EVALUATING BANKS FINANCIAL PERFORMANCE USING FINANCIAL RATIOS: A CASE STUDY OF KUWAIT LOCAL COMMERCIAL BANKS
This study investigates the effect of Leverage, Total deposit to total assets, Total loans to total assets, Retained earnings to total assets, and Tangible book value per share ratios on banks’ financial performance for Return on Assets (ROA) as the dependent variable. The data were obtained from th...
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| Format: | Article |
| Language: | English |
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University of Oradea Publishing House
2019-09-01
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| Series: | Oradea Journal of Business and Economics |
| Subjects: | |
| Online Access: | http://ojbe.steconomiceuoradea.ro/wp-content/uploads/2019/10/OJBE_vol-42-56-68.pdf |
| _version_ | 1818138044065120256 |
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| author | Abuzarqa Rawan |
| author_facet | Abuzarqa Rawan |
| author_sort | Abuzarqa Rawan |
| collection | DOAJ |
| description | This study investigates the effect of Leverage, Total deposit to total assets, Total loans to total assets, Retained earnings to total assets, and Tangible book value per share ratios on banks’ financial performance for Return on Assets (ROA) as the dependent variable. The data were obtained from the financial statement (Income statement and Balance sheet) of the selected banks. The results were found by analyzing the financial ratios of five commercial banks in Al-Kuwait throughout five years (2013–2017). We used analytical methods which led us to the presented results. MANOVA and ANOVA analysis were used to show the difference between banks in their financial situation and performance, and then the panel regression model used to study relationships among variables. The Hausman test was applied to compare fixed and random effect models which were shown that the random effect model gives the better result. Our findings show that the independent variables “Total deposit” to “total assets” and “Retained earnings” to “total assets” have a strong significant impact on our dependent variable ROA. “Leverage” and “Total loans” to “total assets” have a less significant effect on the banks’ financial performance (ROA) while Tangible book value per share does not affect the ROA. |
| first_indexed | 2024-12-11T10:05:56Z |
| format | Article |
| id | doaj.art-520c81fa5b244752906555931d6e4828 |
| institution | Directory Open Access Journal |
| issn | 2501-3599 2501-3599 |
| language | English |
| last_indexed | 2024-12-11T10:05:56Z |
| publishDate | 2019-09-01 |
| publisher | University of Oradea Publishing House |
| record_format | Article |
| series | Oradea Journal of Business and Economics |
| spelling | doaj.art-520c81fa5b244752906555931d6e48282022-12-22T01:11:56ZengUniversity of Oradea Publishing HouseOradea Journal of Business and Economics2501-35992501-35992019-09-01425668EVALUATING BANKS FINANCIAL PERFORMANCE USING FINANCIAL RATIOS: A CASE STUDY OF KUWAIT LOCAL COMMERCIAL BANKSAbuzarqa Rawan0Károly Ihrig Doctoral School of Management and Business, University of Debrecen, Debrecen, Hungary.This study investigates the effect of Leverage, Total deposit to total assets, Total loans to total assets, Retained earnings to total assets, and Tangible book value per share ratios on banks’ financial performance for Return on Assets (ROA) as the dependent variable. The data were obtained from the financial statement (Income statement and Balance sheet) of the selected banks. The results were found by analyzing the financial ratios of five commercial banks in Al-Kuwait throughout five years (2013–2017). We used analytical methods which led us to the presented results. MANOVA and ANOVA analysis were used to show the difference between banks in their financial situation and performance, and then the panel regression model used to study relationships among variables. The Hausman test was applied to compare fixed and random effect models which were shown that the random effect model gives the better result. Our findings show that the independent variables “Total deposit” to “total assets” and “Retained earnings” to “total assets” have a strong significant impact on our dependent variable ROA. “Leverage” and “Total loans” to “total assets” have a less significant effect on the banks’ financial performance (ROA) while Tangible book value per share does not affect the ROA.http://ojbe.steconomiceuoradea.ro/wp-content/uploads/2019/10/OJBE_vol-42-56-68.pdfBank financial performanceROAFinancial ratiosMANOVA-ANOVA analysisPanel regressionHausman test |
| spellingShingle | Abuzarqa Rawan EVALUATING BANKS FINANCIAL PERFORMANCE USING FINANCIAL RATIOS: A CASE STUDY OF KUWAIT LOCAL COMMERCIAL BANKS Oradea Journal of Business and Economics Bank financial performance ROA Financial ratios MANOVA-ANOVA analysis Panel regression Hausman test |
| title | EVALUATING BANKS FINANCIAL PERFORMANCE USING FINANCIAL RATIOS: A CASE STUDY OF KUWAIT LOCAL COMMERCIAL BANKS |
| title_full | EVALUATING BANKS FINANCIAL PERFORMANCE USING FINANCIAL RATIOS: A CASE STUDY OF KUWAIT LOCAL COMMERCIAL BANKS |
| title_fullStr | EVALUATING BANKS FINANCIAL PERFORMANCE USING FINANCIAL RATIOS: A CASE STUDY OF KUWAIT LOCAL COMMERCIAL BANKS |
| title_full_unstemmed | EVALUATING BANKS FINANCIAL PERFORMANCE USING FINANCIAL RATIOS: A CASE STUDY OF KUWAIT LOCAL COMMERCIAL BANKS |
| title_short | EVALUATING BANKS FINANCIAL PERFORMANCE USING FINANCIAL RATIOS: A CASE STUDY OF KUWAIT LOCAL COMMERCIAL BANKS |
| title_sort | evaluating banks financial performance using financial ratios a case study of kuwait local commercial banks |
| topic | Bank financial performance ROA Financial ratios MANOVA-ANOVA analysis Panel regression Hausman test |
| url | http://ojbe.steconomiceuoradea.ro/wp-content/uploads/2019/10/OJBE_vol-42-56-68.pdf |
| work_keys_str_mv | AT abuzarqarawan evaluatingbanksfinancialperformanceusingfinancialratiosacasestudyofkuwaitlocalcommercialbanks |