• KDI Journal of Economic Policy
• /
• v.38 no.1
• /
• pp.53-70
• /
• 2016

This paper examines market concentration and its effect on competition in the Chinese commercial banking market. This study also investigates how changes in competition have affected the financial stability of Chinese commercial banks. To test the competitive conditions, we obtained the H statistic of the Panzar-Rosse model from a revenue function equation. The degree of financial stability is estimated by the Z-score formula. The Chinese banking industry has become an increasingly less concentrated market with an increased number of banks. Along with a decreased market concentration, competition in the Chinese banking industry has improved moderately. However, its market structure is still far from a competitive market. An individual bank's ability to earn higher markup or charge a higher net interest margin contributes to its financial soundness, although a higher degree of market concentration may have negative effect on the financial stability of the entire banking system.

• The Journal of Asian Finance, Economics and Business
• /
• v.10 no.1
• /
• pp.1-8
• /
• 2023

The banking industry regulators have imposed on commercial banks to maintain a certain level of liquidity to ensure that they can meet their obligations to the depositors and third parties. This study examines the factors influencing liquidity creation among commercial banks in Uzbekistan. Specifically, this study examines three internal factors namely, risk assets, deposits, and inter-bank loans on the creation of liquidity in commercial banks of Uzbekistan. This study uses content analysis on financial reports of 33 commercial banks in Uzbekistan over 21 years. This study shows all the factors chosen in this study significantly influence liquidity creation among the commercial banks in Uzbekistan. While deposits and inter-bank loans significantly and positively influence liquidity creation, this study shows that risk assets significantly and negatively influence liquidity creation. Further analysis shows that these three factors contribute to a 92.4% variance in liquidity creation among commercial banks in Uzbekistan. The findings of this study provide valuable insights to the stakeholders in the banking industry on the factors influencing liquidity creation in banks. In addition, this study adds to the existing literature by providing insight into the internal factors' role in influencing liquidity creation in the context of an emerging economy.

• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.11
• /
• pp.219-229
• /
• 2020

The study investigates the factors affecting the profitability of listed commercial banks in Vietnam. Survey data for this research were collected from 10 Vietnamese listed commercial banks for the period from 2008 to 2018. In the study, we have built a model of econometric regression with the dependent variable being listed commercial banks' profitability results measured through ROA. The research methods used include descriptive statistics, IV regression and OLS regression analysis, and the authors carried out the model verification with Stata 14 software. The results showed that operating efficiency, loans size, retail loans ratio, state ownership, inflation rate, and GDP growth are factors that have a positive impact on profitability On the other hand, variables such as capital size, credit risk, liquidity risk, bank size, and revenue diversification are statistically insignificant; hence, these variables are not statistically adequate to indicate the influence of those independent variables to banks' profitability. The findings of this study suggest that the quality of assets should be considered in the context that bad debt risks come from lending heavily to the real estate sector. Meeting Basel II's capital compliance requirements is relatively difficult for small listed commercial banks compared to bigger listed commercial banks in Vietnam.

• The Journal of Asian Finance, Economics and Business
• /
• v.8 no.3
• /
• pp.319-329
• /
• 2021

The study examines the impact of bank-level factors like non-performing assets, capital adequacy, and insolvency risk on bank performance. This study employs a quantitative method with panel data regression. The data was taken from the annual financial statements of state-owned commercial banks and private commercial banks in Indonesia from 2015 to 2019 using a purposive sampling method with a total sample of 470 observations. The result of the study shows that non-performing assets (NPA) have a significant negative impact on bank performance. Capital adequacy has a significant negative impact on bank performance. Insolvency risk for a bank means it cannot repay its depositors because its liabilities are greater than its assets; therefore, it has a significant impact on bank performance. This study is expected to help banks to understand how to manage the risks they face and to maintain their performance. This study uses 'size' and 'age of bank' as control variables and for credit risk and insolvency risk, Z-Score is used.

