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Copyright of Journal of The Planner & Development is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In 1998, the act on mutual savings banks was amended to create a legal basis for auditor designation for certain mutual savings banks in Korea. Also, a series of restructuring processes for the savings banking industry took place in 2011 due to the insolvency of some savings banks. This study empirically analyzes whether the auditor designation rule has affected how mutual savings banks set aside allowance for bad debts and thus help improve their accounting transparency (better asset quality and less earnings management), as well as the impact of this rule on audit fees. It also looks into whether there is any notable difference in accounting transparency and audit fees between before and after the savings bank incident in 2011. We specifically set the six hypotheses about the effect of auditor designation on asset quality, earnings management, and audit fees, and the different effect of savings bank incident on these three factors. We investigate the hypotheses using regression models with 809 firm-year sample from 2005 to 2014. The results show that asset quality has improved for auditor designated mutual savings banks and after the incident. With respect to earnings management, mutual savings banks with designated auditors are found to be less likely to manage their earnings using allowance for bad debts, but there is no statistical significance in difference between before and after the savings bank incident. As for audit fees, the amount of fees is large for auditor-designated mutual savings banks, and after the incident. This study would offer useful insights to financial regulators, auditors, audit clients, and other stakeholders.

There is a current argument relating to the capital infusion to the banks for strengthening capital on one side, without taking prudential measures to reduce the strains already present in the credit quality of banks on the other. The regulators thought that recapitalization of banks will be used to effectively reduce the cost of funds in the regular business provided when there is a higher lending demand. The capital infusion may turn out ineffective if there is less loan demand. On this background, this paper examines the effect of recapitalization of Indian public sector banks, and its impact on banks stability, competitiveness and profitability. Out of 21 banks, 18 banks reacted positively in case of one indicator, but failed in regard to overall indicators. Finally, the study reveals an interesting outcome that, there is no relationship between the size of the infusion and the performance of the bank. Hence, the study concludes that the capital infusion will help the banks significantly to improve the stability, competitiveness and profitability only when the banks’ fundamentals are strong, combined with the deployment of fresh funds and their managerial capability.

This study aims to determine the asset quality of publicly owned deposit banks operating in Turkey by examining the 11- year financial statements covering the years 2010-2020 and to rank the banks using the integrated Entropy-TOPSIS method. As of February 2022, there are 51 banks in Turkey. 11 of these banks are deposit banks. Among the deposit banks, the number of state-owned deposit banks is three. In the study, financial ratios related to the asset quality of 3 state-owned deposit banks operating in Turkey for the period 2010-2020 were calculated. Then, criteria weights were calculated with the Entropy method, and the banks were ranked with the TOPSIS method. According to the results obtained from the study, when analyzed in terms of state-owned banks, it is seen that Ziraat Bank with the code B1 took the first place in the 11 years, although there are some differences from year to year in the rankings of banks with good asset quality. At the same time, it has been determined that Vakıfbank and Halk Bank, coded B2 and B3, generally share the second and third places, and their scores are very close to each other. In addition, banks are required to review their asset investments and credit policies to protect them from liquidity and credit risk, and it is recommended to take measures regarding bad loans and non-performing loans. [ABSTRACT FROM AUTHOR]

Copyright of Jurnal Ekonomi Syariah Teori dan Terapan is the property of Universitas Airlangga and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study investigates the factors affecting the loan quality of banking sector in seventeen emerging and developing markets using quarterly panel dataset covering period of 2010–2019 and utilising feasible generalised least square methodology. Our empirical analysis suggests that inflation and lending rates negatively affect the banks' loan quality measured by non-performing loans. On the contrary, economic growth and capital adequacy show a positive impact on banks' loan quality. The inclusion of the ratio of net open position in foreign exchange to capital and its' lagged values, as an additional factor, has marked out this research from other studies. Our results reveal that the ratio has a significant negative impact on loan quality in banking. This finding, as it was also seen in Asian crises of 1997, indicates that the higher the ratio net open position in foreign exchange to capital cause moral hazard problem leading to the higher non-performing loans in banking sectors. [ABSTRACT FROM AUTHOR]

