Determinants of commercial banks’ performance: Evidence from emerging economies
This paper examines the determinants of banks’ performance in emerging economies. Sustainable growth of emerging economies depends on the financial performance of their banks’. The determinants of banks’ performance are, therefore, analyzed through panel econometric techniques over the crisis period...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Growing Science
2017-11-01
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| Series: | Accounting |
| Subjects: | |
| Online Access: | http://www.growingscience.com/ac/Vol1/ac_2015_1.pdf |
| _version_ | 1819033744484335616 |
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| author | Imran Khan Muhammad Tahir Nazish Umer |
| author_facet | Imran Khan Muhammad Tahir Nazish Umer |
| author_sort | Imran Khan |
| collection | DOAJ |
| description | This paper examines the determinants of banks’ performance in emerging economies. Sustainable growth of emerging economies depends on the financial performance of their banks’. The determinants of banks’ performance are, therefore, analyzed through panel econometric techniques over the crisis period of 2008-2014 using data of the top 50 banks from the 10 sampled emerging economies. Both banks’ specific and macroeconomic variables are considered in the analysis. Results reveal that macroeconomic variables like GDP and inflation are significant forces behind high Return on Assets (ROA) in emerging economies banks’, however, both negatively influenced the Net Interest Margins (NIM). Among the banks’ specific variables high profitability and NIM are related to high operating costs. This shows that expenses are managed properly in these economies. Further, leverage has a positive impact on both (ROA) and (NIM).While reserve requirement has negatively and significantly influence both profitability and net interest margins, which indicates the prominence of central bank’s monetary policy by considering the importance of liquidity for emerging economies commercial banks in economic recovery phase. |
| first_indexed | 2024-12-21T07:22:42Z |
| format | Article |
| id | doaj.art-e2a46f0309aa4f4b8c873608a857e922 |
| institution | Directory Open Access Journal |
| issn | 2369-7393 2369-7407 |
| language | English |
| last_indexed | 2024-12-21T07:22:42Z |
| publishDate | 2017-11-01 |
| publisher | Growing Science |
| record_format | Article |
| series | Accounting |
| spelling | doaj.art-e2a46f0309aa4f4b8c873608a857e9222022-12-21T19:11:46ZengGrowing ScienceAccounting2369-73932369-74072017-11-0111172810.5267/j.ac.2015.11.001Determinants of commercial banks’ performance: Evidence from emerging economiesImran KhanMuhammad TahirNazish Umer This paper examines the determinants of banks’ performance in emerging economies. Sustainable growth of emerging economies depends on the financial performance of their banks’. The determinants of banks’ performance are, therefore, analyzed through panel econometric techniques over the crisis period of 2008-2014 using data of the top 50 banks from the 10 sampled emerging economies. Both banks’ specific and macroeconomic variables are considered in the analysis. Results reveal that macroeconomic variables like GDP and inflation are significant forces behind high Return on Assets (ROA) in emerging economies banks’, however, both negatively influenced the Net Interest Margins (NIM). Among the banks’ specific variables high profitability and NIM are related to high operating costs. This shows that expenses are managed properly in these economies. Further, leverage has a positive impact on both (ROA) and (NIM).While reserve requirement has negatively and significantly influence both profitability and net interest margins, which indicates the prominence of central bank’s monetary policy by considering the importance of liquidity for emerging economies commercial banks in economic recovery phase.http://www.growingscience.com/ac/Vol1/ac_2015_1.pdfEmerging economiesFinancial crisisPanel econometrics |
| spellingShingle | Imran Khan Muhammad Tahir Nazish Umer Determinants of commercial banks’ performance: Evidence from emerging economies Accounting Emerging economies Financial crisis Panel econometrics |
| title | Determinants of commercial banks’ performance: Evidence from emerging economies |
| title_full | Determinants of commercial banks’ performance: Evidence from emerging economies |
| title_fullStr | Determinants of commercial banks’ performance: Evidence from emerging economies |
| title_full_unstemmed | Determinants of commercial banks’ performance: Evidence from emerging economies |
| title_short | Determinants of commercial banks’ performance: Evidence from emerging economies |
| title_sort | determinants of commercial banks performance evidence from emerging economies |
| topic | Emerging economies Financial crisis Panel econometrics |
| url | http://www.growingscience.com/ac/Vol1/ac_2015_1.pdf |
| work_keys_str_mv | AT imrankhan determinantsofcommercialbanksperformanceevidencefromemergingeconomies AT muhammadtahir determinantsofcommercialbanksperformanceevidencefromemergingeconomies AT nazishumer determinantsofcommercialbanksperformanceevidencefromemergingeconomies |