The basic purpose of this research is to examine the effect of liquidity management on profitability in the banking sector of Pakistan. Liquidity management is independent and profitability is dependent variable. The secondary data used for this study and taking from publish annual report of ten banks (2006-2015). The data was analyzed by using correlation, descriptive statistics and regression techniques run on E-views. The quick, current, cash, interest coverage and capital adequacy ratios is taken as dimension of liquidity and return on assets, return on equity, and earnings per share as dimension of profitability. The research findings show that interest coverage, capital adequacy and quick ratio has a positive whereas the cash and current ratio has negative relationship with banks profitability.
Liquidity Management and Its Impact on Banks Profitability: A Perspective 0f ...inventionjournals
Purpose:-The basic aim of this research is to examine liquidity management impact on profitability in banking sector of Pakistan. Methodology: - The secondary data used for this study and taking from publish annual report of ten banks (2006-2015). The data was analyzed by using correlation, descriptive statistics and regression techniques run on E-views. The quick, current, cash, interest coverage and capital adequacy ratios are taken as dimension of liquidity and return on asset, return on equity, and earning per share as dimension of profitability. Findings: - The research finding shows that quick and capital adequacy ratio has positive impact on banks profitability determinants earnings per share and return on assets. The cash and current ratio has a negative relationship with return on assets. While interest coverage ratio is positively associated with return equity and earnings per share and is negatively associated with return on equity. Therefore overall empirical results show that liquidity management has positive impact on banks profitability. Research Limitation: - This paper examines banks liquidity management and their impact on banks profitability in Pakistan by taking only ten conventional banks data for ten year. The further research can be conducted by adding different segment, banks and countries.
This paper empirically examines the impact of bank specific characteristics in determining the Islamic banking profitability in Bangladesh. Research period covers 2010–2017. Research method is a panel analysis. Fixed effects model is applied based on the Hausman test. The study takes return on assets (ROA) as the proxy of profitability. Company specific explanatory variables for the study are bank size, capital-to-risk assets (CRAR), investment-to-deposit (liquidity), non-performing investment (NPI), and cost-to-income. The study finds 4 out of 5 variables statistically significant. However, liquidity slightly misses the significance level. We have found CRAR and cost-to-income are negatively correlated, and liquidity is positively correlated to bank profitability as our expectation. On the other hand, estimation shows a negative correlation between bank size and profitability. Moreover, NPI is found to be positively correlated to ROA because Islamic banking industry’s very low percentage of non-performing investment (3.3%) could not inversely affect the profitability.
EFFECT OF CAPITAL ADEQUACY, EARNINGS QUALITY AND LEVERAGE ON ISLAMIC BANKING ...IJSB
The development of the economic system of a nation is closely related with the banking system of that nation. Islamic banking system has been introduced in every Muslim country. As a Muslim country Bangladesh was started practicing this non-interest bearing banking in 1983. This study focused on the determinants like capital adequacy, earnings quality and leverage those affect the profitability of Islamic banking. For this study researchers selected five Islamic banks and collected secondary data from the financial statements of the banks during 2011-2014. The study showed that capital adequacy and leverage were positively related with profitability but there was a negative correlation between cost to income ratio and return on asset (ROA) of the selected bank during that period. It is also found that the independent variables were sufficient to explain the changes of dependent variable ROA.
Analysis of Internal, Market & Economic Based Financial Performance Measureme...IOSRJBM
The aim of this study is to investigate the financial performance of 10 commercial banks listed on Dhaka Stock Exchange. In this paper, financial performance has been measured by using three indicators. Internal–based performance measured by Return on Assets, Market-based performance measured by Tobin’s Q model (Price / Book value of Equity) and Economic–based performance measured by Economic Value adds. The correlation and multiple regression of annual time series data is used to find the impact of bank size, credit risk, operational efficiency and asset management on financial performance measured by the three indicators, The study rejected the null hypothesis and it is found that there exist statistically significant impact of bank size, credit risk, operational efficiency and asset management with ROA and Economic Value Added. On the other hand Tobin’s Q has insignificant impact on financial performance of commercial banks
A Dissertation Report On "Study Of Net Interest Margin {NIM} Of Selected INDIAN Public & Private Sector Banks"
Has Undertaken 10 Years Financial Data Of Selected Banks i.e. 2008-2017 for the Study.
The profitability of commercial banks is influenced by a number of internal and external factors. This paper attempts to identify the internal factors which significantly influence the profitability of commercial banks in Bangladesh. In this study, profitability is measured by ROA and ROE which may be significantly influenced by the internal factors such as IRS, NIM, CAR, CR, DG, LD, CTI and SIZE of the bank. Data are collected from published annual reports during 2014--2018 of 23 commercial banks. Using simple regression model, it is found that CR has significant effect on the profitability and CAR has significant influence on ROA only. In addition to this, DG has significant effects on PCBs’ profitability (ROE only) where as IRS and CTI have significant influence on profitability (ROA only) of ICBs. Further, none of these variables have significant effects on the profitability of SCBs but CAR and CR are correlated with profitability (ROA only) and the causes may be the nature of services provided by SCBs to its clients. The internal policy makers should manage the influential internal factors of the banks in order to increase their profitability so that they can meet stakeholders’ expectations.
Liquidity Management and Its Impact on Banks Profitability: A Perspective 0f ...inventionjournals
Purpose:-The basic aim of this research is to examine liquidity management impact on profitability in banking sector of Pakistan. Methodology: - The secondary data used for this study and taking from publish annual report of ten banks (2006-2015). The data was analyzed by using correlation, descriptive statistics and regression techniques run on E-views. The quick, current, cash, interest coverage and capital adequacy ratios are taken as dimension of liquidity and return on asset, return on equity, and earning per share as dimension of profitability. Findings: - The research finding shows that quick and capital adequacy ratio has positive impact on banks profitability determinants earnings per share and return on assets. The cash and current ratio has a negative relationship with return on assets. While interest coverage ratio is positively associated with return equity and earnings per share and is negatively associated with return on equity. Therefore overall empirical results show that liquidity management has positive impact on banks profitability. Research Limitation: - This paper examines banks liquidity management and their impact on banks profitability in Pakistan by taking only ten conventional banks data for ten year. The further research can be conducted by adding different segment, banks and countries.