• The Journal of Asian Finance, Economics and Business
• /
• v.9 no.6
• /
• pp.23-32
• /
• 2022

This paper examines the effects of regulatory capital on a bank's profitability and risk. We employ annual data from Vietnamese commercial banks from 2005 to 2020 and use the dynamic GMM regression method to address the potential endogeneity issue, more suitable for panel data with relatively low time dimensions. Our panel regressions indicate that higher regulatory capital would significantly improve the bank's profitability and lower the bank risks. In particular, a one percent increase in the regulatory capital would significantly increase the bank's return on assets by 1.9%. We further explore the heterogeneous impacts of regulatory capital on the Vietnamese bank's performance across bank characteristics. We find that smaller, non-state-owned and non-listed banks would benefit from stringent regulatory capital requirements. The improvements in bank performance are mainly driven by reductions in the risk premium of the banks, resulting in lower funding costs and higher profitability. These findings are essential since Vietnam, as an emerging market, has only implemented the Basel II reform recently on a stable and fast-growing background rather than as a reaction to the global financial crisis. Thus, our empirical results support stringent regulatory capital in emerging countries to ensure a stable banking sector and boost economic growth.

• The Journal of Asian Finance, Economics and Business
• /
• v.8 no.4
• /
• pp.709-716
• /
• 2021

The main objective of this research is to find out the effect of Non-Performing Loan (NPL) of Nepalese conventional banks. The population of this study is major commercial banks in Nepal and the data obtained for this study was from the period 2015-2019. This research used secondary data and it is collected from each bank's annual report and GDP and Inflation taken from the World Bank database. The method used for data analysis in this study is multiple regression analysis. The study used NPL as a dependent variable and Return on Asset (ROA), Capital Adequacy Ratio (CAR), Bank Size, GDP growth, and Inflation as independent/explanatory variables. The result of this research shows that ROA, Bank Size, GDP, and Inflation have a significant effect on NPL but CAR does not have a significant effect on the NPL of banks. In other words, the GDP effect on NPL in this study shows a positive and significant effect while most studies show a negative effect. It demonstrates that when GDP growth increases, there is a significant increase in the growth of Nepalese banks even though there were no significant changes in income growth. Therefore, GDP growth has a positive and significant effect on the NPL of commercial banks. Thus, the bankers and policymakers need to consider GDP growth carefully while taking NPL-related decisions.

• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.11
• /
• pp.647-656
• /
• 2020

This study empirically examines the effect of ownership structure on bank diversification and risk-taking behavior. The population of this study is based on all commercial banks listed in Bangladesh. Thirty-two conventional commercial banks were randomly selected from thirty-three conventional banks for this study. Data was collected from the annual reports of the concerned banks from 2000 to 2017. To analyze the data, we had applied the two-stage least squares (2SLS) estimator. The results of the analysis show that ownership structure i.e. managerial ownership, institutional ownership, general public ownership, and ownership concentration have a significant negative impact on bank diversification. On the other hand, institutional ownership, managerial ownership, and general public ownership have a significant positive impact on Z-score, and ownership concentration has an insignificant but positive impact on the Z-score of banks in Bangladesh. Therefore, the study opposes the benefits of diversification and promotes ownership structure which is capable of ensuring better financial stability by reducing the probability of risk. The policy-makers especially, Bangladesh banks should evaluate the fact of this study to issue guidelines on corporate governance, bank diversification, and risk-taking behavior of commercial banks.

• The Journal of the Convergence on Culture Technology
• /
• v.7 no.1
• /
• pp.511-517
• /
• 2021

In this paper, we analyzed the impact of capital adequacy requirements on the profitability of Korean banks using DOLS model. As a result of the analysis, the impact of BIS capital ratios on commercial and regional banks was different. Demand for capital adequacy has a greater and more significant negative impact on regional banks than on commercial banks. It was shown that bank characteristic variables rather than macroeconomic variables have a more significant effect on bank profitability. In addition, a rise in the BIS capital ratio reduces the profitability of commercial and regional banks, and the higher the ratio of loan-loss provisions, the stronger the relationship. In the case of commercial banks, it is estimated that the demand for capital adequacy did not have a significant impact as they are relatively large and faithful in capital compared to regional banks. However, in the case of regional banks, safer assets need to be selected to meet the BIS capital ratio, and the increasing propotion of these safe assets seems to have a relatively greater negative impact on profitability. Consequency, the financial authorities should consider this results and implement the bank's capital regulation policy.