The performance of the banking sector is significant for any economy. The growth of a nation relies significantly upon efficient and optimum utilization of resources and also on operational efficiency of various sectors of an economy, of which the banking sector is a critical part. Banking system strengthens the stimulation of capital formation and provides liquidity. Indian banking sector comprises private, public, rural and foreign banks. In India, public sector banks are encountering challenges from private sector banks and are under constant pressure to perform better. Hence, this study endeavors mainly to analyze and compare the financial performance of the private and public banking sector by using CAMEL rating approach and for this purpose total of fourteen banks, representing the private and public, have been selected. The selected sample are the market leaders and have the highest market capitalization in the capital market. Overall, the paper aims to measure and compare the financial performance of private and public sector banks by employing CAMEL approach on their audited financial reports of eight years period i.e. (2011–2018). The ratios considered for this analysis includes Capital Adequacy (CA), Asset Quality (AQ), Management Soundness (MS), Earnings and Liquidity (LR). This study devised ranking method based on averages of various ratios and one way annova test is applied to find out statistical significance difference amongst groups. Results shown that private sector banks are better performers compare to Public sector bank. The overall results signify that the performance of private sector banks has improved because of the implementation of modern technology banking reforms and recovery mechanism.

There is a current argument relating to the capital infusion to the banks for strengthening capital on one side, without taking prudential measures to reduce the strains already present in the credit quality of banks on the other. The regulators thought that recapitalization of banks will be used to effectively reduce the cost offunds in the regular business provided when there is a higher lending demand. The capital infusion may turn out ineffective if there is less loan demand. On this background, this paper examines the effect of recapitalization of Indian public sector banks, and its impact on banks stability, competitiveness and profitability. Out of 21 banks, 18 banks reacted positively in case of one indicator, but failed in regard to overall indicators. Finally, the study reveals an interesting outcome that, there is no relationship between the size of the infusion and the performance of the bank. Hence, the study concludes that the capital infusion will help the banks significantly to improve the stability, competitiveness and profitability only when the banks' fundamentals are strong, combined with the deployment of fresh funds and their managerial capability. [ABSTRACT FROM AUTHOR]

Merger of five associate banks of State Bank of India and Bharatiya Mahila Bank with the SBI is a mammoth merger in the recent years. After the merger, three years are completed. In this backdrop, this paper makes an attempt to compare the performance of SBI during postmerger period with that of the Group in the pre-merger period. For this purpose, the relevant data for a period of six years - three years prior to merger and three years after the merger are used and analysed with the help of ratios and descriptive statistics besides 't' test for testing the hypothesis. The study finds significant improvement in the performance during the post-merger period from the point of view of volume of business (deposits and gross advances). However, improvement in the asset quality (Gross Non-performing Assets, Gross NPA Ratio, Net NPAs and Net NPA Ratio), profit and profitability (Net Profit, RoE and RoA) and capital adequacy (CAR) is not significant during the post-merger period compared to pre-merger period. [ABSTRACT FROM AUTHOR]

The banking sector is at risk of worsening loan quality, which is a major threat to the financial system’s stability. The impact of foreign direct investment (FDI) inflows on nonperforming loans (NPLs) in the United Arab Emirates (UAE) is empirically investigated in this study. The data from 2008 to 2017 are collected and analyzed through the ordinary least squares (OLS) technique. The findings reveal that FDI inflows reduced the size of NPLs during the economic crisis. Also, the combined effect of higher FDI inflows and bank efficiency reduced the size of NPLs for banks, while the combined effect of FDI inflows and better institutions, such as strong regulatory quality, did not reduce the size of NPLs but rather increased the size of NPLs. The findings have implications and contribute to the literature to establish a relationship between FDI inflows and NPLs by examining the relationship between FDI inflows and NPLs in the context of banks in the UAE.