This paper empirically examines the impact of bank specific characteristics in determining the Islamic banking profitability in Bangladesh. Research period covers 2010–2017. Research method is a panel analysis. Fixed effects model is applied based on the Hausman test. The study takes return on assets (ROA) as the proxy of profitability. Company specific explanatory variables for the study are bank size, capital-to-risk assets (CRAR), investment-to-deposit (liquidity), non-performing investment (NPI), and cost-to-income. The study finds 4 out of 5 variables statistically significant. However, liquidity slightly misses the significance level. We have found CRAR and cost-to-income are negatively correlated, and liquidity is positively correlated to bank profitability as our expectation. On the other hand, estimation shows a negative correlation between bank size and profitability. Moreover, NPI is found to be positively correlated to ROA because Islamic banking industry’s very low percentage of non-performing investment (3.3%) could not inversely affect the profitability.
EFFECT OF CAPITAL ADEQUACY, EARNINGS QUALITY AND LEVERAGE ON ISLAMIC BANKING ...IJSB
The development of the economic system of a nation is closely related with the banking system of that nation. Islamic banking system has been introduced in every Muslim country. As a Muslim country Bangladesh was started practicing this non-interest bearing banking in 1983. This study focused on the determinants like capital adequacy, earnings quality and leverage those affect the profitability of Islamic banking. For this study researchers selected five Islamic banks and collected secondary data from the financial statements of the banks during 2011-2014. The study showed that capital adequacy and leverage were positively related with profitability but there was a negative correlation between cost to income ratio and return on asset (ROA) of the selected bank during that period. It is also found that the independent variables were sufficient to explain the changes of dependent variable ROA.
Analysis of Internal, Market & Economic Based Financial Performance Measureme...IOSRJBM
The aim of this study is to investigate the financial performance of 10 commercial banks listed on Dhaka Stock Exchange. In this paper, financial performance has been measured by using three indicators. Internal–based performance measured by Return on Assets, Market-based performance measured by Tobin’s Q model (Price / Book value of Equity) and Economic–based performance measured by Economic Value adds. The correlation and multiple regression of annual time series data is used to find the impact of bank size, credit risk, operational efficiency and asset management on financial performance measured by the three indicators, The study rejected the null hypothesis and it is found that there exist statistically significant impact of bank size, credit risk, operational efficiency and asset management with ROA and Economic Value Added. On the other hand Tobin’s Q has insignificant impact on financial performance of commercial banks
A Dissertation Report On "Study Of Net Interest Margin {NIM} Of Selected INDIAN Public & Private Sector Banks"
Has Undertaken 10 Years Financial Data Of Selected Banks i.e. 2008-2017 for the Study.
The profitability of commercial banks is influenced by a number of internal and external factors. This paper attempts to identify the internal factors which significantly influence the profitability of commercial banks in Bangladesh. In this study, profitability is measured by ROA and ROE which may be significantly influenced by the internal factors such as IRS, NIM, CAR, CR, DG, LD, CTI and SIZE of the bank. Data are collected from published annual reports during 2014--2018 of 23 commercial banks. Using simple regression model, it is found that CR has significant effect on the profitability and CAR has significant influence on ROA only. In addition to this, DG has significant effects on PCBs’ profitability (ROE only) where as IRS and CTI have significant influence on profitability (ROA only) of ICBs. Further, none of these variables have significant effects on the profitability of SCBs but CAR and CR are correlated with profitability (ROA only) and the causes may be the nature of services provided by SCBs to its clients. The internal policy makers should manage the influential internal factors of the banks in order to increase their profitability so that they can meet stakeholders’ expectations.
IMPACT ON INDIAN BANKS’ PROFITABILITY INDICATORS – AN EMPIRICAL STUDYIAEME Publication
The Indian banking system consists of 26 public sector banks, 20 private sector banks, 43 foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural cooperative banks, in addition to cooperative credit institutions. The Indian banking sector’s assets reached US$ 1.8 trillion in FY14 from US$ 1.3 trillion in FY10, with 70 per cent of it being accounted by the public sector. Indian banks are increasingly focusing on adopting integrated approach to risk management. Banks have already embraced the international banking supervision accord of Basel II. According to RBI, majority of the banks already meet capital requirements of Basel III, which has a deadline of March 31, 2019. Most of the banks have put in place the framework for asset-liability match, credit and derivatives risk management.
The Performance Analysis of Private Conventional Banks: A Case Study of Bangl...IOSR Journals
This study attempts primarily to measure the financial performance of some selected private
commercial banks in Bangladesh for the period 2006-2011 and to identify whether any relationship exists
between a bank’s years of operation and its performance. For this purpose five banks have been selected from
different generations. The financial performances of these banks have been scrutinized from the following four
dimensions: (1) profitability (2) liquidity (3) credit risk and (4) efficiency. The study concluded that there is no
specific relationship between the generation of banks and its performance. The performances of banks are
dependent more on the management’s ability in formulating strategic plans and the efficient implementation of
its strategies. The study findings can be helpful for management of private commercial banks in Bangladesh to
improve their financial performance and formulate policies that will improve their performance. The study also
identified specific areas for each bank to work on which can ensure sustainable growth for these banks
Determinants of Banks’ Financial Performance: A Comparative Study between Nat...inventionjournals
Financial performance is one of the most critical factors having impact on the decision making of the resource providers. And thus to ensure the existence in the ever growing competitive business environment, every institution should be more concerned about the factors affecting their financial performance. This paper specially focuses on identifying the factors having impact on the financial performance of the commercial banks operating in Bangladesh. An effort has also been exerted to determine whether the extent of influence of various factors on financial performance varies with respect to local private and nationalized commercial banks. For this purpose 10 local private commercial banks (PCB) and all nationalized commercial banks (NCB) have been taken covering the period from 2008-2014. Here, data has been collected from the annual reports of the banks under consideration. To draw conclusion a multiple regression has been run by considering financial performance (profitability) as dependent variable and operating efficiency, asset utilization , liquidity, credit risk, capital adequacy and size of the company as independent variables. The study finds that asset utilization and operating efficiency have significant positive impact on banks' financial performance (profitability) whereas credit risk has significant negative impact. However, for PCBs asset utilization is the most critical factor to performance. On the other hand, result shows that in case of NCB 1 taka increase in credit risk is responsible for negative return of 0.968 taka. It is found that financial performance has no significant relationship with size and liquidity of the banks
Evaluating Loan Loss Provisioning for Non-Performing Loans and Its Impact on ...Fakir Tajul Islam
Using the aggregate data of 56 commercial banks in the last 9 years
(2009-2017), this study attempts to evaluate the Impacts of LLP maintained for NPLs on profitability, as it may help
to take the level of the LLP, and NPLs in the optimum level of business success.
