scholarly journals The Impact of BASEL Accords on the Management of Vietnamese Commercial Banks

2020 ◽  
Vol 13 (10) ◽  
pp. 228
Author(s):  
Hai Long Pham ◽  
Kevin James Daly
Keyword(s):  
Risk Management ◽  
Commercial Banks ◽  
Value At Risk ◽  
Banking System ◽  
Capital Adequacy ◽  
Bank Risk ◽  
Equation Modeling ◽  
Least Squares Regression ◽  
Basel Accord ◽  
The Impact

This paper is an attempt to empirically examine the impact of Basel Accord regulatory guidelines on the risk-based capital adequacy regulation and bank risk management of Vietnamese commercial banks. Our research aims to assess how Vietnamese commercial banks manage their capital ratio and bank risk under the latest Basel Accord capital adequacy ratio requirements. Building on previous studies, this research uses a simultaneous equation modeling (SiEM) with three-stage least squares regression (3SLS) to analyze the endogenous relationship between risk-based capital adequacy standards and bank risk management. A year dummy variable (dy2013) is included in the model to take account of changes in the regulation of the Vietnamese banking system. Furthermore, we add a value-at-risk variable developed by as an independent variable into equations of the empirical models. The results reveal a significant impact of Basel capital adequacy regulatory pressure on the risk-based capital adequacy standards and bank risk management of Vietnamese commercial banks. Moreover, banks under the latest Basel capital adequacy regulations are induced to reduce risks and increase banks’ financial performance.

Restructuring Measurements Impact on Bank Risk After the Global Financial Crisis — Empirical Evidence from Vietnam

2021 ◽  
pp. 2150019
Author(s):  
Tu T. T. Tran ◽  
Yen Thi Nguyen
Keyword(s):  
Financial Crisis ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
Banking System ◽  
The State ◽  
Bank Risk ◽  
The Government ◽  
The Global Financial Crisis ◽  
Bank System ◽  
The Impact

Project 254 signed in November 2011 which is relating to “Restructuring the system of credit institutions in the period of 2011–2015” has been considered as a milestone in marking the Vietnamese government to prevent the influence of the financial crisis of 2008. This paper identifies hypotheses evaluating the impact of restructuring measurements on the risk of the Vietnamese’s commercial banks in 10 years, starting from 2008. Using the OLS regression method for analysis by running Eviews and ANOVA test in SPSS with a unique database of 216 observations of 31 commercial banks in Vietnam, it was found that: (i) The bail-out activities of the State Bank of Vietnam in 2015 does not influence on bank risk, (ii) The mergers and acquisitions (M&A) do not support the bank to reduce risk, it increases the risk for acquiring banks, (iii) The global crisis 2008 exerts dire consequence on the bank system in Vietnam, (iv) There is the difference of risk among the groups of the bank experiencing a different number of years of operation. Basing on this result, the paper also makes recommendations to the Government, The State Bank of Vietnam and the commercial banks for effective risk management toward the development of the Vietnamese banking system.

scholarly journals Does Credit Risk Management affect the Financial Performance of Commercial Banks in Kosovo?

2018 ◽  
Vol 7 (2) ◽  
pp. 49-57
Author(s):  
Rrustem Asllanaj
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Performance ◽  
Multiple Regression ◽  
Commercial Banks ◽  
Multiple Regression Model ◽  
Capital Adequacy ◽  
Regression Equations ◽  
Credit Risk Management ◽  
The Impact

This study analyses the impact of credit risk management on financial performance of commercial banks in Kosovo, and comparing the relationship between the determinants of credit risk management and financial performance by using CAMEL indicators. Panel data of 85 observations from 2008 to 2012 of ten commercial banks was analysed using multiple regression model. Findings through multiple regression analysis are presented in forms of tables and regression equations. The study also elaborates whether capital adequacy, asset quality, management efficiency, earnings and liquidity have strong or weak relationship with financial performance of commercial banks. The study concludes that CAMEL model can be used as a system of assessment and rating of credit risk management by commercial banks in Kosovo.

scholarly journals The impact of credit risk management on the financial performance of United Arab Emirates commercial banks

2021 ◽  
Vol 10 (3) ◽  
pp. 303-319
Author(s):  
Jamil Salem Al Zaidanin ◽  
Omar Jamil Al Zaidanin
Keyword(s):  
Risk Management ◽  
Financial Performance ◽  
United Arab Emirates ◽  
Commercial Banks ◽  
Positive Impact ◽  
Capital Adequacy ◽  
Credit Risk Management ◽  
Capital Adequacy Ratio ◽  
Income Ratio ◽  
The Impact

