Effect of capital adequacy on banks profitability

This research aims to examine the effect of Third Party Funds (TPF), Interest Rates (IR), Bank Capital, and Non-Performing Loan (NPL) towards Credit Distribution on commercial banks in Indonesia with period 2012-2018. This research using 84 monthly data of commercial banks in Indonesia period 2012-2018. This research uses the Error Correction Model (ECM) analysis and E-views 10 analysis tools. The result of the research shows that in the long term, Third Party Funds, Interest Rates, Bank Capital, and Non-Performing Loan affects Credit Distribution. In the short term, Third Party Funds and Non-Performing Loan affect Credit Distribution. Meanwhile, Bank Capital and Interest Rates have no effect on Credit Distribution on commercial banks in Indonesia. Simultaneously on the long term and short term all variables (Third Party Funds, Interest Rates, Bank Capital, and Non-Performing Loan) have an effect on Credit Distribution on conventional commercial banks in Indonesia period 2012-2018.

A well-developed and financially strong banking sector is the backbone of the economic development of any nation. Banks mobilize the savingsof the public by accepting deposits and disburse credit according to socio-economic priorities of the country. Banks and financial institutions provide financial assistance in the form of advances to agricultural and industrial units, MSMEs and service sector, to run their businesses efficiently and to contribute in the economic development. It took almost 3-4 years for banks to come out of the 2008 financial crisis that happened in the world economy and still, banks are facing issues like non-performing assets, which not only reduced the profitability of banks but also affect their smooth operations and goodwill. A drastic increase in NPAs is happening in public sector banks of India. Public sector banks are ruling the banking sector in concern of net worth, which is 70 percent of the banking system of India. In the mid of September 2018 gross ...

Capital as an important factor of production must be sufficient in business for effective operation of an organization.  Bank is one of these organizations whose capital adequacy is of paramount significance to its customers. The Central Bank of Nigeria has the obligation to provide protection and confer confidence on all the banks’ depositors and creditors by ensuring banks’ capital adequacy to absorb their looses and financial short comings.  This is the main reason behind the new bank reform which emphasized that banks’ capital base should be increased from N2billion to N25billion for effective performance.  The researchers were more concerned on finding out the effect of the new banks’ recapitalization for capital adequacy can improve bank performance.  Secondary data was used for this research.  Data collected were analyzed with regression analysis and recommendations were made based on the results of the analysis for policy making.



Key Words: Capital, Capital Adequacy and Bank Performance.

This study examines the impact of capital structure on profitability in the UK banking industry from 2002 to 2012, focusing on six major banks: Santander, Barclays, HSBC, Lloyds, RBS, and Standard Chartered. Utilizing panel data and applying both Ordinary Least Squares (OLS) and Generalized Least Squares (GLS) methods, the research explores how debt to equity (DE), debt to assets (DA), and capital adequacy ratio (CAR) influence return on equity (ROE) and return on assets (ROA). The findings reveal that higher DE and DA ratios positively affect profitability, indicating the benefits of leveraging debt. Conversely, a higher CAR is associated with lower profitability, highlighting the trade-off between financial stability and returns. Additionally, the study considers the impact of bank size, operating efficiency, inflation, and economic growth on profitability. The results provide valuable insights into the strategic management of capital structure in the banking sector, emphasizing the need to balance leverage and capital adequacy to optimize performance while maintaining stability. This research contributes to the broader understanding of capital structure dynamics and offers practical implications for bank management and regulatory policies.

In the present study the meaning, importance and significance of Non-Performing Assets (NPAs) have been discussed with the eye towards the recent scenario (2000-2013) of the Indian banking sector. The causes for the high growth rate of NPAs have been brought up pointing out that the major bank-group always responsible for such is the Public Sector Banks and more specifically the Priority Sector has been its main contributor, while for the last two years Non-Priority Sector has taken the top place in raising the levels. The impacts of NPAs are deep and forward-looking. It has been found to have a one-to-one effect on the profitability of the Scheduled Commercial Banks (SCBs) of India, according to the data. Its trend in the SCBs has been examined and found to be decreasing till 2007 and rapidly increasing after that due to high credit expansion.