Analysis of the Influence of Bank Governance on Cash Holdings of Banks in Ghanaijtsrd
The purpose of current paper is to examine the impact of bank governance CG on cash holdings CH of universal banks in Ghana. Different characteristics of CG including board independence, board size, insider ownership and CEO duality were examined to check their impact on CH of banks. The panel data on 25 universal banks covering the period of 2009 2018 were used for the study. The panel least square repression model was utilized where the Eviews computer software version 11.0 was used for analysis of the data. The correlations analysis and Panel least square regression were used as the key analytical techniques. Findings from the study reveal that, Board size, working capital and Bank size constitute the predominant statistically significant factors that contributes to cash holdings among the universal banks. Hence Board size as significant corporate governance dimension has negative effect on cash holdings as it reduces cash holdings of the banks. The results show that CEO Duality has a positive but insignificant impact on Cash Holdings of the universal banks while board independent and insider ownership have negative but statistically insignificant influence on cash holdings of the universal banks. The study contributes to shaping the Bank governance policies for universal banks and the financial sector in the developing countries. Samuel Asubonteng | Yusheng Kong "Analysis of the Influence of Bank Governance on Cash Holdings of Banks in Ghana" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-1 , December 2020, URL: https://www.ijtsrd.com/papers/ijtsrd38139.pdf Paper URL : https://www.ijtsrd.com/management/accounting-and-finance/38139/analysis-of-the-influence-of-bank-governance-on-cash-holdings-of-banks-in-ghana/samuel-asubonteng
This research work investigated the influence of firm size on the financial performance of deposit money banks quoted on the Nigerian stock exchange. The research work is necessitated by the need to find the factors that respond positively or negatively to the financial performance of deposit money banks in Nigeria. Five deposit money banks were sampled with the aid of Taro Yemeni sampling technique to represent the entire banking industry in Nigeria. The firm size proxied by log of total assets represents the explanatory variable while the financial performance measured by profitability proxied by return on asset is the dependent variable. The analysis was conducted using the pooled OLS regression and fixed effect/random effect regression with the aid of STATA for panel regression. In addition, descriptive statistics and correlation analysis were computed. The finding of the study indicates that firm size insignificantly negatively influenced financial performance as a result of diseconomies of scale. The study therefore recommends that the industry should minimize the cost of expansion and enjoy maximum benefits of economies of scale in addition to other factors that may stimulate financial performance should be considered instead of the firm size that indicate insignificantly negative effect.
A Study on Ratio Analysis at Accord Puducherryijtsrd
The main aim of the study is to investigate the ratio analysis of ACCORD, Puducherry. The financial decision plays a vital role in improving the growth of any organization. The main goal of the accounting department in the firm is to measuring the performance of the organization to its profitability and also measuring the relationship between the net incomes to equity. The data in the present study is fully based on secondary data and it is collected from the past and present performance of ACCORD Puducherry providing financial assistant to entrepreneur. In order to analyze the financial performance of the organization, the ratio analysis, and trend analysis is used. The result clearly shows that there is high degree of current ratio between the net income and equity, and satisfactory level of trend analysis is high in the present year Pramodh. V | Abinayaselvan. V | Sindhuja. K "A Study on Ratio Analysis at Accord Puducherry" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-6 , October 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29172.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/29172/a-study-on-ratio-analysis-at-accord-puducherry/pramodh-v
This research aims to identify and analyze the effect of Capital Adequacy Ratio (CAR), Operation Expense (BOPO), Net Interest Margin (NIM), and Non Performing Loan (NPL) of the Loan to Deposit Ratio (LDR) of conventional bank on the Indonesia Stock Exchange period 2012 – 2017, either simultaneously or partially. Independent variables used in this study is CAR, BOPO, NIM and NPL, while LDR as the dependent variable.The population in this research is conventional bank listed on the Indonesia Stock Exchange. The sampling technique in this research is purposive sampling. The number of samples in accordance with the prescribed criteria are as many as 35 samples. Based on the result of the research found that the variable CAR influences negatively insignificantly toward LDR, BOPO and NIM influences positively insignificantly toward LDR, while the variable NPL influences positively significantly toward CAR. But simultaneously CAR, BOPO, NIM, and NPL jointly affect the LDR.
A STUDY ON THE FINANCIAL PERFORMANCE OF FOREIGN COMMERCIAL BANKS IN SRI LANKA...ectijjournal
Banks serve as backbone to the financial sector, which facilitate the proper utilization of financial
resources of a country. The banking sector is increasingly growing and it has witnessed a huge flow of
investment. The banking sector of developing countries is different from the developed countries in term of
performance. The banking sector, especially commercial banks of Sri Lanka plays a vital role in the Sri
Lankan economy. The focus of this study was to investigate the financial performance of foreign
commercial banks in Sri Lanka. Many studies are conducted in different countries to study the financial
performance of banking sector using the various statistical methods. In this study, the CAMEL rating
system is used to study the financial performance of foreign commercial banks in Sri Lanka. The study
selects three foreign banks for the analysis. Data was collected for the time period of 2008-2014.
According to the findings foreign sector banks are good in the performance of capital adequacy and
earnings while other variables show an average performance.