The main purpose of this study is to measure up to what extent the independent factors defined by capital adequacy ratio, non-performing loans ratio, cost-income ratio, liquidity ratio, and loans-to-deposits ratio impact the financial performance of sixteen commercial banks operating in the United Arab Emirates using panel data for the period of 2013-2019. The secondary data was collected from banks and examined by applying standard descriptive statistics and the random effect model for hypothesis testing. It is concluded from the regression outcomes that non-performing loans ratio and cost-income ratio have a significant negative impact on commercial banks profitability in the United Arab Emirates, while capital adequacy ratio, liquidity ratio, and loans -to-deposits ratio all have a very weak positive relationship on the return on assets but they are not determinants of bank’s profitability due to the insignificant statistical impact on it. It is therefore suggested that to enhance financial performance and minimize the risk of non-performing loans in the future, banks must watch very carefully the loans’ performance and analyze thoroughly the clients’ credit history and ability to pay back their debts prior to any approval of loan applications. Furthermore, banks should continuously improve their assets utilization, liquidity, and techniques of managing operating costs, improve the impact of capital adequacy, and the use of deposits for lending activities from a weak positive impact to a significant positive impact on their profitability. The researchers recommend that future studies on credit risk management influence on banks’ financial performance should consider more independent variables and longer periods of study such as twenty or thirty years to have more accuracy and generalized results.  

scholarly journals Risk management in a commercial bank

2020 ◽  
pp. 75-82
Author(s):  
S. V. Solonina ◽  
A. A. Labov
Keyword(s):  
Risk Management ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Management System ◽  
Financial Stability ◽  
Management Strategies ◽  
Banking System ◽  
Point Of View ◽  
Capital Adequacy ◽  
Credit Institutions

The study presents the problems of risk management of a commercial Bank as the most important element in the overall banking management system. The relevance of the study is due to the current economic and political situation in the country, as well as the instability of market conditions, which significantly complicated the risk management system in commercial banks, which contributed to the deterioration of their financial condition. The processes taking place in the global financial market in recent years have a significant impact on the banking system, significantly increasing Bank risks and reducing the financial stability of credit institutions. Differences are highlighted that reflect the priority aspects in assessing the risk management of a commercial Bank from the authors ‘ point of view. Risk management strategies in credit institutions are considered. A comparative analysis of the methodologies used to assess the risks and capital adequacy of commercial banks in Russia and abroad has been carried out, and features of their use have been identified.

scholarly journals Bank Transparency and Risk Taking: Empirical Evidence from Tunisia

2016 ◽  
Vol 8 (5) ◽  
pp. 111 ◽  
Author(s):  
Raoudha Dhouibi ◽  
Abir Mabrouk ◽  
Emna Rouetbi
Keyword(s):  
Risk Taking ◽  
Voluntary Disclosure ◽  
Stock Exchange ◽  
Banking System ◽  
Market Discipline ◽  
Capital Adequacy ◽  
Financial Accounting ◽  
Necessary Condition ◽  
Basel Accord ◽  
The Impact

<p>An important unresolved issue in finance is the extent to which bank transparency promotes or undermines banking risk-taking. Financial accounting information is an essential component of transparency and a necessary condition for market discipline. This latter can be conceptualized as a market-based incentive scheme with which investors in banking securities penalize banks for greater risk-taking by asking for higher returns on their investments. However, in developing countries, where financial markets are insufficiently developed, the role of market discipline in limiting banks’ risk-taking may be restricted.</p>This paper examines the impact of transparency, as measured by voluntary disclosure of financial information, on the fragility of Tunisian banks. This study is motivated by the decision of the Central Bank of Tunisia to implement the directives of the second Basel Accord to improve the soundness and the safety of the Tunisian banking system. We examine a sample of ten Tunisian banks listed on the Stock Exchange of Tunis over the period 2000-2011. The results show that transparency has no effect on Tunisian banks’ risk-taking. Similarly, the results indicate that the capital adequacy ratio has no effect on the non-performing loans rate. These results may undermine the effectiveness of the guidelines of the Basel Committee agreements to reduce risk-taking by Tunisian banks.

Prediction of Return on Equity Using Capital Adequacy Ratio in Commercial Banks: An ANOVA Table Analysis

2014 ◽  
Vol 4 (2) ◽  
Author(s):  
Meenakshi Chaturvedi
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
News Media ◽  
Commercial Banks ◽  
Banking Sector ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Credit Risk Management ◽  
Return On Equity ◽  
The Impact

The purpose of this study is to predict the impact of Credit Risk Management on Profitability of Commercial Banks in India. Data is obtained from different news media, publication and sample banks to describe present scenario of banking sector in India. To analyze the profitability and credit risk management of banks after implementing the Basel II standard, we collected secondary data of ten years (2003 to 2013) from the annual report of banks. Few bar-diagrams have been drawn to compare the performance among six banks. While, to fulfill the research objective, ROE, and CAR is calculated to evaluate the Credit Risk of the Banks. Using these two ratios, researcher constructed the regression model statistics.

scholarly journals Credit risk management and profitability: empirical evidence on Ethiopian commercial banks

