Capital and asset quality implications for bank resilience and performance in the light of NPLs’ regulation: a focus on the Texas ratio

Velliscig, Giulio; Floreani, Josanco; Polato, Maurizio

doi:10.1057/s41261-021-00184-y

Cited by 17 publications

(16 citation statements)

References 77 publications

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“…The study, therefore, rejected the null hypothesis that asset quality has no significant effect on the financial performance of commercial banks in Kenya. The findings are in line with Giulio Velliscig, Josanco Floreani andMaurizio Polato (2021), Nzoka (2015) and Wambugu (2018) which established a negative and significant relationship between asset quality and financial performance of commercial banks in Kenya.…”

Section: Discussionsupporting

confidence: 83%

Asset Quality and Financial Performance of Tier Iv Commercial Banks in Kenya

Roselyne

Mackton

Kiganda

2022

EJEFR

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The main objective of the study was to assess the influence of asset quality on the financial performance of tier IV commercial banks in Kenya. The study was guided by the scientific theory of management, Transaction Cost theory and Contingency theory. This study employed a longitudinal research design. The target population was 13 tier IV commercial banks in Kenya as at 2022 from the Central Bank of Kenya’s website. Panel data was analyzed using STATA. Pearson’s product-moment correlation coefficient depicted r = -0.4306, a p-value of 0.0000 which is significant for asset quality. The regression coefficient was -0.14, a p-value of 0.013, for asset quality (AQ) and financial performance (ROE) at a 5% level of significance. These results indicate that Asset Quality had a significant influence on financial performance. It was recommended that commercial banks should use their assets efficiently and effectively to yield optimum results.JEL: G21; G29; G38 Article visualizations:<img src="/-counters-/edu_01/0567/a.php" alt="Hit counter" />

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Section: Discussionsupporting

confidence: 83%

Asset Quality and Financial Performance of Tier Iv Commercial Banks in Kenya

Roselyne

Mackton

Kiganda

2022

EJEFR

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“…Gurbuz and Aybars (2010) stated similar results in their study conducted among Turkish firms. Researchers also highlighted a positive association of fixed assets with a firm's performance (Liu et al, 2021;Velliscig et al, 2022). The high involvement of bureaucrats or the unnecessary government regulation that hinders business practices were found to be negatively associated with firm performance (Okafor & Calderon, 2022).…”

Section: Factors Impacting Firms' Financial Performancementioning

confidence: 99%

Terrorism as Socio-Economic and Cultural Barriers to Indonesian Firms’ Financial Performance

Golose¹

2023

J Ethn Cult Stud

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Terrorism causes ethical and cultural issues and adversely impacts a nation's socio-economic development. Considering the escalating focus on the economic contribution toward Indonesia’s stability, growth, and industrial transformation, the current study aims to examine the impact of terrorism on the financial performance of firms listed on the Indonesian stock exchange. The statistics regarding terrorist attacks, fatalities, and injuries during such attacks from 2011 to 2020 in Indonesia were gathered from the Global Terrorism Database, and the data regarding firms’ internal characteristics and the external environment was gathered from the credit agency in Indonesia, PT Pemeringkat Efek Indonesia, mostly known as PEFINDO. At the same time, the central Bank Indonesia was approached for the financial statements of the firms listed on the Indonesian Stock Exchange. Applying the Cobb–Douglas production function and Pooled Ordinary Least Squares, the results revealed a significant and negative influence of terrorism on firms’ performance. The influence of firms’ internal characteristics and external environment were considered control variables. As a valuable addition to the existing literature, the current study provides unique evidence of the effects of previous years’ terrorism and within-country variations of terrorism on firm financial performance.

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“…Further research on factors influencing the liquidity of commercials banks in the country could add value to the profitability of banks and academic literature. Velliscig G and al(2021),Based on a sample of 63 listed European banks, this paper investigates the relationship of capital and asset quality, in terms of provisioning and coverage policies, with bank risk and performance during the period 2005Q1-2018Q4. Our results point out diferent relationships between risk-based and non-risk-based measures of capital with bank risk and performance profles.…”

Section: Empirical Reviewmentioning

confidence: 99%

Asset Quality and the Financial Performance of Commercial Banks in DRC

Dunia¹

2022

BJMAS

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This study aimed at assessing the impact of asset quality management on the financial performance of commercial banks in DR Congo from 2010 to 2020. This study had one specific objective which was to assess the relationship between the NPL and the performance of commercial banks in DR Congo. After analysis made by SPSS; After analysis the table n°3 shows that the asset quality as assessed by the NPLR has a negative impact on financial profitability because the return on assets decreases by 0.190 monetary units for every unit rise in nonperforming loans (Y=-0,190x1+1,351 ). In actuality, a non-performing loan is a loss, and the higher it is, the less profitable it is. Since the sig value is 0.00, or less than 5%, the negative link between the two variables is statistically significant. Moreover, the NPLR had a negative impact on financial profitability (ROE), as the return on assets decreases by 1.717 units of money for every unit of money that the nonperforming loan increases (Y= -1,717x1+13,157) . In actuality, a non-performing loan is a loss, and the higher it is, the less profitable it is. Since the sig value is 0.00, or less than 5%, the negative link between the NPL and ROE is statistically significant.

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Capital and asset quality implications for bank resilience and performance in the light of NPLs’ regulation: a focus on the Texas ratio

Cited by 17 publications

References 77 publications

Asset Quality and Financial Performance of Tier Iv Commercial Banks in Kenya

Asset Quality and Financial Performance of Tier Iv Commercial Banks in Kenya

Terrorism as Socio-Economic and Cultural Barriers to Indonesian Firms’ Financial Performance

Asset Quality and the Financial Performance of Commercial Banks in DRC

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