A STUDY OF NON-PERFORMING ASSETS AND ITS IMPACT ON BANKING SECTORJournal For Research
Banks plays an important role in the economic development of a country. Banks are growth-driver and the banking business is exposed to various risk, such as credit risk, liquidity risk, interest risk, market risk, operational risk and management risk. Apart from these risks the very important risk is loan recovery. The sound financial position of a bank depends upon the recovery of loans or its level of Non-performing assets (NPAs). Reduced NPAs generally gives the impression that banks have strengthened their credit appraisal processes over the years and growth in NPAs involves the necessity of provisions, which bring down the overall profitability of banks. The Indian banking sector is facing a serious problem of NPA. The magnitude of NPA is comparatively higher in public sectors banks. To improve the efficiency and profitability of banks the NPA need to be reduced and controlled.
IMPACT ON INDIAN BANKS’ PROFITABILITY INDICATORS – AN EMPIRICAL STUDYIAEME Publication
The Indian banking system consists of 26 public sector banks, 20 private sector banks, 43 foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural cooperative banks, in addition to cooperative credit institutions. The Indian banking sector’s assets reached US$ 1.8 trillion in FY14 from US$ 1.3 trillion in FY10, with 70 per cent of it being accounted by the public sector. Indian banks are increasingly focusing on adopting integrated approach to risk management. Banks have already embraced the international banking supervision accord of Basel II. According to RBI, majority of the banks already meet capital requirements of Basel III, which has a deadline of March 31, 2019. Most of the banks have put in place the framework for asset-liability match, credit and derivatives risk management.
The Performance Analysis of Private Conventional Banks: A Case Study of Bangl...IOSR Journals
This study attempts primarily to measure the financial performance of some selected private
commercial banks in Bangladesh for the period 2006-2011 and to identify whether any relationship exists
between a bank’s years of operation and its performance. For this purpose five banks have been selected from
different generations. The financial performances of these banks have been scrutinized from the following four
dimensions: (1) profitability (2) liquidity (3) credit risk and (4) efficiency. The study concluded that there is no
specific relationship between the generation of banks and its performance. The performances of banks are
dependent more on the management’s ability in formulating strategic plans and the efficient implementation of
its strategies. The study findings can be helpful for management of private commercial banks in Bangladesh to
improve their financial performance and formulate policies that will improve their performance. The study also
identified specific areas for each bank to work on which can ensure sustainable growth for these banks
Determinants of Banks’ Financial Performance: A Comparative Study between Nat...inventionjournals
Financial performance is one of the most critical factors having impact on the decision making of the resource providers. And thus to ensure the existence in the ever growing competitive business environment, every institution should be more concerned about the factors affecting their financial performance. This paper specially focuses on identifying the factors having impact on the financial performance of the commercial banks operating in Bangladesh. An effort has also been exerted to determine whether the extent of influence of various factors on financial performance varies with respect to local private and nationalized commercial banks. For this purpose 10 local private commercial banks (PCB) and all nationalized commercial banks (NCB) have been taken covering the period from 2008-2014. Here, data has been collected from the annual reports of the banks under consideration. To draw conclusion a multiple regression has been run by considering financial performance (profitability) as dependent variable and operating efficiency, asset utilization , liquidity, credit risk, capital adequacy and size of the company as independent variables. The study finds that asset utilization and operating efficiency have significant positive impact on banks' financial performance (profitability) whereas credit risk has significant negative impact. However, for PCBs asset utilization is the most critical factor to performance. On the other hand, result shows that in case of NCB 1 taka increase in credit risk is responsible for negative return of 0.968 taka. It is found that financial performance has no significant relationship with size and liquidity of the banks
Evaluating Loan Loss Provisioning for Non-Performing Loans and Its Impact on ...Fakir Tajul Islam
Using the aggregate data of 56 commercial banks in the last 9 years
(2009-2017), this study attempts to evaluate the Impacts of LLP maintained for NPLs on profitability, as it may help
to take the level of the LLP, and NPLs in the optimum level of business success.
Analysis of the Influence of Bank Governance on Cash Holdings of Banks in Ghanaijtsrd
The purpose of current paper is to examine the impact of bank governance CG on cash holdings CH of universal banks in Ghana. Different characteristics of CG including board independence, board size, insider ownership and CEO duality were examined to check their impact on CH of banks. The panel data on 25 universal banks covering the period of 2009 2018 were used for the study. The panel least square repression model was utilized where the Eviews computer software version 11.0 was used for analysis of the data. The correlations analysis and Panel least square regression were used as the key analytical techniques. Findings from the study reveal that, Board size, working capital and Bank size constitute the predominant statistically significant factors that contributes to cash holdings among the universal banks. Hence Board size as significant corporate governance dimension has negative effect on cash holdings as it reduces cash holdings of the banks. The results show that CEO Duality has a positive but insignificant impact on Cash Holdings of the universal banks while board independent and insider ownership have negative but statistically insignificant influence on cash holdings of the universal banks. The study contributes to shaping the Bank governance policies for universal banks and the financial sector in the developing countries. Samuel Asubonteng | Yusheng Kong "Analysis of the Influence of Bank Governance on Cash Holdings of Banks in Ghana" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-1 , December 2020, URL: https://www.ijtsrd.com/papers/ijtsrd38139.pdf Paper URL : https://www.ijtsrd.com/management/accounting-and-finance/38139/analysis-of-the-influence-of-bank-governance-on-cash-holdings-of-banks-in-ghana/samuel-asubonteng
This research work investigated the influence of firm size on the financial performance of deposit money banks quoted on the Nigerian stock exchange. The research work is necessitated by the need to find the factors that respond positively or negatively to the financial performance of deposit money banks in Nigeria. Five deposit money banks were sampled with the aid of Taro Yemeni sampling technique to represent the entire banking industry in Nigeria. The firm size proxied by log of total assets represents the explanatory variable while the financial performance measured by profitability proxied by return on asset is the dependent variable. The analysis was conducted using the pooled OLS regression and fixed effect/random effect regression with the aid of STATA for panel regression. In addition, descriptive statistics and correlation analysis were computed. The finding of the study indicates that firm size insignificantly negatively influenced financial performance as a result of diseconomies of scale. The study therefore recommends that the industry should minimize the cost of expansion and enjoy maximum benefits of economies of scale in addition to other factors that may stimulate financial performance should be considered instead of the firm size that indicate insignificantly negative effect.