This study aims to assess and analyze the health level of PT. BPR Weleri Makmur if calculated using the CAMEL (Capital, Asset Quality, Management, Earning, and Liquidity) method in the 2015-2018 period based on Bank Indonesia Director's Decree No. 30/12 / KEP / DIR dated April 30, 1997. The component assessed is Capital (Capital) using CAR ratios, Asset Quality by using KAP ratios and PPAP ratios, Management using Management calculations using general management and risk management, earnings (earning) using the ROA ratio and the BOPO ratio, and Liquidity (Liquidity) using the Cash Ratio and LDR ratio. The results of the analysis and discussion showed that in the 2015-2018 period as a whole, the health level of PT. BPR Weleri Makmur is categorized in the healthy category, and the health level progress based on overall credit score at PT. BPR Weleri Makmur in the 2015-2016 period decreased.

Past financial crises and recessions have revealed the importance of the economy’s condition for the loan quality. Macroeconomic determinants of the non-performing loans have been attracting considerable attention in recent years. The aim of this paper is to organize and summarize studies examining the role of GDP growth and its impact on bank loan quality. This approach reveals the research problem which is to specify if there exists a statistically significant relationship between economic growth and the level of non-performing loans. It is equally important to determine the direction of this link. By appealing to common knowledge, the research hypothesis states that an increase in economic activity results in improving loan quality. To verify the hypothesis, the analysis of the relevant literature and the methods of verbal as well as tabular description have been applied. Empirical results on the link between the macroeconomic environment and the level of non-performing loans appear to be quite conclusive. It has been found that an economic expansion generally improves the loan quality. This broadly proven relationship is in line with many studies which confirm the borrowers’ increased willingness to repay debts in a favourable economic environment. Far less frequently, the macroeconomic activity leads to future bank losses. Additionally, some studies do not provide any statistically significant effect of GDP growth on the loan quality.

The purpose of this article is to evaluate the financial soundness of commercial banks listed on the Palestine Exchange using the CAMEL rating system. A content analysis, composite rating, and a one sample t-test are applied to a sample of six local banks operating in Palestine. Secondary data were obtained from the financial statements of the banks for the period of 2007–2017 in order to conduct the research and evaluate their financial performance. The empirical test has shown that Palestinian banks adhere to the Basel Committee standards in terms of capital adequacy and that they display stability in terms of profitability and liquidity. However, the paper concludes that the operational efficiency of the banks being evaluated is “fairly managed”. Finally, the findings indicate significant differences amongst Palestinian banks in terms of performance, assessed using the CAMEL rating system. This paper suggests that the listed Palestinian banks should focus on long-term investments rather than short-term ones, and monitor their risk management practices to increase their profits and move towards sustainability and growth.

Banks are financial intermediaries who transform deposits into loans. Banks in the MENA (Middle East and North Africa) region use large deposits from oil companies and big businesses to finance trade, and fund government and private sector infrastructure projects. The role of banks in financing trade and development is significant as undeveloped capital markets are unable to perform this function. During the COVID-19 crisis, banks sustained liquidity shocks, as deposits were withdrawn to meet personal and business needs. Essentially, banks could not make loans, as the funds to make loans were depleted. The purpose of this study is to evaluate the effectiveness of liquidity creation as a main force, in conjunction with other performance predictors such as efficient asset management, asset quality, and bank size, on bank financial performance, either individually or in conjunction with liquidity creation during the COVID-19 financial crisis. We used bank financial data from a sample of 298 banks from 11 countries in the MENA region, including Egypt, Tunisia, Morocco, Qatar, Bahrain, Oman, Kuwait, Saudi Arabia, United Arab Emirates, Jordan, and Israel, from 2020 to2021. Liquidity creation, efficient asset management, asset quality, and bank size increased bank return on assets and return on equity. Bank size and asset quality acted jointly with liquidity creation to increase return on assets and increase return on equity. We conclude that as liquidity creation acts individually, and in conjunction with asset quality and bank size to increase bank profits, both its main effect and its moderated effect, can maintain bank profitability, during periods of extreme liquidity supply shocks, such as the COVID-19 crisis.