Supervisor - Dr. Mausumi Manna, Associate Professor, Department of Economics, Scottish Church College, University of Calcutta.

Profit is the main concern to start out any business organization. Like all other businesses, banks are also run with the motive of earning profit. Banks are indulged with the activity of deposits and borrowings. Non-Performing Assets are those part of assets that are associated with the bank's borrowing activities. A high NPAs indicates that the number of credit defaulters is high in a particular bank which directly affects the profitability, liquidity, and solvency of that bank and also disservice the value of assets. The problem of NPAs does not only affect the banking sector but also the economy of a concerned country. A high NPAs is a direct indication of the poor financial health of a concerned bank. The Indian banking sector is facing the higher NPAs problem for a decade now. The magnitude of NPAs is relatively high within the public sector banks. To strengthen the profitability and efficiency of the banking system the level of NPAs needs to be lower down and controlled. This paper touches upon the meaning and therefore the definition of a non-performing asset, the conceptual framework of non-performing assets, classification of loan assets and provisions. This paper would evaluate the adverse effect of non-performing assets on the return on total assets of Punjab National Bank Limited for the period2013 to 2015, 2016-17, and 2019-20.
Keywords: Non-Performing Advance, Economy Development, Lending, Prudential Norms, Return on Total Assets, Banking Sector.

A well-developed and financially strong banking sector is the backbone of the economic development of any nation. Banks mobilize the savings of the public by accepting deposits and disburse credit according to socio-economic priorities of the country. Banks and financial institutions provide financial assistance in the form of advances to agricultural and industrial units, MSMEs and service sector, to run their businesses efficiently and to contribute in the economic development. It took almost 3-4 years for banks to come out of the 2008 financial crisis that happened in the world economy and still, banks are facing issues like non-performing assets, which not only reduced the profitability of banks but also affect their smooth operations and goodwill. A drastic increase in NPAs is happening in public sector banks of India. Public sector banks are ruling the banking sector in concern of net worth, which is 70 percent of the banking system of India. In the mid of September 2018 gross NPAs of SCBs crosses the limit of nine lakh crores out of which 90% NPAs were in the public sector banks. State Bank of India and Punjab National Bank are leading in that. Although, Reserve Bank of India and banks themselves have taken numerous steps to solve the NPAs problem but it is still alarming in the Indian economy.
The paper touches upon the meaning and definition of non-performing assets, types and classification of NPAs, causes of NPAs and impact of NPAs on turnover ratios of Punjab National Bank Limited. This paper would analyze the impact of NPAs on the turnover ratios of Punjab National Bank Limited.

This review paper fits in the context of the adequate matching of training to employment, which is one of the main challenges that universities around the world strive to meet. In higher education, the revision of curricula necessitates a return to the skills required by the labor market to train skilled labors. In this research, we started with the presentation of the conceptual framework. Then we quoted different currents that discussed the problematic of the job training match from various perspectives. We proceeded to choose some studies that have attempted to remedy this problem by adopting the competency-based approach that involves the referential line. This approach has as a main characteristic the attainment of the match between training and employment. Therefore, it is a relevant solution for this problem. We scrutinized the selected studies, presenting their objectives, methodologies and results, and we provided our own analysis. Then, we focused on the Moroccan context through observations and studies already conducted. And finally, we introduced the problematic of our future project.

Capital as an important factor of production must be sufficient in business for effective operation
of an organization. Bank is one of these organizations whose capital adequacy is of paramount
significance to its customers. The Central Bank of Nigeria has the obligation to provide
protection and confer confidence on all the banks’ depositors and creditors by ensuring banks’
capital adequacy to absorb their looses and financial short comings. This is the main reason
behind the new bank reform which emphasized that banks’ capital base should be increased from
N2billion to N25billion for effective performance. The researchers were more concerned on
finding out the effect of the new banks’ recapitalization for capital adequacy can improve bank
performance. Secondary data was used for this research. Data collected were analyzed with
regression analysis and recommendations were made based on the results of the analysis for
policy making.
Key Words: Capital, Capital Adequacy and Bank Performance.