A Study on Ratio Analysis at Accord Puducherryijtsrd
The main aim of the study is to investigate the ratio analysis of ACCORD, Puducherry. The financial decision plays a vital role in improving the growth of any organization. The main goal of the accounting department in the firm is to measuring the performance of the organization to its profitability and also measuring the relationship between the net incomes to equity. The data in the present study is fully based on secondary data and it is collected from the past and present performance of ACCORD Puducherry providing financial assistant to entrepreneur. In order to analyze the financial performance of the organization, the ratio analysis, and trend analysis is used. The result clearly shows that there is high degree of current ratio between the net income and equity, and satisfactory level of trend analysis is high in the present year Pramodh. V | Abinayaselvan. V | Sindhuja. K "A Study on Ratio Analysis at Accord Puducherry" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-6 , October 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29172.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/29172/a-study-on-ratio-analysis-at-accord-puducherry/pramodh-v
This research aims to identify and analyze the effect of Capital Adequacy Ratio (CAR), Operation Expense (BOPO), Net Interest Margin (NIM), and Non Performing Loan (NPL) of the Loan to Deposit Ratio (LDR) of conventional bank on the Indonesia Stock Exchange period 2012 – 2017, either simultaneously or partially. Independent variables used in this study is CAR, BOPO, NIM and NPL, while LDR as the dependent variable.The population in this research is conventional bank listed on the Indonesia Stock Exchange. The sampling technique in this research is purposive sampling. The number of samples in accordance with the prescribed criteria are as many as 35 samples. Based on the result of the research found that the variable CAR influences negatively insignificantly toward LDR, BOPO and NIM influences positively insignificantly toward LDR, while the variable NPL influences positively significantly toward CAR. But simultaneously CAR, BOPO, NIM, and NPL jointly affect the LDR.
A STUDY ON THE FINANCIAL PERFORMANCE OF FOREIGN COMMERCIAL BANKS IN SRI LANKA...ectijjournal
Banks serve as backbone to the financial sector, which facilitate the proper utilization of financial
resources of a country. The banking sector is increasingly growing and it has witnessed a huge flow of
investment. The banking sector of developing countries is different from the developed countries in term of
performance. The banking sector, especially commercial banks of Sri Lanka plays a vital role in the Sri
Lankan economy. The focus of this study was to investigate the financial performance of foreign
commercial banks in Sri Lanka. Many studies are conducted in different countries to study the financial
performance of banking sector using the various statistical methods. In this study, the CAMEL rating
system is used to study the financial performance of foreign commercial banks in Sri Lanka. The study
selects three foreign banks for the analysis. Data was collected for the time period of 2008-2014.
According to the findings foreign sector banks are good in the performance of capital adequacy and
earnings while other variables show an average performance.
A STUDY OF NON-PERFORMING ASSETS AND ITS IMPACT ON BANKING SECTORJournal For Research
Banks plays an important role in the economic development of a country. Banks are growth-driver and the banking business is exposed to various risk, such as credit risk, liquidity risk, interest risk, market risk, operational risk and management risk. Apart from these risks the very important risk is loan recovery. The sound financial position of a bank depends upon the recovery of loans or its level of Non-performing assets (NPAs). Reduced NPAs generally gives the impression that banks have strengthened their credit appraisal processes over the years and growth in NPAs involves the necessity of provisions, which bring down the overall profitability of banks. The Indian banking sector is facing a serious problem of NPA. The magnitude of NPA is comparatively higher in public sectors banks. To improve the efficiency and profitability of banks the NPA need to be reduced and controlled.
The purpose of this study is to determine the factors that influence risk management, capital, GCG,
and efficiency on the financial performance of Islamic commercial banks in Indonesia. The population in this
study were Islamic commercial banks in Indonesia and selected by purposive sampling and selected 10 Islamic
commercial banks.
EFFECTS OF MANAGEMENT PROFICIENCY ON FINANCIAL PERFORMANCE OF FOREIGN COMMERC...AkashSharma618775
The study sought to examine Management Proficiency on financial performance of foreign
commercial banks in Kenya from period of 2013 to 2019.
Design/Methodology/Approach; The return on equity (ROE) and return on asset (ROA) were used as measure on
measure of financial performance measures on foreign commercial banks in Kenya. The descriptive, correlation
and panel regression analysis based on fixed effect model with help STATA.
The Results; It indicated that an R squared of 0.6956 was obtained that implies that 69.56 percent of the variations
in financial performance of foreign commercial banks in Kenya was accredited to capital adequacy, asset quality
and management efficiency. A p-value of 0.0000 further endorsed that the variables that were used namely: capital
adequacy, asset quality and management efficiency had significant effect predicting the financial performance of
foreign commercial banks in Kenya. The model had a constant value of 0.87 thus inferred that in the absence of
capital adequacy, asset quality and management efficiency, the value of financial performance of foreign
commercial banks in Kenya was 0.87.
Originality/value: The main study objective was to provide the empirical evidence on management proficiency on
financial performance on foreign commercial banks in Kenya and demanded literature gaps
Financial Performance Analysis of Bank of Bhutan Limited using Regression Ana...ijtsrd
This study analyses the financial performance of the Bank of Bhutan Limited BOBL . To measure the performance of BOBL, the factors affecting the profitability of the bank have been analysed. The data for the study are collected from the published annual reports of BOBL for the period of 2009 2020. Regression analysis is used to evaluate the financial performance of the bank. Return on Investment ROI is used as a dependent variable, and Return on Assets ROA , Total Expense Ratio TER , Loans and Advances to Total Assets Ratio LTAR and Spread to Total Deposit Ratio STDR are used as independent variables. The findings of the study indicate that TER has a positive relationship with the profitability of BOBL whereas LTAR has a negative relation with BOBL’s profitability. Hence, it is concluded that among four independent variables, ROA and TER had significant impact on the profitability of BOBL. Dr. Aaditya Pradhan | Mr. Ugyen Thinlay "Financial Performance Analysis of Bank of Bhutan Limited using Regression Analysis" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-3 , June 2023, URL: https://www.ijtsrd.com.com/papers/ijtsrd58589.pdf Paper URL: https://www.ijtsrd.com.com/management/accounting-and-finance/58589/financial-performance-analysis-of-bank-of-bhutan-limited-using-regression-analysis/dr-aaditya-pradhan
A Comparative Analysis of Capital Structure between Banking and Non-Banking F...iosrjce
This research aims to compare the capital structure of Bangladeshi banking and non-banking
financial institutions through some measurements. The annual financial statements of 10 commercial banks and
10 non-bank financial institutions were used for this study which covers a period of five (5) years from 2009-
2013. The study assesses the capital structure of the banking and non-banking sectors measured by total debt
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t-test have been used to show the differences between banking and non-banking capital structure and
performance. However this study concludes that there is no significant difference between Bank and non-bank’s
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ROE.