The performance of the banking sector is significant for any economy. The growth of a nation relies significantly upon efficient and optimum utilization of resources and also on operational efficiency of various sectors of an economy, of which the banking sector is a critical part. Banking system strengthens the stimulation of capital formation and provides liquidity. Indian banking sector comprises private, public, rural and foreign banks. In India, public sector banks are encountering challenges from private sector banks and are under constant pressure to perform better. Hence, this study endeavors mainly to analyze and compare the financial performance of the private and public banking sector by using CAMEL rating approach and for this purpose total of fourteen banks, representing the private and public, have been selected. The selected sample are the market leaders and have the highest market capitalization in the capital market. Overall, the paper aims to measure and compare the financial performance of private and public sector banks by employing CAMEL approach on their audited financial reports of eight years period i.e. (2011-2018). The ratios considered for this analysis includes Capital Adequacy (CA), Asset Quality (AQ), Management Soundness (MS), Earnings and Liquidity (LR). This study devised ranking method based on averages of various ratios and one way annova test is applied to find out statistical significance difference amongst groups. Results shown that private sector banks are better performers compare to Public sector bank. The overall results signify that the performance of private sector banks has improved because of the implementation of modern technology banking reforms and recovery mechanism. [ABSTRACT FROM AUTHOR]

The research aims to investigate the impact of increased capital requirements and high liquidity levels on the profitability of European banks in the post crisis period. The study examines the largest banks in the European Union spanning 28 countries using data from 2010 to 2018. It used three measures to define bank profitability: return on average assets, return on average equity, and operating profit to risk weighted assets. Capital, liquidity, size, and asset quality represent bank specific determinants, while economic growth and inflation are considered as the main external determinants having influence on profitability. We used multiple regression models to analyze the association amongst the variables. The results revealed a positive and significant association between liquidity level and bank performance. Asset quality showed a negative and statistically significant influence on bank performance, while economic growth and inflation have no significant influence on bank performance. The study concludes that there is limited influence of the Basel III on bank profitability although the policy is important in achieving banking stability. This study contributes to the literature by empirically analyzing the impact of capital regulation on bank performance for the biggest banks in Europe. Although the Basel III framework is important for prudential banking, its effects on the performance of European bank is debatable. [ABSTRACT FROM AUTHOR]

The purpose of this study is to conduct an in-depth investigation to gauge whether CAMEL indicators have an impact on performance of Commercial banks operating in Pakistan. For this study, a sample of 10 Commercial banks operating in Pakistan’s Banking Industry for the period 2012-2018 has been selected. Empirical results revealed that bank performance can be influenced by asset quality, earnings quality and liquidity. Capital adequacy and management efficiency has no impact on EPS (proxy for bank performance). The findings outcome is imperative to various parties who have stake in banking sector e.g. depositors, shareholders, SBP, investors etc. It can also be used as a basis to identify the areas where the banks are performing poorly and take suitable actions which would assist in sustaining and growing the banking sector of Pakistan. [ABSTRACT FROM AUTHOR]

The Insolvency and Bankruptcy Code of India aims at a time-bound resolution of stressed assets of corporates, providing the much-needed respite to creditors, particularly banks. Since its inception, there have been several upsides to the IBC's performance, such as instituting a creditor-friendly resolution regime and nudging debtors towards repayment. For banks, the IBC has ensured better recovery of largevalue industrial loans over the existing recovery channels. The IBC complements the RBI's Prudential Framework for resolution of stressed assets ensuring a more effective use of the framework as compared to the pre-IBC restructuring schemes. Even if liquidation is predominantly the method of resolution used till now, most of the liquidated cases are non-functional. Al though there are delays in resolution plan proceedings, it is the liquidation value of assets than the delays that influences recovery. Hence, admitting cases early under the IBC, through an appropriate incentive framework in banks, can help improve the IBC's efficacy. [ABSTRACT FROM AUTHOR]

A strong Banking Industry is a significant measure of a country's economic development. An attempt has been made in this study to assess the performance and the soundness of the top three public sector banks based on the market capitalization namely SBI, BOB, and PNB, and from the private sector it's HDFC, ICICI and Kotak Mahindra bank. The data has been collected for the period of 2017-18 to 2019-2020 (3 years). CAMEL (Capital adequacy, Asset Quality, Management Efficiency, Earning Quality and Liquidity) framework has been used to evaluate the performance. As per the composite ranking based on all the parameters and subparameters of the CAMEL model, HDFC secured 1st rank followed by Kotak Mahindra Bank and ICICI. The fourth and fifth ranks are occupied by Bank of Baroda and State Bank of India respectively while the last position is secured by Punjab National Bank. [ABSTRACT FROM AUTHOR]

