• Title/Summary/Keyword: Bank Size

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Board Governance and Bank's Performance: Does Size Matter?

  • ALAM, Atia;ABBAS, Syeda Fizza;HAFEEZ, Ameena
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.11
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    • pp.817-825
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    • 2020
  • Over the last few decades, corporate frauds have highlighted the significance of corporate governance in deriving firm performance. By using different sample data, extensive research has examined how corporate governance structure influences firm's profitability, but limited research was undertaken on the banking sector of Pakistan. This research adds to the literature by testing how board structure derives bank's performance by using sample data of 19 banks for the period from 2010 to 2017. In addition, the study analyzes the controlling part of size on the link between board governance and bank performance. Findings reveal that banks having small board size, fewer non-executive directors and minimum activity level perform better. Analysis related to bank size illustrates that board size has value in increasing benefits in large size banks in contrast to small size one, while higher participation by board members enhances performance of small size banks more. The correlation results and findings showed that there existed no multicollinearity issue between independent variables. Board size showed positive correlation with the market variable, while board activity tended to correlated negatively with the market performance. Inverse correlation between board size and independent directors indicated that Pakistani banks with greater board size had fewer independent directors.

Islamic Bank Efficiency in Indonesia: Stochastic Frontier Analysis

  • OCTRINA, Fajra;MARIAM, Alia Gantina Siti
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.1
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    • pp.751-758
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    • 2021
  • This research is conducted to measure the efficiency level of Islamic banking in Indonesia and also to analyze the factors that can affect its efficiency level. This research used a purposive sampling technique to determine the sample size that will be used, with criteria that the bank has been operating since 2010 and consistently published its financial reports during the research period from 2011 until 2019; therefore, the total sample obtained was 11 samples. Analysis for efficiency level is done by using linear programming Stochastic Frontier Analysis (SFA), with test tool in the form of Frontier 4.1 and Eviews9 to find out what factors that affect efficiency. Efficiency test is done by involving input and output, while influence test used bank-specific variables comprising bank size, bank financial ratio, and macro-economy variable. Research result shows that there are only two banks that are almost close to being fully efficient firms, but the result still does not indicate that Islamic bank works efficiently. Results of the influence test show that factors affecting Islamic banking efficiency in Indonesia are bank size, Capital Adequacy Ratio (CAR), Non-Performing Finance (NPF), and Financing to Deposit Ratio (FDR), while other factors are not influential over the study period.

Factors Affecting Liquidity Risks of Joint Stock Commercial Banks in Vietnam

  • NGUYEN, Hoang Chung
    • The Journal of Asian Finance, Economics and Business
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    • v.9 no.4
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    • pp.197-212
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    • 2022
  • The study uses the audited financial statements of 26 Vietnamese commercial banks listed on the Ho Chi Minh City Stock Exchange (HOSE) and Hanoi Stock Exchange (HOSE) during the 2008-2018 period to estimate the system GMM model, which provides empirical evidence on the effect of the variables of customer deposit to total assets (DEPO) ratio, loan to assets (LTA) ratio, liquidity of commercial banks (LIQ), credit development (CRD) ratio, external funding (EFD) ratio, and credit loss provision (LLP) ratio on liquidity risk. The study confirms that commercial banks' internal factors play the most important role, and there is no empirical evidence on macro variables that affect liquidity risk. Finally, in accordance with the theoretical framework, the study uses an estimation method with the R language and the bootstrap methodology to give empirical proof of the nonlinear correlation and U-shaped graph between commercial bank size and liquidity risk. The importance of commercial bank size in absorbing and moderating the effects of liquidity shocks is demonstrated, however, excessive growth in commercial bank size would increase liquidity risk in commercial bank operations.

The Influence of Board Ownership on Bank Performance: Evidence from Saudi Arabia

  • HABTOOR, Omer Saeed
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.3
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    • pp.1101-1111
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    • 2021
  • The current study aims to investigate the influence of different categories of ownership held by different types of board members on bank performance. The study uses a sample of Saudi listed banks for the period from 2011 to 2018. The results of the panel data analysis using firm fixed-effects regression model indicate that bank performance is significantly and positively affected by the chairman ownership and the CEO ownership. However, board independent members' ownership has a negative influence on bank performance. While non-executive board members' ownership and family board members have an insignificant impact on bank performance. Control variables, including board size, non-executive board members, government ownership, leverage, and bank size are significantly associated with bank performance. Overall, the results indicate that Saudi bank performance is higher in smaller banks that have smaller boards with lower non-executive members, lower portion of shares held by independent board members, higher portion of shares held by the chairman, CEO, and government, and higher leverage. The results of this study provide important implications for regulatory authorities and market participants in Saudi Arabia and countries with ownership concentration to understand the actual role of different categories of board ownership on firm performance in addition to optimize board ownership.