An Impact of Capital Adequacy Ratio on the Profitability of Private Sector Ba...Dr. Amarjeet Singh
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Courier management system project report.pdfKamal Acharya
It is now-a-days very important for the people to send or receive articles like imported furniture, electronic items, gifts, business goods and the like. People depend vastly on different transport systems which mostly use the manual way of receiving and delivering the articles. There is no way to track the articles till they are received and there is no way to let the customer know what happened in transit, once he booked some articles. In such a situation, we need a system which completely computerizes the cargo activities including time to time tracking of the articles sent. This need is fulfilled by Courier Management System software which is online software for the cargo management people that enables them to receive the goods from a source and send them to a required destination and track their status from time to time.
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Indigenized remote control interface card suitable for MAFI system CCR equipment. Compatible for IDM8000 CCR. Backplane mounted serial and TCP/Ethernet communication module for CCR remote access. IDM 8000 CCR remote control on serial and TCP protocol.
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Indigenized remote control interface card suitable for MAFI system CCR equipment. Compatible for IDM8000 CCR. Backplane mounted serial and TCP/Ethernet communication module for CCR remote access. IDM 8000 CCR remote control on serial and TCP protocol.
• Remote control: Parallel or serial interface
• Compatible with MAFI CCR system
• Copatiable with IDM8000 CCR
• Compatible with Backplane mount serial communication.
• Compatible with commercial and Defence aviation CCR system.
• Remote control system for accessing CCR and allied system over serial or TCP.
• Indigenized local Support/presence in India.
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Advancements in technology unveil a myriad of electrical and electronic breakthroughs geared towards efficiently harnessing limited resources to meet human energy demands. The optimization of hybrid solar PV panels and pumped hydro energy supply systems plays a pivotal role in utilizing natural resources effectively. This initiative not only benefits humanity but also fosters environmental sustainability. The study investigated the design optimization of these hybrid systems, focusing on understanding solar radiation patterns, identifying geographical influences on solar radiation, formulating a mathematical model for system optimization, and determining the optimal configuration of PV panels and pumped hydro storage. Through a comparative analysis approach and eight weeks of data collection, the study addressed key research questions related to solar radiation patterns and optimal system design. The findings highlighted regions with heightened solar radiation levels, showcasing substantial potential for power generation and emphasizing the system's efficiency. Optimizing system design significantly boosted power generation, promoted renewable energy utilization, and enhanced energy storage capacity. The study underscored the benefits of optimizing hybrid solar PV panels and pumped hydro energy supply systems for sustainable energy usage. Optimizing the design of solar PV panels and pumped hydro energy supply systems as examined across diverse climatic conditions in a developing country, not only enhances power generation but also improves the integration of renewable energy sources and boosts energy storage capacities, particularly beneficial for less economically prosperous regions. Additionally, the study provides valuable insights for advancing energy research in economically viable areas. Recommendations included conducting site-specific assessments, utilizing advanced modeling tools, implementing regular maintenance protocols, and enhancing communication among system components.
Saudi Arabia stands as a titan in the global energy landscape, renowned for its abundant oil and gas resources. It's the largest exporter of petroleum and holds some of the world's most significant reserves. Let's delve into the top 10 oil and gas projects shaping Saudi Arabia's energy future in 2024.
Cosmetic shop management system project report.pdfKamal Acharya
Buying new cosmetic products is difficult. It can even be scary for those who have sensitive skin and are prone to skin trouble. The information needed to alleviate this problem is on the back of each product, but it's thought to interpret those ingredient lists unless you have a background in chemistry.
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Data file handling has been effectively used in the program.
The automated cosmetic shop management system should deal with the automation of general workflow and administration process of the shop. The main processes of the system focus on customer's request where the system is able to search the most appropriate products and deliver it to the customers. It should help the employees to quickly identify the list of cosmetic product that have reached the minimum quantity and also keep a track of expired date for each cosmetic product. It should help the employees to find the rack number in which the product is placed.It is also Faster and more efficient way.
Industrial Training at Shahjalal Fertilizer Company Limited (SFCL)MdTanvirMahtab2
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Overview of the fundamental roles in Hydropower generation and the components involved in wider Electrical Engineering.
This paper presents the design and construction of hydroelectric dams from the hydrologist’s survey of the valley before construction, all aspects and involved disciplines, fluid dynamics, structural engineering, generation and mains frequency regulation to the very transmission of power through the network in the United Kingdom.
Author: Robbie Edward Sayers
Collaborators and co editors: Charlie Sims and Connor Healey.
(C) 2024 Robbie E. Sayers
Liquidity Management and Its Impact on Banks Profitability: A Perspective 0f Pakistan
1. International Journal of Business and Management Invention
ISSN (Online): 2319 – 8028, ISSN (Print): 2319 – 801X
www.ijbmi.org || Volume 6 Issue 5 || May. 2017 || PP—28-33
www.ijbmi.org 28 | Page
Liquidity Management and Its Impact on Banks Profitability: A
Perspective 0f Pakistan
Muhammad Nabeel1
, Sobia Muhammad Hussain2
1, 2
Department of management sciences University of Gujrat sub campus Narowal.
