• The Journal of the Convergence on Culture Technology
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• v.5 no.4
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• pp.277-282
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• 2019

This study analyzed the determinants of the financial Soundness of savings banks. In particular, empirical analysis was carried out on how the loan deposit ratio correlates with financial soundness after restructuring. As the restructuring of savings banks was finalized in 2014, asset management changed and it is time to analyze the financial characteristics of savings banks. In summary, the relationship between the savings bank lending rate and the NPL ratio is estimated to have a negative value at the 1% significance level. In other words, the higher the mortgage rate, the lower the substandard and below ratio. It can be said that it is not easy for a savings bank to build an aggressive loan portfolio. In other words, the more difficult it is to finance loans through savings deposits, the more likely the risk aversion tends to be. The higher the corporate loan ratio, average interest expense, and economic growth rate, the higher the risk index. The larger the asset size and the higher the loan growth rate, the lower the risk index. Increasing the mortgage rate may reduce risk-seeking behavior, but it does not mean that it is unconditionally positive for savings banks. Therefore, the loan deposit rate regulation should reduce the incentives for excessive asset expansion and manage preemptive soundness through lending portfolio management.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.3
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• pp.127-135
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• 2020

The paper aims to examine whether business cycles affect the link between financial development and bank risk, measured by Zscore and non-performing loans to total loans in six Southeast Asian countries, namely Indonesia, Philippines, Malaysia, Singapore, Thailand and Vietnam. This study uses a sample of 95 listed commercial banks over a 15-year period between 2004 and 2018 in the six Southeast Asian countries. This study employs panel OLS regression and modifications to tackle issues such as endogeneity and heteroscedasticity. The results show that the impact of stock market development (the ratio of the market capitalization to GDP) on Zscore is significantly positive, whereas its effect on non-performing loans is significantly negative. The findings suggest that financial development, in terms of stock market capitalization, improves banks' Zscores and reduces their level of non-performing loans, suggesting that financial development on average reduces bank risk. The impact of business cycle is insignificant towards bank risk, thus rejecting both counter- and pro-cyclical hypotheses, except for the case of risk indicator of loan loss provisions. Examining the joint effect of the business cycle and financial development on bank risk, we find that the phase of business cycles generally does not moderate the link between financial development and bank risk.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.9
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• pp.371-376
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• 2020

The study seeks to explore the factors affecting the access to credits by individual customers at commercial banks in Tra Vinh province, Vietnam. Based on these results, the author proposes solutions to further improve the ability to serve individual customers at commercial banks in the province in the future. The study was conducted with a method of collecting primary data of 300 individual customers including 150 people with access to credits and 150 people without accessing to credits at six commercial banks in Tra Vinh Province, Viet Nam - Bank of Agriculture and Rural Development, Bank for Foreign Trade Commercial Bank, Bank for Investment and Development of Vietnam, Asia Commercial Bank in Tra Vinh, Sai Gon Commercial Joint Stock Bank, and Bank of East Asia. The author has used binary regression methods, and the study found that seven factors affecting the ability of individual customers to access capital, namely, career, qualifications, collaterals, incomes, documents, loan and business plans, and experience. In particular, occupation, experience, and documents are the most influential factors. From the above results, the author proposes policy implications to improve individual customers' access to credits at commercial banks in Tra Vinh province in the near future.

• The Journal of the Korea Contents Association
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• v.10 no.2
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• pp.361-371
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• 2010

This paper analyses the information contents of the trade credit in Korea. Trade credit is not only a settlement device in business cycle but also an information messenger in the financial market with an asymmetric information. The empirical results support that in addition to the bank loan, trade credit takes a significant role in that it provide a cheap and reliable credit to firms that have financial difficulties because of the information problem.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.9
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• pp.229-239
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• 2020

This paper examines the impact of gender on access to debt finance among Vietnamese enterprises. The paper investigates data and variables retrieved from the World Bank Enterprise Survey dataset using five Probit models. The regression results suggest that there exist more unfavourable debt financing conditions for women-led firms (WLF), measured as a lower probability of having loan applications fully approved. Firm's age, working sector, and perception of access to finance as a difficulty are found to have explanatory power on the discrimination. More importantly, the perception of debt finance as a difficulty or firms' level of confidence significantly explains the variance of the dependent variable of probability of loan approval, or gender effect would be more pronounced if the firm already has a low level of confidence. The paper also contributes in testing for the gender effect on Vietnamese enterprises from different sectors and scale, unlike other prior research papers focusing on specific sectors and/or small and medium enterprises only. The findings are highly useful for Vietnamese credit institutions to set out a specific business policy to attract more WLFs and help promoting gender equality in the working environment, especially in debt financing, which is often neglected in existing regulation and policy frameworks.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.5
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• pp.829-837
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• 2021

The study investigates the impact of the Counter-Cyclical Buffer Policy (CCB) on regional development bank profitability in Sumatra, Indonesia. CCB requires banks to hold capital at times when credit is growing rapidly so that the buffer can be reduced if the financial cycle turns down or the economic and financial environment becomes substantially worse. This study employs time series data of regional development banks (RDBs) in Sumatra Island, Indonesia. The methodology applied in this study is a panel dynamic model with Generalized Methods of Moments (GMM). The results show that increasing capital through the implementation of CCB did not have a significant effect on RDBs' profitability. The findings of this study suggest that the activation and implementation of CCB lead to an increase in the amount and cost of loans to companies but do not affect the profitability of RDBs. The value of a Non-Performing Loan (NPL) proved to have a negative and significant effect on bank profitability. The CCB policy aims to overcome the pro-cyclicality of credit growth and improve bank resilience through increased capital which is expected to reduce excessive credit growth as a source of systemic risk. This causes a lack of lending to the community so that the profits obtained by the bank decrease.

