The Impact of Risk Management on Financial Performance of Banks: Case of Tunisia

Moussa, Mohamed Aymen Ben

doi:10.36690/2674-5208-2022-4-33

Cited by 2 publications

(2 citation statements)

References 5 publications

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“…So that this should require a balance between the amount of capital and the capital needed so that the company is able to prosper the shareholders. But on the other hand, these findings confirm previous studies by Moussa & Aymen (2014) and Moradi et al, (2012) where capital structure, in this case DAR, has no significant effect on financial performance. Furthermore, these findings also do not confirm studies by Chisti et al, (2013), Quang & Xin (2014, Mireku et al (2014), andMumtaz et al (2013) where capital structure has a significant effect on financial performance.…”

Section: Conclusion Of Statistical Analysissupporting

confidence: 89%

The antecedents of financial performance and their implications for firm value in mining sector companies listed on the Indonesia Stock Exchange

Abbas,

Setyadi,

Paminto

et al. 2023

J. of Law and Sust. Develop.

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Indonesia is a nation characterized by its substantial endowment of natural resources. Based on the most recent data provided by the World Bank, Indonesia holds the fourth position in terms of global copper production, ranks fifth among the major nickel producers worldwide, stands at the eighth position in terms of global gold production, and is recognized as the largest coal producer globally. The allure of Indonesia's abundant natural resources serves as a magnet for potential investors. Furthermore, the valuation of mining industry stocks serves as a crucial metric for investors to allocate their capital and pursue potential profitability in forthcoming periods. The mining sector firms encompass a collection of enterprises that are publicly traded on the Indonesia Stock Exchange. These companies operate within several sub-sectors of mining, quarrying, and other related mining services. The swings observed in mining stock prices, characterized by both increases and losses, signify a dynamic and volatile market environment. The fluctuation in stock prices can be attributed to the interplay of supply and demand, which is influenced by a multitude of factors encompassing both macroeconomic and microeconomic considerations. The findings of this study indicate that the first model demonstrates a positive and statistically significant relationship between ownership structure, intellectual capital, and financial performance. Moreover, the moderation of intellectual capital in the context of the interaction between capital structure and financial performance demonstrates a noteworthy and unfavorable impact on financial performance. In contrast, it has been observed that both capital structure and exchange rates do not exert a substantial influence on financial performance. The findings of the second model indicate that various factors, such as capital structure, financial performance, ownership structure, and intellectual capital, have a statistically significant and positive impact on business value, with the exception of the exchange rate. In the present study, the findings pertaining to indirect influence through mediation reveal that the financial performance of firms plays a mediating role in the association between capital structure, ownership structure, exchange rates, and firm value. The findings of the analysis indicate that the proposed hypotheses can be accepted, with the exception of a few hypotheses that were rejected due to the lack of substantial effects observed in the results. The validation of many hypotheses within the initial framework provides empirical support for the theoretical propositions and conceptual frameworks posited by Jensen and Meckling (1976), Sveiby (2010), and Stewart and Ruckdeschel (1998). The acceptance of the hypothesis in the second model aligns with the viewpoints expressed by Brigham et al. (2015), Freeman (2015), and Jensen & Meckling (1976). The internal role of a firm plays a crucial function in attaining optimal financial performance and determining the value of a mining company.

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Section: Conclusion Of Statistical Analysissupporting

confidence: 89%

The antecedents of financial performance and their implications for firm value in mining sector companies listed on the Indonesia Stock Exchange

Abbas,

Setyadi,

Paminto

et al. 2023

J. of Law and Sust. Develop.

View full text Add to dashboard Cite

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“…A linear association was found between capital adequacy and banks' productivity, whereas an inverse relationship was found between the quality of a bank's assets and its profitability. Moussa (2013) used data from 2001-2009 to determine the correlation between financial performance and capital of nineteen Tunisian banks. The ratio of capital to performance was estimated using three metrics: the net interest margin (NIM), return on assets (ROA), and return on equity (ROE).…”

Section: Empirical Reviewsmentioning

confidence: 99%

Impact of Capital Adequacy Risk on the Financial Performance of Microfinance Banks in Nigeria

David,

Sola

2023

Int. J. Res. Publ. Rev.

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Microfinance banking sub-sector is key to growth and stability, especially in an emerging economy like Nigeria. The sector offers micro-credits to small and medium sized businesses and thus must have sufficient capital to fund their regular operations and guarantee the long-term health of their country's financial system. However, inadequate capital has been reported as a major cause of distress and eventual collapse of banks/financial institutions. Therefore, this study investigated the impact of capital adequacy risk on the financial performance of microfinance banks in Nigeria. Seven microfinance banks operating at the Central Bank of Nigeria's national category were selected and their annual financial reports in the last eleven years were used as panel data for this research. A panel regression model was used to specify the relationship between the dimensions of capital adequacy risk (capital adequacy ratio, operating efficiency & credit risk) and financial performance (return on assets). Descriptive statistical tools such as the mean, standard deviation and Jarque-bera were used to describe the data, while econometric tools such as the LLC unit root, Hausman specification and ordinary least squares technique were used for the inferential analysis. These were done via the E-view 9 statistical software. The results of the analysis revealed that both capital adequacy ratio and cost-to-asset ratio have a direct and significant relationship with return on assets. Similarly, non-performing loan ratio has an inverse and significant relationship with return on asset. The study concludes that capital adequacy ratio, operating efficiency and credit risk are key drivers of profitability among microfinance banks in Nigeria. Therefore, it is recommended that the country's apex bank should enforce compliance with regulations on capital adequacy in the microfinance banking subsector. Furthermore, relevant stakeholders in the bank should ensure prudency in operating cost and monitoring of loan portfolios to reduce defaults.

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The Impact of Risk Management on Financial Performance of Banks: Case of Tunisia

Cited by 2 publications

References 5 publications

The antecedents of financial performance and their implications for firm value in mining sector companies listed on the Indonesia Stock Exchange

The antecedents of financial performance and their implications for firm value in mining sector companies listed on the Indonesia Stock Exchange

Impact of Capital Adequacy Risk on the Financial Performance of Microfinance Banks in Nigeria

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