Download or read book The Determinants of Bank Performance in Indonesia written by Teck Meng Lee and published by . This book was released on 1997 with total page 113 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Determinants of Commercial Bank Profitability in Indonesia written by Arief Putranto and published by . This book was released on 2014 with total page 10 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper seeks to examine the determinants of bank profitability in Indonesia. The sample used is a panel data of 25 publicly traded Indonesian commercial banks in 2007-2012 period. This research used Return on Assets (ROA) and Return on Equity (ROE) as proxies of profitability and analyze how variables from three categories that is internal, external, and market share variable affects them. We found some intriguing findings from this study, namely, the effect of CAR that we found to be negative towards profitability, which indicated that the capitals of Indonesian banks are beyond their optimal level. Then we found that Loan to Deposit ratio and Market Share of Credit, contrary to common sense, also demonstrated a negative effect, which appears to be caused by the 2008-2010 Global Financial Crisis. Last, we also found that Inflation positively affect profitability, which seemingly caused by a demand-pull type of inflation.

Download or read book Handbook of Islamic Banking written by Kabir Hassan and published by Edward Elgar Publishing. This book was released on 2009-01-01 with total page 472 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Handbook of Islamic Banking comprises 25 studies by leading international experts on Islamic banking and finance specially commissioned to analyse the various debates and the current state of play in the field. From its origins thirty years ago, Islamic banking has expanded rapidly to become a distinctive and fast growing segment of the international banking and capital markets. Despite this expansion, Islamic banking still remains poorly understood in many parts of the Muslim world and continues to be a mystery in much of the West. This comprehensive Handbook provides a succinct analysis of the workings of Islamic banking and finance, accessible to a wide range of readers. At the same time, it seeks to bring the current research agenda and the main issues on Islamic banking before a wider audience. Islamic banking offers, as an alternative to conventional interest-based financing methods, a wide variety of financial instruments and investment vehicles based on profit-and-loss sharing arrangements. These are all explored in detail along with other subjects such as governance and risk management, securities and investment, structured financing, accounting and regulation, economic development and globalization. M. Kabir Hassan, Mervyn Lewis and the other contributors have created an authoritative and original reference work, which will contribute to a wider understanding of Islamic banking as well as provoking further discussion and research. It will be invaluable to all scholars, researchers and policymakers with an interest in this subject.

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 Subsidized Directed Credit Programs Commercial Bank Credit and Bank Restructuring Agency written by Dibyo Prabowo and published by . This book was released on 2019-10-03 with total page 194 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book takes an academic and practitioner's perspective in assessing the role that structured credit both state and non-state in economic performance, challenges providers and beneficiaries often face, and pathways toward improving its effectiveness. The book comprises seven chapters. Chapter One highlights the mode, process, rationale, outcomes and impact of bank restructuring in Indonesia. In short, the article is an evaluation of the performance of now defunct Indonesia bank restructuring agency is made. The contribution of other factors that influence bank activities beyond the control of even the healthiest of banks encompassing macroeconomic instability, political and social insecurity, central-local government wrangling over territorial, investment, infrastructure, and taxation jurisdictions, and in hampering both bank-restructuring efforts and economic recovery, are assessed. Accelerating the pace of economic recovery requires multi-faceted improvements in bank management and a series of measures to foster the existence of a sustainable and conducive macroeconomic environment. Meanwhile, Chapter Two presents investigates the determinants and impact of bank credit on output in the food crops and fisheries sub sectors; whether or not there is a significant difference in the risk on bank credit and output in the two sub sectors, and whether or not there is a relationship between risk obtaining in the two sub sectors.Chapter Three the influence that bank credit has on agricultural output; whether or not there is significant difference in the magnitude of bank credit risk and output risk obtaining in the food crops, estates, fisheries and livestock sub sectors; the main factors that influence bank credit risk and the influence it has on agricultural output risk in Indonesia. Chapter Four investigates the effect bank credit extended to the forestry sub-sector to the sub sector's output, and whether banking deregulation and the economic crisis have any impact on such a relationship. Meanwhile, Chapter Five evaluates the role of targeted credit programs in Indonesia. The part played by agricultural extension service and poverty incidence assessed in light of the credit performance. Chapter Six the impact of the establishment of the Indonesia Deposit Insurance Corporation (IDIC) had some significant impact on banking performance in Indonesia. The article analyzes the impact of the establishment of the Indonesia deposit insurance corporation on bank intermediation in Indonesia. Chapter Seven evaluates the impact of the establishment of the Indonesia Deposit Insurance agency on bank intermediation in The special administrative region, DIY, while an article on Has the establishment of the Indonesia Deposit Insurance Corporation (IDIC) had significant impact on banking performance in Indonesia? Special emphasis on operations of small and medium banks and enterprise, employs the deposit insurance theoretical platform to assesses the impact of the establishment of the Indonesia deposit insurance corporation on bank intermediation in Indonesia.