• Journal of Distribution Science
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• v.20 no.9
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• pp.23-28
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• 2022

Purpose: Research on banking sustainability plays an important role in helping banks understand the level of risk in different types of companies. Therefore, this study was conducted to determine the factors affecting the sustainability of Joint Stock Commercia l Banks in Vietnam. Research design, data and methodology: The following theories, the factors affecting the bank's sustainability include: Business model diversification (income diversification), bank size, loan ratio, and net interest margin. Data was collected from Joint Stock Commercial banks in Vietnam from 2015 to 2019. With GLS model on panel data with banks listed on Vietnam stock exchange. Results: The analysis results show that net interest income has a positive impact on the sustainable business results of banks through the rate of return on total assets (ROA). The non-interest income hasn't impact on bank stability. From this result, there aren't positive signs of income diversification in banks. At the same time, with the obtained results, the study also provides a policy implication for banks. Conclusions: The study also provides some policy implications to improve the bank stability. Diversifying income in banks is necessary, but how to make it influential banks has not yet been done. Therefore, the adjustments in non-interest business activities need to be carefully considered by banks.

• The Journal of the Korea Contents Association
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• v.5 no.1
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• pp.109-116
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• 2005

This paper is to develop the prototype of a decision making for loan granting system at banks and to evaluate the effectiveness of it. The prototype is called at FENET-LG in this paper. The decision to grant a loan is an unstructured and vagueness task because it is required a tremendous amount of data and many complex relationships among them. Evaluating these many data and relationships is a difficult task even for most experienced decision maker of bank. Therefore, where complex judgement is required, the decision maker of bank may benefit from the use of fuzzy expert network to support the evaluation of ability to pay back. Given the characteristics of decision maker of banking facilities judgement task about ability to pay back, the prototype system named FENET-LG is constructed by integration of fuzzy expert system and neural network. The FENET-LG takes advantage of both the deductive approach of fuzzy expert system and the inductive approach of a neural network to provide a decision aid designed to support and facilitate the process of conducting a judgement of ability to pay back.

• Asia Marketing Journal
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• v.12 no.3
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• pp.43-62
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• 2010

The notion of customer orientation is now importantly considered in the context of banking industries. Despite customer-oriented organizational cultures, there are few studies addressing the relationship between customer orientation and its outcomes. In particular, this study aims at testing the effect of customer orientation as a key marketing effort designed by a bank. This is because interest rate sensitivity is critical for evaluating banking services after raising the base rate. In so doing, first, this study investigates the relationships among customer orientation, interest rate sensitivity, and customer loyalty. Second, this paper examines how the moderating effects of both deposit interest and loan interest rates influence the linkages of customer orientation-interest rate sensitivity and customer orientation-customer loyalty. To test the proposed model, research data are collected from 304 subjects who use banking services(e.g., Shin-Han, Kookmin, the First Bank, Hana, and Woori banks). Each construct was measured by published items and the psychometric properties of the three constructs, excluding two constructs of the moderators, were evaluated by employing the method of confirmatory factor analysis via the use of AMOS. The model fit was also evaluated using the CFI, TLI, and RMSEA fit indices that are recommended based on their relative stability and insensitivity to sample size. The findings show that the relationship between customer orientation and customer loyalty is significant, whereas the relationships between customer orientation and interest rate sensitivity and between interest rate sensitivity and customer loyalty are not supported. Although customer orientation is highly evaluated, customers' interest rate sensitivity that results in the comparison of interest rates plays an important role in reducing the effect of customer orientation. As a consequence, interest rate sensitivity does not influence customer loyalty. First of all, one of interesting results in this study is that the moderating effect of loan interest rate is quite different from deposit interest rate. In the case of deposit interest rate, the linkages both customer orientation-interest rate sensitivity and customer orientation-customer loyalty are insignificant. In the case of loan interest rate, however, the two proposed linkages are supported. As our proposed relationships are still in its infancy in the context of banking industry, our study contributes to enhance scholars' knowledge of bank services and provides insights for practitioners when their marketing strategies, particularly both deposit and interest rates, have to be established. Finally, this research also illuminates the need for further research that considers the influence of customer orientation on consumer's decision-making and bank profits. More specifically, the results are encouraging and will lead us to further investigate this key outcome of the banking deposit/interest rates.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.11 no.4
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• pp.1419-1429
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• 2010

Industry structure and environment of the domestic bank have been changed by an influx of large foreign-banks and advanced financial products when the currency crisis erupted in Korea. In a competitive environment, accurate forecasts of changes and tendencies are essential for the survival and development. Forecast of whether to approve loan applications for customer or not is an important matter because that is related to profit generation and risk management on the bank. Therefore, this paper proposes the method to improve forecast accuracy of loan underwriting. Processes in experiments are as follows. First, we select the predictor variables which affect significantly to the result of loan underwriting by correlation analysis and feature selection technique, and then cluster the customers by the 2-Step clustering technique based on selected variables. Second, we find the most accurate forecasting model for each clustering by applying LR, NN and SVM. Finally, we compare the forecasting accuracy of the proposed method with the forecasting accuracy of existing application way.