• The Journal of Asian Finance, Economics and Business
• /
• v.9 no.6
• /
• pp.105-114
• /
• 2022

With the help of this study, we aim to investigate the influence of Financial Distress (FD) and information and communication technology (ICT) on the operating performance and efficiency of banks in the Indian banking sector. FD can be defined as a position in which a company or individual is not in a condition to fulfill their promise of paying their obligations on time. The term "financial distress" refers to a situation in which a corporation or individual is unable to keep their promise of paying their debts on time. In this work, panel data analysis (PDA) was used to analyze data from 33 Indian banks over ten years (2010 to 2019). According to the findings, FD has a positive and significant impact on bank operational performance and efficiency. The current study will give the banking industry a better understanding of how a bank's performance can be negatively impacted by distressing conditions that render it inefficient and ineffective. Second, it will show investors how the level of distress can have a significant impact on bank performance in the market, finally resulting in the loss of money invested.

• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.12
• /
• pp.721-730
• /
• 2020

This study investigates the impact of the country's governance on the revenue efficiency of 108 Islamic banks from 26 countries offering Islamic banking and finance products services. The technical efficiencies of individual Islamic banks have been analyzed using the Data Envelopment Analysis method. The data will be pooled across the selected countries and utilize the intermediation approach. The Ordinary Least Square estimation method is employed to examine the impact of country supervision and regulation on the technical efficiency of Islamic banks. As robustness check, the study examines the impact of the level of bank regulations and supervision on the efficiency of Islamic banks operating in different income-level countries. The results found that the stricter the supervisory power, the less strict capital requirement, the tighter the restrictions on non-banking activities, and the stricter the private monitoring enhance statistically significantly the level of efficiency of Islamic banks. In upgrading the regulations and supervision of the Islamic banks, the existing regulatory framework based on the Basel Committee on Banking Supervision (BCBS) must be complemented with the prescriptions on Islamic banking or Shariah compliance diligently, so that the Islamic banks could be regulated accurately and further improve the technical efficiency of their operations.

• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.7
• /
• pp.349-360
• /
• 2020

The study aims to empirically examine the determinants of bank margins from Pakistan, an emerging South Asian economy. To elucidate the importance of the Pakistani banking sector, secondary data has been used, which was extracted from the annual accounts of twenty-four Pakistani scheduled commercial banks (20 conventional, four full-fledged Islamic) over a sample period of 2006 to 2017. The factors identified in the dealership model and the subsequent empirical developments in the dealership model categorized as bank-specific, diversification, regulatory, and industry concentration are analyzed by applying the most-common linear dynamic panel-data estimator, the Generalized Method of Moments (GMM) estimator, developed by Arellano and Bond (1991). The findings reveal that, among the bank-specific variables, funding cost, credit risk, managerial efficiency, market share, and operating cost are significant predictors of bank margins. For diversification variables employed in the study, both variables including net non-interest income and asset diversity are as well significant predictors of bank margins. It is also found that the market concentration variable proxied by the Herfindahl-Hirschman Index (HHI) is significantly predicting bank margins. Subsequently, one of the regulatory variables, the opportunity cost of holding reserves, and one bank-specific variable, the degree of risk aversion, are insignificant in the model.

• Journal of Korean Society of Industrial and Systems Engineering
• /
• v.40 no.3
• /
• pp.7-17
• /
• 2017

Loan consultants assist clients with loan application processing and loan decisions. Their duties may include contacting people to ask if they want a loan, meeting with loan applicants and explaining different loan options. We studied the efficiency of service quality of loan consultants contracted to a bank in Korea. They do not work as a team, but do work independently. Since he/she is not an employee of the bank, the consultant is paid solely in proportion to how much he/she sell loans. In this study, a consultant is considered as a decision making unit (DMU) in the DEA (Data Envelopment Analysis) model. We use a principal component analysis-data envelopment analysis (PCA-DEA) model integrated with Shannon's Entropy to evaluate quality efficiency of the consultants. We adopt a three-stage process to calculate the efficiency of service quality of the consultants. In the first stage, we use PCA to obtain 6 synthetic indicators, including 4 input indicators and 2 output indicators, from survey results in which questionnaire items are constructed on the basis of SERVQUAL model. In the second stage, 3 DEA models allowing negative values are used to calculate the relative efficiency of each DMU. In the third stage, the weight of each result is calculated on the basis of Shannon's Entropy theory, and then we generate a comprehensive efficiency score using it. An example illustrates the proposed process of evaluating the relative quality efficiency of the loan consultants and how to use the efficiency to improve the service quality of the consultants.

• Asia-Pacific Journal of Business
• /
• v.6 no.2
• /
• pp.1-17
• /
• 2015

This study compares the most widely used parametric and non-parametric techniques to measure cost and profit efficiency of banks, namely the Stochastic Frontier Analysis (SFA) and Data Envelopment Analysis (DEA). We formulate the specification form of both stochastic cost and profit frontier models and constant return to scale Cost DEA and Profit DEA models and provide an empirical assessment of the cost and profit frontiers based on a panel dataset of National Commercial Banks (NCBs) and Private Banks (PBs) in Bangladesh over the 2001-2010 period. The cost inefficiency and profit efficiency are slightly higher for PBs than NCBs in case of both SFA and DEA. The coefficients of advance and off-balance sheet items are significant that positively influence the banks in stochastic cost frontier model while the advance, other earning assets, price of borrowed fund are significant and negative effects on the banks in stochastic profit frontier model. The average cost inefficiency and average profit efficiency are recorded with 16.3% and 91% respectively. The highest and lowest cost inefficiency are observed for Janata Bank and United Commercial Bank Limited whilst the highest and lowest profit efficiency are recorded for Eastern Bank Limited and Janata Bank respectively. The average technical and allocative efficiency are 68.8% and 35.9%, respectively in case of CRS cost-DEA model whereas they are 70.3% and 31.8% in case of CRS profit-DEA model. The average cost inefficiency is recorded 6.3% by SFA whereas it is 24.5% by DEA. The average profit efficiency is found 91% by SFA while it is 22.1% by DEA, and SFA method shows better bank efficiency than DEA.