Abstract: The basic purpose of this research is to examine the effect of liquidity management on profitability in
the banking sector of Pakistan. Liquidity management is independent and profitability is dependent variable.
The secondary data used for this study and taking from publish annual report of ten banks (2006-2015). The
data was analyzed by using correlation, descriptive statistics and regression techniques run on E-views. The
quick, current, cash, interest coverage and capital adequacy ratios is taken as dimension of liquidity and return
on assets, return on equity, and earnings per share as dimension of profitability. The research findings show
that interest coverage, capital adequacy and quick ratio has a positive whereas the cash and current ratio has
negative relationship with banks profitability.
Key words:Liquidity management, Banks profitability, quick ratio, current ratio, cash ratio, interest coverage
ratio, capital adequacy ratio, return on assets, return on equity, earning per share.
I. INTRODUCTION
This study evaluates the effects of liquidity management on the profitability in the banking sector of
Pakistan. Liquidity management involves liquidity ratios and banks profitability involves profitability ratio.
Liquidity can be defined as the assets or securities which can be easily convertible into cash. Liquidity refers to
the short term assets (cash, short term advances, and balance with other bank) and short term liabilities (short
term borrowing, account payable, lending to financial institution and short term deposits). Liquidity explains the
company capability to cope with it short duration liability because it plays vital role in defining how efficiently a
firm manage its short duration requirement and invest the cash to rise the profitability of the organization. In
banking sector the liquidity management is significant element that will be considered to determine the bank’s
profitability. Liquidity management is essential for banks effectiveness and profitability. There are different
studies that explain the liquidity management and its effect towards the profitability in banking sector.
The profitability is defined as the ability of the firm to generate the profit to uses it resources. Under
this study profitability shall be appraise in relation to the liquidity. The basic goal of any firm is to generate and
to enhance the profit of the firm, so it is compulsory to utilize its resources efficiently. There is need firm shall
determine and maintain optimum level of liquidity. Therefore, there is significant relationship between liquidity
management and profitability. Because the need to fulfill the short term requirement of cash and there is also
need to have some amount in liquid form to exploit the investment opportunity for gain.
Banking sector perform an essential role in business sector and economy of any country. Bank is a
financial institution who deposits the saving of public and gives loan to people, other institutions, organization
and Govt. etc. and also make investment to get the return. Thus, to get maximum benefit there is need to
effective use of resources. To achieve maximum benefit the bank should find out the highest level of funds to
fulfill the short term obligations and then make the investment of further funds and also have some funds to get
gain form investment opportunity. Because by effectively manage liquidity banks can increase the profitability.
The ten famous banks is taken into consideration for this research which include, Habib bank, allied, Bank al
Falah, Faysal, National, United , Soneri, Askari, Muslim commercial bank and Punjab bank limited. The data of
such banks is taken easily from their annual reports.
II. OBJECTIVE
The goal of this study is to analyze the effect of liquidity management on the profitability of banks. The
results of such study will also addition to literature by showing the response of liquidity management with
regard to the bank’s profitability.
III. LITERATURE REVIEW
Literature review includes the previous studies that are related of our research that plays a significant
role in conducting any type of research. Because the researchers by taking guidelines form such studies can
make our research more valuable. The few studies that are related our research is given below:
Maqsood et al. (2016)explained that there is significant impact of liquidity management on the
profitability in the banking sector. The data that is used in this is taken from financial statement of 8 different
2. Liquidity Management and Its Impact On Banks Profitability: A Perspective 0f Pakistan
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banks from 2004 to 2015. The regression and correlation technique is used in this study. To look the liquidity it
uses the current and cash ratio as independent variable and to measure the profitability uses the return on assets
as dependent variable.
Ikeora and Andabai (2016) finds that there is positive relationship between the dependent (profitability)
and independent variable (liquidity management) using time series data spanning (1989-2013). Liquidity
management includes the broad money supply and aggregate bank deposits and profitability is measure by
return on assets ratio. Ordinary least square (OLS) econometrics method was used to analysis the hypothesis.
Data were collected from the Central Bank of Nigeria Statistical Bulletin and National Bureau of Statistics of
various years.
Salim and Bilal (2016) explains that there is meaningful relationship between the bank’s Liquid
assets/deposits; Liquid assets/Short term liabilities and return on equity. The study finds significant relationship
between the bank’s Loans/ Total assets, Loans/ Deposits & short term liabilities, Bank’s loans – customer
deposits/ Total assets and return on assets. The study also finds that no meaningful relationship between Omani
bank liquidity position and NIM (net interest margin). The data was collected from the financial statement of
four banks to examine the relationship between the liquidity and financial performance of five period of 2010-
2014. The data was analyzed by using multiple regression analysis.
Ali abdi sheikhdon and kavale (2016) concluded that there was a significant linear relationship between Account
receivable management, Account payable and cash management on the performance of commercial banks in
MOGADISHU. Questionnaire was used as a method of data collection. The target population was 112
employees of commercial banks in Mogadishu. The sample size of 87 respondents was selected using slog van’s
formula. By using SPSS version the data was analyzed.
Khan and Mutahhar Ali (2016) narrated that there is positive relationship between the liquidity and
profitability. The current ratio and quick ratio was consider as measure of liquidity and Gross profit margin and
Net profit margin ratios were consider as measure of profitability. The data was taken from annual account of
HABIB Bank Limited of last five year (2008-2014). SPSS was used to analyze the data.
Nedunchezhian and Premalatha (2015) researched that there is no significant relation between the cash
at bank, and return on assets. And there is narrated that there is no significant relation between the advance total
assets and return. The sample size was taken 5 banks out of 20 in India.
Alshatti (2015) invested that there is relationship between the liquidity management on profitability in
the Jordanian commercial banks during the time period (2005–2012). The research paper taking the investment
ratio, capital ratio, liquid ratio, net credit facilities/ total assets and quick acid ratio as to measure the liquidity
management independent variable and return on assets and return on equity to measure the profitability
dependent variable. Quantitative approaches and ratio analysis were used to analysis the data. The study
explains that the impact of investment and quick ratio is positive on profitability when it measure by return on
equity and the impact of capital ratio is also positive when it is measure by return on assets and the impact of
other independent variable is negative on the two measure of profitability (Return on assets and Return on
equity).
