The Determinant of Financial Performance of Indian Public Sector Banks- A Panel Data Approach

Jeet, Vikram; Aspal, Parvesh Kumar

doi:10.5430/ijfr.v11n5p285

Cited by 3 publications

(1 citation statement)

References 37 publications

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“…Several recent studies have investigated the profitability and financial performance of Indian banks [ 39 – 50 ]. These studies have used different proxies for measuring the financial and profitability of Indian banks.…”

Section: Literature Reviewmentioning

confidence: 99%

The moderation role of board independence change in the relationship between board characteristics, related party transactions, and financial performance

Almaqtari

Farhan²,

Al-Hattami³

et al. 2022

PLoS ONE

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The present study examines the moderation effect of board independence change on the relationship between board characteristics, related party transactions and financial performance of Indian listed banks over 10 years from 2010 to 2019. While board size, independence, diligence, and remuneration were taken to represent board characteristics, all key personnel and subsidiaries’ transactions were considered measures for related party transactions. On the other hand, the financial performance of banks was measured by two accounting-based measures (return on assets and profit after tax) and two market-based measures (earning per share and Tobin Q). The results revealed that board independence change has a significant negative effect on financial performance. Further, the results indicated that board independence change moderates positively and significantly the relationship between related party transactions and financial performance. The findings also showed that board independence change had a moderating effect that significantly and negatively weakens board size and effectiveness, negatively influencing banks’ profitability. Unlike other studies, this study uniquely uses board independence change as a moderator between board characteristics, related party transactions, and several measures of banks’ financial performance. The limited research highlighting this issue, where Indian banks have encountered several challenges in the last few years, has motivated the present study to bridge the existing gaps in the strand literature. Therefore, this research opens useful insights and has beneficial implications for policymakers, bankers, financial analysts, and academicians.

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Section: Literature Reviewmentioning

confidence: 99%

The moderation role of board independence change in the relationship between board characteristics, related party transactions, and financial performance

Almaqtari

Farhan²,

Al-Hattami³

et al. 2022

PLoS ONE

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Major Determinants of Bank Profitability in India: A Machine Learning Approach

Gupta

Mohapatra

Meitei

et al. 2023

Global Business Review

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From reforms and fin-tech revolutions to macro-economic shocks, the Indian banking sector has witnessed rapid changes over the last two decades, which has significant implications for banks’ profitability. Viewing bank profitability from three different dimensions, Net Interest Margins (NIM), Return on Assets (RoA) and Return on Equity (RoE), this study has explored the key determinants with the help of machine learning algorithms. It has used a pooled data set of domestic and commercial banks covering 2005–2021. As a dependent variable, profitability by each measure (NIM, RoA and RoE) is reclassified into three categories, above average, average and below average, based on their quartiles. Twenty-one explanatory variables comprising bank-specific, macroeconomic and policy variables are chosen after due validation using feature selection methodology and multicollinearity check. The random forest (RF) classification algorithm is executed using the CARET package in R. The results obtained from feature selection are corroborated with the RF classification findings. The results are robust and give clear-cut visibility of unique and common factors influencing three profitability measures at varying levels. The classification estimates suggest that the bank-specific variables are major determinants of NIM, while macroeconomic and policy variables are the key determinants of RoA and RoE. Further, the results also suggest that the ratio of non-performing assets to total assets and business per employee are two such bank-specific determinants that play an important role in all three dimensions of profitability. Thus, recapitalization and automation will play an important role in bank profitability.

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Innovation changes and the traditional financial sector

Wójcik-Czerniawska

2022

HSSR

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Purpose of the study: The main objectives of this work are to analyze the innovation process in general and financial Innovation in particular, during which potential effects will appear on the financial structures of economic units and considering the recent financial events of the crisis of the subprime discuss whether financial Innovation is a source of growth or, on the contrary, is a source of financial instability. Methodology: The financial crisis has cast a shadow over recent financial innovations, particularly those that call for risk elimination. This research used secondary methods for innovation changes and traditional financial sectors. The secondary research method will collect data through google, websites, books, and other sources. Main findings: The main goal of financial technologies offered by entities in this sector is to improve the efficiency and availability of financial services, both from the customer and the perspective and a financial institution. The digital economy is considered a vertical—data-focused, and connected economy to the device, with a centralized architecture and heavy technology. Application of the study: In debates about the regulation of financial markets, the functions and social use-value of financial Innovation come under scrutiny. In developing countries, the crucial question arises of to what extent financial innovation is essential to creating the financial infrastructure necessary for industrialization, instead of simply making wealth more liquid where blockchain technology and cryptocurrencies and crypto money become more active. Originality/Novelty of the study: In this way, new products have been created, new forms of derivatives, products that transfer risk, and so on. It should be borne in mind, in any case, that the Schumpeterian vision of the innovation process in the present case that of financial Innovation is part of a regular course in terms of an economy that seeks growth. However, the financial crisis has cast a shadow over recent financial innovations, particularly those that call for risk elimination.

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The Determinant of Financial Performance of Indian Public Sector Banks- A Panel Data Approach

Cited by 3 publications

References 37 publications

The moderation role of board independence change in the relationship between board characteristics, related party transactions, and financial performance

The moderation role of board independence change in the relationship between board characteristics, related party transactions, and financial performance

Major Determinants of Bank Profitability in India: A Machine Learning Approach

Innovation changes and the traditional financial sector

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