The Relationship Between Non-Interest Revenue and Sustainable Growth Rate: A Case Study of Commercial Banks in Jordan

  • AL-SLEHAT, Zaher Abdel Fattah;ALTAMEEMI, Arshed Fouad
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.5
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    • pp.99-108
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    • 2021
  • As expansion of interest income business faces several limitations, non-interest revenue can play a vital role in increasing the net profit margin and the productivity of the assets to sustain the growth rate. This study aims to analyze the Effect level (partial or total) of a bank's size on the relationship between non-interest revenue and the sustainable growth rate of Jordanian commercial banks. Baron and Kenny's methodology (1986) was adopted to test and analyze the effect of non-interest revenue: including the bank's size, on the sustainable growth rate during the period from 2008-2019. Data collection was done for thirteen commercial banks which constituted 100% of the study population. Testing four hypotheses by using Amos program and a regression model to diagnose the partial and total effect of size. Findings indicate that there is a nonlinear relationship between Non-IR and SGR due to the total effect of bank size on the sustainable growth rate. The results of this study is expected to enable the banks to diversify their revenue to support financial performance towards healthy growth without facing additional financial problems. This study adopted a different methodology from the prior efforts, by using the mediation effect role to verify the effect of non-interest revenue.

Impact of Board Characteristics on Bank Risk: The Case of Vietnam

  • TRAN, Tu T.T.;DO, Nhung H.;NGUYEN, Yen T.
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.9
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    • pp.377-388
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    • 2020
  • The research identifies hypotheses evaluating the impact of board characteristics on the risk of the commercial bank as well as examining the determinants of bank risk in Vietnam over a 10-year period, starting from 2008. Also, in this research, the differences between the roles of women and men in decision-making are tested. Based on this decision, risks of the banks may arise. Ordinary least squares(OLS) regression, Random effect method, and Fixed effect method are used to estimate the factors that have an impact on bank risk for dataset of all commercial banks in Vietnam. The results found that equity-to-asset ratio, bank performance and the economic growth have an inverse relationship with bank risk, while the size of bank has a positive relationship with the bank risk. One of the highlights of this paper is a demonstration of the relationship between CEO's gender and bank risk. The test result shows that the bank led by a female faces a higher overall risk level and credit risk than a bank led by a male. Based on this result, the paper also makes recommendations to Government, the State Bank of Vietnam and the commercial banks for effective risk management.

Non-Bank Lending to Firms: Evidence from Korean Firm-Level Data

  • Lee, Mihye
    • The Journal of Industrial Distribution & Business
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    • v.9 no.9
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    • pp.15-23
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    • 2018
  • Purpose - The purpose of this paper is to examine the determinants of non-bank depository institutions (non-bank financial corporations) lending to firms. The paper aims to contribute to the existing literature by providing empirical evidence from firm-level data and unveiling factors related to access to non-bank financial corporations by firms. Research design, data, and methodology - We used the data on borrowing by firms from CRETOP from years 2008 to 2011. Using the manufacturing industry, we examined what firm-level characteristics explained the increase in borrowing from non-bank financial corporations rather than the banks. Results - Analyzing the firm-level data from 2008 to 2011, we found that firms were more likely to borrow from non-bank financial insti­tutions as the size of the firm increases, implying that large firms have more access to non-bank financing than small and medium-sized firms. In addition, it also showed that small and medium-sized firms moved to non-bank financial corporations for loans. Conclusion - Non-bank depository institutions are not a sub­stitute for bank lending to firms. More specifically, they replace bank lending to firms mostly for large firms rather than small and medium-sized firms. Also, collateral and other firm-level characteristics do not matter in accounting for non-bank lending to firms.

A Study on the Hydraulic Characteristics for River Bank Protection using Gabion Mattress (호안용 돌망태 매트리스의 수리학적 특성 연구)

  • 배상수;이경욱;허창환;지홍기
    • Magazine of the Korean Society of Agricultural Engineers
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    • v.44 no.2
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    • pp.81-98
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    • 2002
  • The condition of initial movement far the river bank protection using rip rap is a limit condition beyond which the lining is progressively destroyed as the separate elements are removed by the flow. In the case of the river bank protection using gabion mattress, however, after the initial movement the containment offered by the mesh remains. A new situation of equilibrium with a deformed river bank protection using gabion mattress is obtained, allowing it to withstand more severe conditions without compromising the resistance and without further deformation. Shield's coefficient for the river bank protection using gabion mattress is twice the value of that fur river bank protection using rip rap. This means that with the same hydraulic behavior conditions, the average dimension of the rocks to be used in the river bank protection using gabion mattress is half that of river bank protection using rip rap rock. When the same size rocks are used the allowable velocity for the river bank protection using gabion mattress is more than twice, even as much as 3 or 4 times that for river bank protection using rip rap.