Using a panel data set of 4995 banks across 11 developed and emerging countries during the period (2011-2015), this report analyses the amount of liquidity created by banks, how liquidity creation, bank-specific and the macroeconomic factors affecting bank profitability. The results show evidence of increased creation of liquidity over the period. By applying the panel data fixed effect technique, banks that create more liquidity, are set up to have lower profitability. As well as, Asset management, bank size and capital ratio are positively correlated with bank profitability. While, credit quality and operating efficiency affect bank's profits negatively. Additionally, macroeconomic factors have different impact on profitability indicators in each market. Our findings may help decision makers inside and outside bank to determine important factors affecting bank profitability.

Basel norms are a set of international banking regulations formulated by the Basel committee on bank supervision, which set out the minimum capital requirements to sustain banks the world over. The committee operates from Basel in Switzerland. The changes in the rules for raising Basel III-compliant capital announced by India's central bank in September 2014 are "credit positive" as they make it easier for banks to raise funds and attract more investors, The Reserve Bank of India on Sept. 1, 2014 cut the minimum maturity for Tier 2 capital that banks can issue to five years from 10 years. It also allowed retail investors to buy Tier 1 capital.  This regulation ensures the soundness of the banks by focusing on the need, genesis and development of the concept of capital adequacy ratio (CAR) in banking and are discussed and linked up to BASEL III norms . The paper provides an outline of the basics of BASEL III norms and its impact on CAR This newest accord seeks to improve the banking sector’s ability to deal with financial and economic stress, build up risk management and the bank’s transparency. The BASEL III is to be implemented by banks in India as per the guidelines issued by RBI from time to time. This paper has briefly described the impact of BASEL III on the capital adequacy ratio of banks.

Using a panel data set of 4995 banks across 11 developed and emerging countries during the period (2011-2015), this report analyses the amount of liquidity created by banks, how liquidity creation, bank-specific and the macroeconomic factors affecting bank profitability. The results show evidence of increased creation of liquidity over the period. By applying the panel data fixed effect technique, banks that create more liquidity, are set up to have lower profitability. As well as, Asset management, bank size and capital ratio are positively correlated with bank profitability. While, credit quality and operating efficiency affect bank's profits negatively. Additionally, macroeconomic factors have different impact on profitability indicators in each market. Our findings may help decision makers inside and outside bank to determine important factors affecting bank profitability.

... and also his mind-opening lectures. I am also grateful to all my lecturers particularly ProfessorNini, Dr. Nik Hassani, Encik Ahmad Yaacob, Mr. Larry, Tuan Syd Abdul Rahman, Puan Rusniab, Cik Faizab Ismail, and Encik Munauwar. They have shown me ...

Purpose – The purpose of this paper is to explore the connections between state education finance
distribution models and student achievement. To date, lawsuits challenging the constitutionality of
state finance systems have been heard in 45 states; the judicial interpretation of the requirement to
provide equality of educational opportunity has led to changes in finance distribution models as well
as the implementation of accountability policy.
Design/methodology/approach – The study included district level finance and achievement data
from five states. Researchers reviewed the relevant judicial interpretation of the finance system, the
accountability policy, and the finance distribution system. Next, researchers calculated the equity of
both the finance distribution model and measures of student achievement. Finally, an equity ratio was
developed and calculated to discern the degree to which state distribution models resulted in equitable
measures of student achievement.
Findings – Findings reveal that no state has both an equitable system of finance and equitable
measures of student achievement. The way that states define proficiency significantly impacts the
percentage of students that reach proficiency. This impacts the provision of equality of opportunity.
Originality/value – Traditionally, the measurement of equity has only been applied to finance
distribution systems. The authors of this paper have applied these concepts to measures of student
achievement and aligned the two concepts with the equity ratio. Since states are charged with providing
sufficient resources to enable students to reach proficiency, an understanding of the interaction between
resources and achievement is a critical tool in analyzing the provision of equal opportunity.