After the subprime crisis, with the worsening of asset quality all around Europe, a lack of harmonization emerged concerning credit classification, monitoring, provisioning and writing-off in the banking industry. A wave of analysis and new regulations by the Supervising Authorities aimed at highlighting best practices and creating a common standard, in order to enhance transparency and accounting data comparability across the European Union. A point of particular attention concerned the usage of forbearance measures and the classification and provisioning of forborne positions. This paper deep-dives into this issue leveraging on the public dataset disclosed by the European Banking Authority, following the 2018 EU-wide Transparency Exercise. The purpose of this paper is twofold. On one side, we want to gauge the extension of the forbearance measures' usage among a sample of major European banks and the drivers of this usage. On the other side, we want to analyze which main factors impact on the loan loss provisioning of forborne positions. [ABSTRACT FROM AUTHOR]

This paper empirically assesses the relationship between Deposit Insurance Funds (DIF) and the quality of risk assets of listed Deposit Money Banks (DMBs) in Nigeria. The entire fifteen listed DMBs in the country as of 31st December, 2017 were focused on and the secondary data were subsequently sourced from the yearly financials of the Nigeria Deposit Insurance Corporation (NDIC) for a 29-year period covering from 1989 to 2017. The Auto-Regressive Distributed Lag (ARDL) and the Vector Error Correction (VEC) estimation techniques were the basis of estimating the relationship between the variables of interest in this study. Evidence from our analyses indicates that the volume of total deposits and total loans and advances of DMBs have long run negative and statistically significant relationship with DIF. Conversely, the quality of risk assets of DMBs exhibits a positive and insignificant relationship with the target reserve ratio of DMBs. The study thus recommends that regulatory agencies in the banking sector (CBN and NDIC), amongst others, collaborate with listed DMBs to diversify and manage their risk assets by strategically intensifying the implementation of existing measures aimed at minimising incidences of loan default and the alarming levels of non-performing loans in the portfolio of Nigerian DMBs.

This research aims to determine the factors that impact liquidity risk. The sample used in this research is a banking sector that is listed on the Indonesia Stock Exchange (IDX) in the period 2008-2017. Independent variable in this research bank size, deposits, profitability, cost of funds, asset quality, capital adequacy ratio, economic cycle, and inflation and the dependent variable is liquidity risk. The amount of the sample of the research amounted to 25 banking sector, by using purposive sampling. The result of this research indicates that bank size, profitability, cost of funds, and asset quality have a negative effect on liquidity risk, while deposits, capital adequacy ratio, economic cycle, and inflation have no impact on liquidity risk. The results of this study are expected to be used as a reference for bank managers and investors in looking at the factors that affect the liquidity risk in the banking industry.

Objective: Every banking system, whether Islamic or conventional, faces a wide range of risks, among which liquidity risk seems to be one of the most substantial. It is also noticeable that liquidity management in the Islamic banking is more complicated than in the conventional banking because the traditional instruments used in liquidity management are based on interest and their use in the Islamic banking system is not permissible. However, it has been proclaimed that, especially after the 2008 financial crisis, in terms of liquidity risk management, the Islamic banking system has acted more persuasive than the conventional banking system. Method: Applying PCSE and FGLS panels methods for 72 Islamic, and 51 conventional banks, this research has examined the relationship between liquidity risk, asset quality, and financing in the two banking systems during the period 2011-2016. Results: The results show that, in Islamic banking, while liquidity risk has a significant positive relationship with financing, the former indicates a negative relationship with asset quality. However, in conventional banking, the effect of financing and the size of liquidity risk is positive and significant, but the effect of asset quality is not significant.