• Knowledge Management Research
• /
• v.9 no.1
• /
• pp.97-116
• /
• 2008

The purpose of this study lies in examining how knowledge management was applied to PMI(Post Merger Integration) in bank merger. Individuals and organizations in Korea have experienced a lot of changes since the 1997 foreign exchange crisis. In such a situation, individuals came to think the only thing to rely on was personal knowledge. Since organizations had to lay off workers in order of their birth year, not based on whether or not individuals had the knowledge necessary for the organizations, they needed to have such a system that could use their explicit knowledge and even outside knowledge or customers' knowledge as IT developed by changing individuals' tacit knowledge into explicit knowledge as needed in order to continue to maintain their competitiveness and for their own development. Thus, each firm started to pitch for the introduction of knowledge management. Individuals started to store their own experience and knowledge in their homepages or blogs. It was Woori Bank, the merged bank of Hanil Bank and Commercial Bank of Korea, that introduced the knowledge management system and Shared Service Center, in which knowledge creation is available, for the first time in the banking business. Its previous name was Hanbit Bank. Hanbit Bank wanted to construct an advanced bank system, bringing in their chief information officer(CIO) from a foreign bank and introducing an IT software used in Spanish banks to adjust all banking processes to it. However, they could not help giving up the plan in the middle of the road since there was a great difference between Spain and Korea in the financial system and more than 30% of software package had to be changed. In this situation, PMI was delayed, and customer inconvenience continued, which made the integration of organizational cultures slow down. As a breakthrough in this situation, knowledge management was introduced. To integrate knowledge of two organizations in the process of PMI is an important job for all merger candidates. This study aims at presenting the successful results from using knowledge management as a means to PMI ahead of other financial institutions so they can apply them to their organizations. PMI was not achieved properly after the two banks had been merged as Hanbit, but entering the era of Woori Bank, workers were integrated under one standard organization following the organizational and knowledge integration, and knowledge management was introduced for an efficient sharing of knowledge among members. A great number of mergers have occurred up to now, but Woori Bank is the first case that used knowledge management as a means to both PMI and competitiveness enhancement. Probably it was an appropriate time when Woori Bank introduced knowledge management as it was organized. Since Hanil Bank and Commercial Bank of Korea had not introduced knowledge management until then, it could use knowledge management as a means to PMI. Using knowledge management, it could create a new organizational culture and increase competitiveness in the banking industry.

• The Journal of Asian Finance, Economics and Business
• /
• v.8 no.10
• /
• pp.327-339
• /
• 2021

This study examines the impact of bank restructuring on the financial performance of commercial banks in Vietnam. The data for this study was obtained from the audited financial statements of 30 Vietnamese commercial banks from 2007 to 2019. Multiple regression analysis was used for investigation. Financial performance, as evaluated by ROAA, ROEA, and NIM, is the dependent variable. Financial restructuring, ownership restructuring, and operational restructuring are the independent variables. Pooled least squares (Pooled OLS), fixed effects model (FEM), random effects model (REM), and system generalized moment regression model (System GMM) are the estimate methods used to increase the accuracy of the regression coefficient. The research results show that the variables of financial restructuring activities such as government intervention and the ratio of equity to total assets; variables of ownership restructuring such as capital adequacy ratio, privatization of state-owned commercial banks, mergers, and acquisitions; variables of operational restructuring such as employees, branches, the cost to total assets; GDP variables and the second restructuring period have a positive impact on financial performance. Variables such as debt-to-capital ratio, bad debt ratio, state ownership ratio, expense-income ratio, and inflation have a negative effect on financial performance.