... and also his mind-opening lectures. I am also grateful to all my lecturers particularly ProfessorNini, Dr. Nik Hassani, Encik Ahmad Yaacob, Mr. Larry, Tuan Syd Abdul Rahman, Puan Rusniab, Cik Faizab Ismail, and Encik Munauwar. They have shown me ...

This study attempts to analyze the company specific determinants of the capital efficiency, by taking return on equity as a proxy for efficient use of capital in the context of Indian Life insurance sector during the period 2008–2018. According to the final results achieved by applying specific panel data techniques, the determinants of the Capital performance are the claims ratio and solvency margin.

Lahan perairan terutama pesisir dan lautan merupakan bagian yang menyatukan seluruh pulau-pulau besar dan kecil dalam satu kesatuan Negara Kesatuan Republik Indonesia (NKRI). Peranan dari kawasan pesisir dan lautan sangat penting sebagai sumber daya hayati (ikan dan non ikan), sumber bahan non hayati seperti bahan tambang (Timah, aluminium, gas dan minyak bumi), serta sebagai sumber daya keanekaragaman hayati baik genetik, keragaman spesies dan ekosistim. Sumber daya Kenekaragaman Hayati adalah bagian yang penting yang harus dilindungi, dimana pemerintah telah mengalokasikan sejumlah kawasan pesisir dan laut menjadi kawasan kawasan konservasi dalam berbagai bentuk seperti Taman Nasional laut, Kawasan Konservasi Perairan, Suaka Margasatwa Laut, Kawasan Konservasi Laut Daerah (KKLD), Daerah Perlindungan Laut ( DPL) dsb. Tujuan dari pengalokasian kawasan konservasi tersebut adalah untuk menjamin keberadaan dan ketersediaan serta kesinambungan sumberdaya pesisir dan lautan dengan meningkatkan kwalitas nilai dan keanekargamannya.

This paper provided an insight on how a fragmented supervisory regime can pose a real risk to the banking sector in particular and the financial sector in general.
It can be seen from the assignment that Risk management and supervision do usually go hand in hand lack of one means inflexibility in the other. Therefore, the global financial crisis 2007 acted as a wakeup call and much need to be desired to avoid an occurrence of the crisis in the near future.

Capital adequacy ratio is the main indicator for banks to proceed with their operations. Standards for the calculation of the ratio are based on Basel Accord. Key factor for the calculation is credit risk. Credit risk is a function of credit and collateral type. In this case, mortgage has lower risk weight based on its collateral structure on credit risk. This research evaluates the effects of mortgages on capital adequacy ratio to understand the effects of collateral based credits. The findings show positive results between capital adequacy ratio and mortgages of participation banks. However, mortgages have negative impact on capital adequacy ratio of conventional banks. Participation and conventional banks of Turkey are compared on linear regression to analyse the effects of mortgages on capital adequacy ratio. Results are important for further research and professionals.

Adopting new, market-oriented, strategies presents mining enterprises with new challenges, effective realization of which demands accurate tools facilitating evaluation of activity at mine, preparation plant and smelter levels. The tools include reserve, technological and economical parameters, which together with margins of safety defining percentage of resource level for each parameter, shape economic viability of each enterprise.
Nawigator® system presented in this paper allows to conduct analyses of profitability of production process within the scope of activities of a mine and ore preparation plant, by means of cumulative cost calculations. In its mining-related part the program is a component module of an information management system (using S AP/R3 system as a source of data) developed to aid control of production in all areas of the whole technological process, i.e. from ore to metal (electrollytic copper in metallurgical plant).