The focus of the bank to increase profit. However, the increase in profit is not important to focus on because the sustainability of growth is more important. Measure the level of sustainable growth is an important factor that needs attention as a reflection of the performance of a bank. The measurement uses the concept of growth called the Sustainable Growth Rate (SGR). This study aims to provide empirical evidence on the effect of liquidity proxy Loan to Funding Ratio (LFR), asset quality proxy by Non-Performing Loan (NPL) and efficiency proxy by Operating Cost to Operating Income (BOPO) toward SGR. The sampling technique is purposive based on the criteria so that the selected 22 banks with the study period 2012-2107. Unit analysis as much as 132 observations. The analysis of data using panel data regression. The findings of the study showed that LFR, NPL, and BOPO had a significant negative effect on SGR. The implications of research that SGR becomes important as it relates to the bank's strategy to continue to grow and continue in order to expand its business maximally while maintaining internal and external funding sources.

Monetary policy is affected by a slowdown in economic growth. In the formation of financial stability cannot do without measures to improve the banking sector. Obviously, the accumulation of risks in this area is fraught with the inability of the banking sector to show resilience to external shocks. The banking sector rehabilitation program in Kazakhstan is a wide range of activities, including the assessment of the quality of banks 'assets, so-called stress testing, and support for SLBs from the resources of the National Bank, provided that they are capitalized by second-level banks' shareholders. The main directions of the Program are: increasing the financial stability of the system-forming bank; Increasing financial stability of large STBs and change the regulatory and supervisory environment to improve the financial stability of the banking sector.

This study examined the effect of bank specific factors on asset quality of listed deposit money banks in Nigeria. Asset quality was proxied by nonperforming assets whereas the independent variables include Return on Asset, Interest Income Spread, Income Diversity and Credit Growth Rate. The study used a correlation research design for which data were collected from the published annual financial reports and accounts of the studied DMBs listed in Nigeria for seven years ((2012-2018) and analyzed using multiple regression analysis with the aid of STATA software. The population consisted of the 14 listed DMBs on the Nigerian stock exchange as at 31st December, 2018, whereas as a result of applying a filter, the sample size was 13 listed DMBs. The outcome of the study revealed that ROA has a negative and significant effect on Asset Quality of listed DMBs in Nigeria. While Income Diversity and Interest Income Spread have a favorable and considerable impact on DMB Asset Quality in Nigeria. Credit Growth Rate, on the other hand, had a favorable but negligible influence on Asset Quality of Nigerian listed DMBs. The study concludes that management of listed DMBs in Nigeria should aim to balance their profit pursuit with better asset quality, based on the data. Furthermore, in order to enhance the asset quality of DMBs, the study suggests that management should always guarantee that other investments outside of their lending/financial intermediation business are kept to a minimum or not prioritized at all.

A robust financial structure is considered essential for the swift development and growth and of an economic system. The banking structure is a vital constituent of the financial structure of a nation. The banking system performance assessment is an influential determinant and indicator of the economy's financial strength. Financial Innovation approaches resulting from new technology helps in better estimation of Financial Performances of the banking sector. Banks need to be more closely and accurately watched as they play the role of facilitator of monetary policy of the economy. The prime objective is to examine the financial performance of Saudi Arabia's banking sector through Innovative approaches. With this view, a case study of XYZ Bank has been undertaken. For financial performance evaluation, the CAMEL model has been applied as one of the innovative approaches. This tool is a widely accepted criterion in the field of financial performance evaluation of the banking sector. CAMEL is a ratio-supported mechanism that evaluates bank performance through capital adequacy, quality of assets, management efficiency, quality of earnings, and liquidity. For analyzing the CAMEL model, the various ratios of the model in terms of proxy ratios are given below: For the analysis, nine-year data from 2009 to 2018 has been analyzed using a multiple linear regression model using the SPSS package. The study observed that this innovative approach, i.e., CAMEL specific factors, has mixed influence on the financial performance of XYZ Bank. Capital adequacy and asset quality have a positive effect on bank performance. Moreover, the study also highlights that management efficiency insignificantly affects the profitability of the bank. Moreover, earning quality also signifies a negative influence on profitability. The correlation between asset quality and ROA is negative. It is inferred that those banks with more operating profits and better liquidity management could report high profits. The study further advocates that XYZ Bank must improve its earning quality and management efficiency to come at the same level with the banks having good financial performance and should use innovative methods to estimate financial performance from time to time. [ABSTRACT FROM AUTHOR]

