian public sector banks are positively co-integrated with all the nine variables under the study and hence, a long-run equilibrium relationship exists between them. The results of VECM revels that secured advances to total advances, burden to total assets, burden to interest income, operating profits to total assets, non-interest income to total assets and profit per employee causes return on asset in long run and short run. While, non performing assets, deposits to total liabilities and net interest margins causes return on assets in short run only. The findings from Granger causality based on the VECM indicate bidirectional causality exists between all the variables tested and return on assets except non-performing assets. Non-performing assets granger causes return on assets but not the other way round.

Download or read book The Determinants of Commercial Banking Profitability in Low Middle and High Income Countries written by Andreas Dietrich and published by . This book was released on 2014 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a broad bank-level dataset and the GMM estimator technique described by Arellano and Bover (1995), this paper analyzes how bank-specific characteristics, macroeconomic variables, and industry-specific factors affect the profitability of 10,165 commercial banks across 118 countries over the period from 1998 to 2012. Grouping the countries according to three income levels, we show that the determinants of bank profitability included in our model can explain existing profitability differences among commercial banks in low-, middle-, and high-income countries. The profitability determinants vary quite widely across the different levels of income in terms of significance, sign and size of the effect. The level of income has thus an important impact on the determinants of bank profitability.