• The Journal of Asian Finance, Economics and Business
• /
• v.9 no.3
• /
• pp.347-354
• /
• 2022

This article examines the influence of Basel III reforms, risk management, and banking sector efficiency on banks' financial stability in emerging countries. The data for this study is collected from various sources. Based on the GDP classification of IMF, the top 22 countries were selected as the sample. The sampling frame includes all six regions of the world including 482 banks and 3022 observations in total. The empirical analysis is carried out by estimating the random effects models. It is found that the effects of capital buffer, liquidity, and risk management practices are significant on financial stability. It is also noticed that the capital buffer has a constructive and significant influence on financial stability. However, liquidity management shows a mixed impact, as in some countries, its impact is positive and significant while, in other countries, it is insignificant. Risk management practices have an overall positive influence on financial stability in the case of large economies. However, results are insignificant in the case of small economies. Bank-specific variables, namely profitability, size, and efficiency have a positive whereas, loan quality has a negative impact on financial stability in the emerging countries. GDP has a positive impact on financial stability whereas inflation and unemployment both have a negative effect on financial stability.

• Asia-Pacific Journal of Business
• /
• v.9 no.1
• /
• pp.57-76
• /
• 2018

This paper studies the influence of the bilateral expansion of Korean and Chinese banks on performance. To conduct the empirical analysis, we select eleven Banks in South Korea and thirteen Banks in China over the 2000-2014 time frame. The main regression results are as followed. First, the sample bank's overseas subsidiaries have a significant effect on profitability and the profitability is somewhat deteriorates. Second, the sample bank's overseas branch and subsidiaries have a significant effect on the bank's risk. That is, the loan loss provision ratio is slightly increased but impaired loan ratio is highly decreased. Third, the sample banks' overseas branch and subsidiaries also have a significant effect on bank efficiency. The ratio of customer deposits per employee worsens somewhat but the gross loan per employee are increased. In conclusion, as time passes, bank profitability or efficiency from mutual expansion of Korean banks and Chinese banks seem to be improving somewhat, and this phenomenon is more prominent at Korean banks than at Chinese banks.

• International Area Studies Review
• /
• v.12 no.2
• /
• pp.79-97
• /
• 2008

After entering into the WTO in October, 2001, China started opening her bank industry on a full scale and her financial markets from the end of 2006. It is true that the Chinese commercial banks should make efforts to enhance their operational efficiency for adapting the rapid change of financial environments. In this paper, the efficiency of 4 Chinese state-owned commercial banks and 11 share holding commercial banks has been estimated. Our Tobit model to find out the determinants of these banks' efficiency. The results are as follows: The efficiency of these banks kept being improved from 1999 to 2003. With regard to the relationship between the determinants and the bank efficiency, their capital ratios, ownership structures and government subsidies are significant at the 5% level while the return on asset(ROA) is significant at the 10% level. The relationship between the determinants and the efficiency has showed that the size, capital ratios, ROA and ownership structure showed significantly before the entry to WTO, on the other hand, after WTO their capital ratios are the only factor to determine their efficiencies.

• Journal of Korea Society of Digital Industry and Information Management
• /
• v.15 no.3
• /
• pp.197-206
• /
• 2019

Telemarketing has been used in finance due to the reduction of offline channels. In order to select telemarketing target customers, various machine learning techniques have emerged to maximize the effect of minimum cost. However, there are problems that the class imbalance, which the number of marketing success customers is smaller than the number of failed customers, and the recall rate is lower than accuracy. In this paper, we propose a method that solve the imbalanced class problem and increase the recall rate to improve the efficiency. The hybrid sampling method is applied to balance the data in the class, and the stacked deep network is applied to improve the recall and precision as well as the accuracy. The proposed method is applied to actual bank telemarketing data. As a result of the comparison experiment, the accuracy, the recall, and the precision is improved higher than that of the conventional methods.

• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.7
• /
• pp.439-451
• /
• 2020

This study focused on researching the factors affecting retail banking efficiency of Vietcombank branches in the Mekong-Delta region. By collecting data from financial statements from 15 branches of VCB in the Mekong-Delta Region between 2015 and 2018, the paper applies DEA estimation to measure the effectiveness of retail banking activities and uses the Tobit regression model to identify factors affecting retail banking efficiency. The results demonstrate that the retail banking efficiency of branches averaged 52.5% during the period. The rating result shows the branches in An Giang, Can Tho, Dong Thap, Kien Giang, Long An, Phu Quoc and Tra Noc rank at the top technical efficiency. In group of medium efficiency, there are branches in Soc Trang, Tien Giang and Vinh Long. In the category of the poor efficiency are the branches in Bac Lieu, Ben Tre, Ca Mau, Chau Doc and Tra Vinh. The results also show that bank scale-related factors, capital adequacy, credit quality, time specific and region impact significantly the retail banking efficiency. The research not, only contributes to enriching the empirical research method but also is significant for the management activities in business developing strategies, improving the operational efficiency of Vietcombank in the region.