A healthy and profitable banking system can better resist against economic shocks, and play a more prominent role in financial system stability. Banks failure has disastrous effects on banking system and its effects spread on other banks and affects the whole economy. The main objective of this study is to investigate the impact of asset quality on financial distress in the country's banks. In this study, using financial ratios the effect of asset quality, payment facility and capital adequacy on financial distress indicators is examined. For this purpose, data from 18 banks during the years 1388 to 1394 are collected from Tehran Stock Exchange. Using the software EViews, data are analyzed using panel regression models. It is shown that the ratios of impaired loans to total loans and net charge offs to total loans have positive and significant effect on financial distress. The ratios of loan loss reserves to total loans and net loans to total assets have negative and significant effect on financial distress. Moreover, capital adequacy ratio has positive and significant effect on financial distress.

This paper intends to discuss the current trends of Indian banking sector and to identify emerging issues, challenges and opportunities for future growth of banking sector. In spite of effective and impressive growth in banking sector operation during the post-liberalization period, Indian banks, in recent years, are facing problems in managing stressed assets. The issues of rising NPAs, persistent asset quality deterioration, liquidity management, and stressed banks' balance sheets remain as the key priorities for the banking sector nowadays along with macroeconomic issues like conformity of Basel III norm, IFRS-converged Indian Accounting Standards, financial innovation etc. The data period considered in this study is 2009-2018. The profitability analysis of the study confirms that Indian banking sector has shown inconsistent performance during the last ten years period. The study observed that future growth of banking sector is driven by rising rural income, growing demand for housing and personal loan, the move of financial inclusion and priority sector lending. [ABSTRACT FROM AUTHOR]

Past financial crises and recessions have revealed the importance of the economy's condition for the loan quality. Macroeconomic determinants of the non-performing loans have been attracting considerable attention in recent years. The aim of this paper is to organize and summarize studies examining the role of GDP growth and its impact on bank loan quality. This approach reveals the research problem which is to specify if there exists a statistically significant relationship between economic growth and the level of non-performing loans. It is equally important to determine the direction of this link. By appealing to common knowledge, the research hypothesis states that an increase in economic activity results in improving loan quality. To verify the hypothesis, the analysis of the relevant literature and the methods of verbal as well as tabular description have been applied. Empirical results on the link between the macroeconomic environment and the level of non-performing loans appear to be quite conclusive. It has been found that an economic expansion generally improves the loan quality. This broadly proven relationship is in line with many studies which confirm the borrowers' increased willingness to repay debts in a favourable economic environment. Far less frequently, the intensified macroeconomic activity leads to future bank losses. Additionally, some studies do not provide any statistically significant effect of GDP growth on the loan quality. [ABSTRACT FROM AUTHOR]

This paper aims to analyse the relationship between ESG and bank asset quality and the moderating role of profitability. We examine an international sample of 96 banks located in 33 countries using quarterly data covering the 2017-Q4 - 2022-Q3 period. Our findings show the existence of a positive ESG - asset quality relationship, which can be even reversed for particularly high levels of profitability. Moreover, we report significant differences between banks located in the European Union (EU) and in non-EU countries. We contribute to the literature by analysing the ESG - asset quality relationship, which has been hitherto largely overlooked, and we are the first quantifying how the marginal effect of ESG on asset quality varies depending on the level of profitability. Our findings have important policy and managerial implications in that banks should not only implement (and be pushed to implement) better ESG strategies, but also stabilise their financial performance, avoiding unsustainable short-term profits that could reverse the beneficial effects of ESG on asset quality. [Display omitted] There is a positive relationship between ESG and bank asset quality. This relationship can be reversed for particularly high levels of profitability. We quantify the marginal effect of ESG depending on the level of ROE. Banks should stabilise their ROE and avoid unsustainable short term profits. [ABSTRACT FROM AUTHOR]

This paper examined the correlation between firm ratings of banks and financial risks assessment of PEFINDO using profitability, asset quality, and liquidity as independent variables. This paper also investigated the impact of bank capital as controlling variable on bank ratings. The data which have been observed are financial reports from publicly-held banks in Indonesia and firm rating analysis released by PEFINDO during 2017-2021 consecutively, then was analyzed with regression model. This paper finds that profitability, asset quality and liquidity have no correlation with bank ratings without the existence of bank capital. As bank capital are taken into account, the correlation analysis had a significant difference and bank capital becomes determining factor in bank rating analysis.