Skuteczna realizacja nowych strategii rynkowych stawia przed przedsiębiorstwami wydobywczymi nowe wyzwania, których realizacja wymaga precyzyjnych instrumentów oceny prowadzonej działalności na szczeblu kopalni, zakładu wzbogacania rud i hut. Instrumentami tymi są parametry złożowe, technologiczne i ekonomiczne, które wraz z marginesami bezpieczeństwa określającymi procentowy poziom rezerw każdego z parametrów kształtują rentowność podejmowanych przedsięwzięć.
Prezentowany w artykule system Nawigator® pozwala analizować rentowność procesu produkcyjnego w układzie rachunku ciągnionego w obszarze kopalni i zakładów wzbogacania rudy. Program w swej części górniczej jest elementem przygotowanego systemu informatycznego (wykorzystującego jako źródło informacji system SAP/R3) mającego na celu sterowanie produkcją w całym ciągu technologicznym, a więc we wszystkich obszarach obejmujących całość procesu ruda-metal (miedź katodowa w hutach).

ABSTRACT
Basel II framework is based on the 1988 accord’s basic structure of setting capital requirements and builds a firm foundation for capital regulation, supervision and market discipline to enhance prudent risk management to achieve financial stability. The framework better reflects the underlying risks that banks face and provides incentives for risk management. This study sought to examine the extent of Basel II adoption and its perceived implications on commercial banks in Kenya. The study was guided by the following specific objectives: (i) to establish the extent to which Basel II requirements have been adopted by commercial banks in Kenya; and (ii) to determine the perceived implications of Basel II Accord on commercial banks in Kenya.

For purposes of this study, a descriptive survey was undertaken. The population was all the commercial banks registered and licensed to undertake commercial banking business in Kenya.  The total number of commercial banks stood at 45 as at December, 2009 (CBK, 2009). The respondent from each of the commercial banks was the Chief Executive Officer (CEO) or their designates, who are charged with the responsibility of shaping the strategic direction of their respective organization. The survey method was used to collect data. A semi-structured questionnaire was used to collect primary data from the respondents. The data pertaining to profile of the respondents and their respective organizations was analyzed using content analysis while data pertaining to the objectives of the study was analyzed by employing descriptive statistic. Descriptive statistics were used to describe the basic features of the data in the study.

Findings of the study indicate a substantial progress of the Kenyan banking sector as far as Basel II implementation is concerned. The international banks, drawing on the support of their parent groups, are in a better state of adoption compared to local institutions. The findings also show that many banks in Kenya do not rely on External Ratings saves for their international counterparties and large corporate counterparties. This finding is consistent with the limited credit rating penetration in the country.

In view of the findings and conclusions, the following recommendations are made for policy and practice:

There is limited credit rating penetration in the country. Unrated exposures under the standardized approach would attract higher risk weights and thus more capital would be required to be set aside for such exposures; since Basel II allows for the use of internal models by banks to determine their capital charges pursuant to supervisory approval, a transition period will therefore be required for Kenyan banks to collect the requisite data for the model based approaches to assessing their capital adequacy needs; human resources competencies have been identified as a cross-cutting challenge. Basel II will require banks to upscale their human resource base and a “talent war” in the banking sector can be anticipated going forward; and upgrades and overhauls of existing IT literature systems for most banks will be required. Robust, scalable systems will be required to ensure banks can meet the rigorous Basel II information requirements.

This review paper fits in the context of the adequate matching of training to employment, which is one of the main challenges that universities around the world strive to meet. In higher education, the revision of curricula necessitates a return to the skills required by the labor market to train skilled labors. In this research, we started with the presentation of the conceptual framework. Then we quoted different currents that discussed the problematic of the job training match from various perspectives. We proceeded to choose some studies that have attempted to remedy this problem by adopting the competency-based approach that involves the referential line. This approach has as a main characteristic the attainment of the match between training and employment. Therefore, it is a relevant solution for this problem. We scrutinized the selected studies, presenting their objectives, methodologies and results, and we provided our own analysis. Then, we focused on the Moroccan context t...