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 Determinants of Systematic Risk of Banking Sector in Indonesia Stock Exchange written by Paulina Yuritha Amtiran and published by . This book was released on 2017 with total page 7 pages. Available in PDF, EPUB and Kindle. Book excerpt: Objective - Basically the purpose of the company is to add value and maximize the wealth of shareholders. The added value of the company is reflected in the price of shares traded in the capital market. Stock prices higher than the rate of return obtained will be high-risk is also high, the stock price lower than the rate of return and low risk will be obtained. Risk is one factor that should be considered by the company. Systematic risk is the risk that cannot be diversified by the company. Therefore, companies must be able to know the determinants of the systematic risk in the company. The banking sector is one sector that is directly related to systematic risk. Methodology/Technique - Sampling techniques by purposive sampling of the banks listed on the Indonesia Stock Exchange, from as many as 42 banks listed on the Indonesia Stock Exchange in accordance with the criteria as many as 31 banks. Technical analysis of the data conducted by data pool regression analysis. Findings - The analysis of data on the banking sector beta is found that the beta value of the entire bank listed on the Indonesian Stock Exchange is under one it indicates that the banking sector is not unduly influenced by changes in market conditions. Novelty - The research use combine financial ratio variable and macroeconomic variable. Type of Paper: Empirical.

Download or read book Bank Performance written by Jacob Bikker and published by Routledge. This book was released on 2008-10-27 with total page 173 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economic literature pays a great deal of attention to the performance of banks, expressed in terms of competition, concentration, efficiency, productivity and profitability. This book provides an all-embracing framework for the various existing theories in this area and illustrates these theories with practical applications. Evaluating a broad field of research, the book describes a profit maximizing bank and demonstrates how several widely-used models can be fitted into this framework. The authors also present an overview of the current major trends in banking and relate them to the assumptions of each model, thereby shedding light on the relevance, timeliness and shelf life of the various models. The results include a set of recommendations for a future research agenda. Offering a comprehensive analysis of bank performance, this book is useful for all of those undertaking research, or are interested, in areas such as banking, competition, supervision, monetary policy and financial stability.

Download or read book Key Determinants of Bank Profitability in Indonesia Malaysia Singapore Thailand written by Wei Wong and published by . This book was released on 1996 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

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 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 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 Islamic Banking written by Mr.Luca Errico and published by International Monetary Fund. This book was released on 1998-03-01 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the implications of Islamic precepts on banks’ structure and activities, focusing on banking supervision issues. It points out and discusses these issues in the context of a paradigm version of Islamic banking, as well as in frameworks that fall between the paradigm version and conventional banking. The case of Islamic banks operating in a conventional system is also examined.

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 Growth of Islamic Banking in Indonesia written by Yasushi Suzuki and published by Routledge. This book was released on 2020-12-22 with total page 127 pages. Available in PDF, EPUB and Kindle. Book excerpt: Indonesia is the most populous Muslim country in the world. Taking into account also its endowment and potential economic resources, the Islamic banking industry in Indonesia was expected to take on an important role in facilitating more financial resources and to contribute to the internationalization of the Islamic mode of financing particularly in the Asia-Pacific region. However, the reality is far from the expectation. This book aims to clarify the causes and fundamental constraints leading to the extraordinarily low level of Indonesia’s Islamic financial deepening. The authors draw on the traditions of Institutional Economics which are concerned with the rules or mechanisms of creating the 'incentive' and 'threat' for economic players because the rules (institutions) would matter as the determinant for economic development and economic efficiency. This book offers a fairly new analytical lens by hypothesizing that Islamic banks must earn additional profit– the authors coined as ‘Islamic bank rent’ - to maintain their franchise value as prudent Shari’ah-compliant lenders when compared to conventional banks. The authors argued that insufficient provision of the Islamic bank rent opportunity may have caused the Indonesia’s Islamic banks the opportunity to learn and improve their skill and capacity for the credit risk management. The book also offers evidence in support of implementing economic and affirmative policy necessary for incubating and developing the Islamic banking industry in Indonesia and making Indonesia an international Islamic financial hub in the Asia-Pacific region. This book will be a useful resource for policy makers and researchers interested in Islamic banking in Indonesia.

Download or read book Bank Profitability and Financial Stability written by Ms.TengTeng Xu and published by International Monetary Fund. This book was released on 2019-01-11 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze how bank profitability impacts financial stability from both theoretical and empirical perspectives. We first develop a theoretical model of the relationship between bank profitability and financial stability by exploring the role of non-interest income and retail-oriented business models. We then conduct panel regression analysis to examine the empirical determinants of bank risks and profitability, and how the level and the source of bank profitability affect risks for 431 publicly traded banks (U.S., advanced Europe, and GSIBs) from 2004 to 2017. Results reveal that profitability is negatively associated with both a bank’s contribution to systemic risk and its idiosyncratic risk, and an over-reliance on non-interest income, wholesale funding and leverage is associated with higher risks. Low competition is associated with low idiosyncratic risk but a high contribution to systemic risk. Lastly, the problem loans ratio and the cost-to-income ratio are found to be key factors that influence bank profitability. The paper’s findings suggest that policy makers should strive to better understand the source of bank profitability, especially where there is an over-reliance on market-based non-interest income, leverage, and wholesale funding.