European Union banks were severely hit by the global fi nancial crisis in 2008 and their stock prices and returns have generally not recovered since then, differently to what has been observed in other sectors (i.e., non-fi nancial corporations) and jurisdictions (i.e., US). In this paper, we focus on three episodes of fi nancial turmoil in EU fi nancial markets occurring after the global fi nancial crisis (August 2015, December 2015 and January 2016, and June 2016) and, through a series of linear regressions, with and without control variables, attempt to determine the common features of those banks which stock returns declined the most. Results of the regressions tend to suggest that size has been driving the decreases in stock returns in the three episodes. Regarding asset quality, the Texas ratio has been a decisive factor in the evolution of stock returns of EU banks in the second and third periods. Interestingly, profi tability variables seem not to be statistically signifi cant to explain the declines in stock returns, except in the third period, but only under some specifi cations. An evolution on the perception by fi nancial market participants on EU banks, with a larger importance on asset quality in the latter periods, can also be observed. Lastly, on the basis of these results, further policy actions would be needed to clean-up the balance sheet of banks, as a necessary step towards full recovery after the global fi nancial crisis.

The purpose of the research is to identify the influence of Ukraine’s economic development on the international agencies' credit rating of its banking system. The instability and ambiguous geopolitical position of Ukraine are complicating any predictions for its economic developments. In the meanwhile, massive restructuring of all sectors of the economy became the necessary minimum for the reformation of the country and the achievement of the international standards. It is interesting to see how exactly these international standards, as represented by the evaluation of the rating agencies, appraise Ukraine, and particularly its banking sector. The methodology involves the analysis of the three major Ukrainian banks – PrivatBank, Oschadbank, and Ukreximbank using Fitch’s credit quality assessment systematic as an example. The comparative analysis was performed using Tier 1 capital ratio and loan-to-deposit ratio of these banks, year-to-year quarterly GDP growth, consumer price index (CPI) year-to-year change, UAH/USD exchange rate, 2-year and 5-year government bond yield, as well as 2-year and 5-year credit default swap (CDS). Results show that the most influential credit rating drivers for Ukrainian banks are: exchange rate; funding and liquidity; capital position and asset quality; sovereign risk. The research showed that the 2-year and 5-year government bond yield in USD and 2-year and 5-year CDS were influenced by similar trends. The yield on short-dated Ukrainian governmental bonds has shown a parallel increase with the corresponding CDS that indicated the market’s evaluation of the stressed condition of the country’s government and economy. Additionally, conventional yield structures displayed inversed nature with 2-year governmental bond yield in USD trading at significantly higher yields than 5-year government bond yield in USD during times of economic distress. Although longer maturity instruments should usually trade at a higher rate, such a development could have reflected the public markets’ scepticism to the Ukrainian government’s short-term solvency. The closer look at the Tier 1 capital ratio, which is considered to be a key indicator of the financial health of the banks, revealed analogy between it and three major Ukrainian banks rating development, indicating the Tier 1 capital ratio as a strong influencing factor. Loan-to-deposit ratio as an indicator of bank liquidity moved in parallel with decreasing credit ratings. The strong decrease in the UAH/USD exchange rate mirrored a strong increase in inflation and overall worsening state of the Ukrainian economy also being reflected in the major banks’ ratings. Practical implications. The correlation of these factors is relevant for bank managers and investors who can use financial market indicators to forecast and plan their own ability to conduct business. Likewise, academic researchers can further build on this study to add to the literature on country-specific reviews of sovereign debt crises and their impact on national banking systems. Value/originality. This research demonstrates that a worsening of financial indicators of the health of Ukraine’s financial system as measured by government bond yields and the trading of credit default swaps, as well as the country’s economic downturn, go along with a decline of local banks’ credit ratings.