2020 ◽  
Vol 8 (4) ◽  
pp. 377-386
Author(s):  
Shibiru Tade Kidane
Keyword(s):  
Risk Management ◽  
Gross Domestic Product ◽  
Credit Risk ◽  
Commercial Banks ◽  
Negative Impact ◽  
Capital Adequacy ◽  
Domestic Product ◽  
Credit Risk Management ◽  
Macroeconomic Factors ◽  
The Impact

The aim of the study was to assess the impact of credit risk management on the profitability commercial banks in Ethiopia. Secondary data was gathered from National Bank of Ethiopia for ten year periods (2010-2019). The study adopted Correlation analysis and fixed effect Model. Return on Asset was used to measure profitability of commercial banks, bank specific factors(Capital adequacy, Loan and Advances to total deposit, Non- Performing Loans, Bank size and Liquidity and macroeconomic factors (Inflation and Gross Domestic Product) as indicators of credit risk management. The findings showed that Credit Risk Management in terms of bank specific and macroeconomic factors has significant impact on profitability of commercial banks in Ethiopia. Also the result displayed that profitability of commercial banks is not affected by the amount of non- performing loans during the study. The study recommended that banks’ credit risk management should not give due devotion only to the internal factors  but also to external factors exclusively (Gross Domestic Product and Inflation) in order to minimize their negative impact on profitability of commercial banks in Ethiopia

scholarly journals The Impact of Credit Risk Management on the Commercial Banks Performance in Nigeria

2014 ◽  
Vol 3 (5) ◽  
pp. 295-306
Author(s):  
Idowu Abiola ◽  
Awoyemi Samuel Olausi
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Commercial Banking ◽  
Capital Adequacy ◽  
Credit Risk Management ◽  
Financial Reports ◽  
Return On Equity ◽  
Management Indicators ◽  
The Impact

Credit risk management in banks has become more important not only because of the financial crisis that the industry is experiencing currently, but also a crucial concept which determine banks’ survival, growth and profitability. The aim of this study is to investigate the impact of credit risk management on the performance of commercial banks in Nigeria. Financial reports of seven commercial banking firms were used to analyze for seven years (2005 – 2011). The panel regression model was employed for the estimation of the model. In the model, Return on Equity (ROE) and Return on Asset (ROA) were used as the performance indicators while Non-Performing Loans (NPL) and Capital Adequacy Ratio (CAR) as credit risk management indicators. The findings revealed that credit risk management has a significant impact on the profitability of commercial banks’ in Nigeria.

scholarly journals The Impact of Credit Risk on Bank Profitability in Nigeria

2020 ◽  
Vol 1/2020 (13) ◽  
pp. 5-22
Author(s):  
Onyeiwu Charles ◽  
◽  
Gideon Ajayi ◽  
Obumneke Muoneke B. ◽  
Keyword(s):  
Risk Management ◽  
Regression Analysis ◽  
Credit Risk ◽  
Commercial Banks ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Strong Impact ◽  
Credit Risk Management ◽  
Risk Parameters ◽  
The Impact

This study examines the impact credit risk management has on the profitability of commercial banks in Nigeria. The main objective of this material is to show how credit risk parameters are related to the expected performance of commercial banks in Nigeria. Using the regression analysis, relationship was drawn between credit risk parameters (which include capital adequacy ratio and non-performing loan ratio) and the profitability ratio (return on average asset, in particular) of five big Nigerian banks. Mixed research methodology was adopted in that primary data were sourced via questionnaires and secondary data were used via annual report of selected banks. Regression analysis was used to analyse the data. The conclusion drawn from the data analysis shows that there is a strong relationship between credit risk parameters and returns of the bank implying that credit risk management has a strong impact on the profitability of commercial banks in Nigeria. The study recommends that banks’ capital should be matched with their total risk exposure and if there is an imbalance, new capital requirements are necessary. Insider-related interests in loan applications should be closely monitored by the regulators to ensure continuous performance of the loan facility. Also, there should be an extant profiling of loan defaulters whether individuals or corporate entities.

scholarly journals Profitability and Risk in Relation to Income Diversification of Vietnamese Commercial Banking System

2016 ◽  
Vol 23 (02) ◽  
pp. 61-76
Author(s):  
Vinh Vo Xuan ◽  
Mai Tran Thi Phuong
Keyword(s):  
Panel Data ◽  
Empirical Evidence ◽  
Commercial Banks ◽  
Lower Risk ◽  
Banking System ◽  
Commercial Banking ◽  
Bank Risk ◽  
Income Diversification ◽  
Data Set ◽  
The Impact

Employing a panel data set including 37 joint-stock commercial banks covering the period from 2006 to 2013, this paper investigates the impact of income diversification on bank risk and returns. Our results show that increased income diversification results in higher rates of bank returns. However, when risk is considered, the increased income diversification leads to lower risk-adjusted returns. Empirical evidence also shows that the income diversification is not beneficial to joint-stock commercial banks in Vietnam.

Sign in / Sign up

Export Citation Format

Share Document