Growth of Loan Distribution and Bank Valuation: Evidence from Vietnam

  • HOANG, Lam Xuan;HOANG, Phi Dinh;DANG, Duong Quy
    • Journal of Distribution Science
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    • v.18 no.5
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    • pp.5-13
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    • 2020
  • Purpose: The aim of this article is to test the link between growth of loan distribution and Bank Valuation in Vietnam's banking sector. At the same time, the study also compared the differences in the effect of growth of loan to valuation bank in banks of different sizes, ownership rates and bank values. Research design, data and methodology: With panel data estimation techniques along with robust standard error for a sample of the banks listed on Vietnam stock exchange from 2012 to 2019. Results: Growth of loan has a positive impact on Bank Valuation (by Tobin's Q). A closer investigation provides evidence for the differential valuation effect of loan growth depending on different features of banks. Specifically, loan growth is found positively and significantly associated with Bank Valuation in small and non-state-owned banks only. Besides, bank size, deposit, and return on equity are found negatively associated with Tobin's Q, while loan loss provisions exhibit a positive relation with this measure of Bank Valuation. Conclusions: These findings provide contributions to the literature on the existence of the effect of loan growth on Bank Valuation. At the same time, the study also provides practical implications for policy makers in banks and investors.

Potential of River Bottom and Bank Erosion for River Restoration after Dam Slit in the Mountain Stream

  • Kang, Ji-Hyun;So, Kazama
    • Proceedings of the Korea Water Resources Association Conference
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    • 2011.05a
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    • pp.46-46
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    • 2011
  • Severe sediment erosion during floods occur disaster and economic losses, but general sediment erosion is basic mechanism to move sediment from upstream to downstream river. In addition, it is important process to change river form. Check dam, which is constructed in mountain stream, play a vital role such as control of sudden debris flow, but it has negative aspects to river ecosystem. Now a day, check dam of open type is an alternative plan to recover river biological diversity and ecosystem through sediment transport while maintaining the function of disaster control. The purpose of this paper is to verify sediment erosion progress of river bottom and bank as first step for river restoration after dam slit by cross-sectional shear stress and critical shear stress. Study area is upstream reach of slit check dam in mountain stream, named Wasada, in Japan. The check dam was slit with two passages in August, 2010. The transects were surveyed for four upstream cross-sections, 7.4 m, 34 m, 86 m, and 150 m distance from dam in October 2010. Sediment size was surveyed at river bottom and bank. Sediment of cobble size was found at the wetted bottom, and small size particles of sand to medium gravel composed river bank. Discharge was $2.5\;m^3/s$ and bottom slope was 0.027 m/m. Excess shear stress (${\tau}_{ex}$) was calculated for hydraulic erosion by subtracting the values of critical shear stress (${\tau}_{c}$) from the value of shear stress (${\tau}$) at river bottom and bank (${\tau}_{ex}=\tau-{\tau}_c$). Shear stress of river bottom (${\tau}_{bottom}$) was calculated using the cross-sectional shear stress, and bank shear stress (${\tau}_{bank}$) was calculated from the method of Flintham and Carling (1988). $${\tau}_{bank}={\tau}^*SF_{bank}((B+P_{bed})/(2^*P_{bank}))$$ where $SF_{bank}=1.77(P_{bed}/p_{bank}+1.5)^{-1.4}$, B is the water surface width, $P_{bed}$ and $P_{bank}$ are wetted parameter of the bed and bank. Estimated values for ${\tau}_{bottom}$ for a flow of $2.5\;m^3/s$ were lower as 25.0 (7.5 m cross-section), 25.7 (34 m), 21.3 (86 m) and 19.8 (150 m), in N/$m^2$, than critical shear stress (${\tau}_c=62.1\;N/m^2$) with cobble of 64 mm. The values were insufficient to erode cobble sediment. In contrast, even if the values of ${\tau}_{bank}$ were lower than the values for ${\tau}_{bottom}$ as 18.7 (7.5 m), 19.3 (34 m), 16.1 (86 m) and 14.7 (150 m), in N/$m^2$, excess shear stresses were calculated at the three cross-sections of 7.5 m, 34 m, and 86 m distances compare with ${\tau}_c$ is 15.5 N/$m^2$ of 16mm gravel. Bank shear stresses were sufficient for erosion of the medium gravel to sand. Therefore there is potential to erode lateral bank than downward erosion in a flow of $2.5\;m^3/s$. Undercutting of the wetted bank can causes bank scour or collapse, therefore this channel has potential to become wider at the same time. This research is about a potential of sediment erosion, and the result could not verify with real data. Therefore it need next step for verification. In addition an erosion mechanism for river restoration is not simple because discharge distribution is variable by snow-melting or rainy season, and a function for disaster control will recover by big precipitation event. Therefore it needs to consider the relationship between continuous discharge change and sediment erosion.

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