Almazari (2014) examines the internal factor that have an effect on profitability of banks that are in
Saudi and Jordanian. He concluded that some liquidity indicators have positive correlation between profitability
and some have negative correlation between profitability measured by ROA of Saudi and Nigerian banks.
Akter and Mahmud (2014) examine the relationship between the liquidity and profitability. The
profitability is measured as return on assets ratio and the liquidity is measured as current ratio. The data for this
study is taken from the specific commercial banks income statements and balance sheets of published in the
website of such bank. The twelve specific banks were taken as sample. For analysis of data a number of
techniques were used which includes the Correlation technique; regressions & descriptive statistics and (SPSS)
16.0 Version. The overall findings of this study are that there is no significant relationship exists between
liquidity and profitability in all the categories on banks in Bangladesh.
Ibe (2013) discusses that the liquidity management is an important problem in the Nigeria. There is
need for banks to examine the optimal liquidity position to resolve such problem. The data is collect from three
banks which is selected randomly represent the whole banking sector of Nigeria. Profitability represents the
after tax profit dependent variable and the liquidity management is independent variable which include the Bank
cash assets (CA), Bank Balance, Treasury Bills and certificate. Regression is used to analysis the data.
Al-Nimer et al. (2013) finds that there is a significant relationship between the liquidity and Jordanian
banks profitability. The study examines the liquidity (independent variable) as a quick ratio and the profitability
(dependent variable) as return on assets. The data is collected from 15 Jordanian banks which are listed at
Amman Stock Exchange (ASE) for the period of 2005-2011. Simple regression model were used to analysis the
data. And the result shows that the profitability is highly influenced by liquidity in the Jordanian banks.
Agbada and Osuji (2013)investigate empirically the impact of efficient liquidity management on the
performance of banks in Nigeria. The findings of this research show that there is significant relationship
3. Liquidity Management and Its Impact On Banks Profitability: A Perspective 0f Pakistan
www.ijbmi.org 30 | Page
between the efficient liquidity management and the performance of banking sector and with the efficient
liquidity management the soundness of bank enhance.
Arif and Nauman Anees (2012) concluded that there is meaningful impact of liquidity risk factors on
the profitability of banks. Such study includes 22 Pakistani banks during the period of 2004-2009 to examine the
impact of liquidity risk factor on the Pakistani banks.
Olagunju et al. (2011) stated that profitability in commercial banks is influenced by liquidity. This
means that liquidity increase, profitability decrease and vice versa. In order to achieve the object of the study
both structured and unstructured questionnaires were used. The data is collect from the management and
financial statement of sampled banks. Primary and secondary data used in this study. The Pearson correlation
data analysis technique is used to analysis the data.
Saleem and Rehman (2011) explain the relationship of liquidity and profitability. The results show that
there is significant effect of the each ratio on the financial position of enterprise. This study also explains that
profitability plays an important role in the financial position of enterprise.
Bordeleau and Graham (2010) narrated that profitability is for banks which hold some liquid assets and
the banks which have more liquid assets their profitability goes to diminish. The large banks of U.S and
Canadian were used as a sample in this study.
IV. CONCEPTUAL FRAMEWORK
Source: Model developed by authors.
V. HYPOTHESIS
Hypothesis of any study is considered as basis of the research and these hypotheses are tested to find the
conclusion of the research. The hypotheses of the research are:
H0: Liquidity management and profitability does not relate each other.
H1: Liquidity management and profitability has significant and positive relationship each other.
H2: Interest coverage ratio, Quick ratio and capital adequacy ratio have positive and significant relationship
with banks profitability.
H3: Current ratio has negative and significant relationship with banks profitability.
VI. DATA AND METHODOLOGY
This study point out the reaction of liquidity management on the performance of banking sector of
Pakistan using different liquidity and profitability ratios. Liquidity ratio include the current, Quick, Cash,
Capital Adequacy and interest coverage ratios and profitability include the return on assets (ROA), return on
equity (ROE), Earning per share (EPS).
The liquidity management shall be evaluating as independent variable and profitability as dependent
variable. The ten bank is taken as the sample for this research as proxy of the whole banking sector.
The data regarding such research is collected from annual report (financial statement) of last ten year
(2006-2016) of ten banks, Habib bank limited, allied, Bank al Falah, Faysal, National, United , Soneri, Askari,
Muslim commercial bank limited and Punjab bank limited. The required ratios were extracted from consolidated
and unconsolidated financial statement of these banks. The data has been analysis by using E-views. The
correlation,descriptive statistics and regression (Panel Least Squares) were used to examine the nature of
relationship between the dependent (profitability) and independent variable (liquidity management).
VII. RESEARCH MODELS
The following three models represent the research models:
4. Liquidity Management and Its Impact On Banks Profitability: A Perspective 0f Pakistan
www.ijbmi.org 31 | Page
In each model determines the effect of banks profitability on liquidity management in Pakistan. The liquidity is
check out by five different liquidity ratios and banks profitability is check out by three different profitability
ratios.
Table I. Determinants of Liquidity Management and Banks profitability
Determinants Variable Measures Notations
Profitability
Return on assets Net profit / Average Total assets ROA
Return on equity Net profit / Average Total Equity ROE
Earnings per share Profit attributable to equity holder / No. of share outstanding EPS
Liquidity Management
Current Ratio Current Assets / Current Liabilities CR
Quick Ratio Quick Assets / Current Liabilities QC
Cash Ratio Cash / Current Liabilities CASR
Capital Adequacy ratio Total eligible regulatory capital held /Total risk weighted assets CADR
Interest coverage Ratio Profit before interest and tax / Total interest expenses CAR
VIII. RESULTS
Table II. The descriptive statistics results display that return on equity and earning per share have
greatest average values while cash ratio has lowest average value. This descriptive statistics table also shows
that standard deviation is also highest for the return on equity whereas cash ratio has the lowest standard
deviation value. The greatest difference of maximum and minimum is also for return on equity. Capital
adequacy has the highest mean and return on equity.
Table II. Descriptive statistic
Variable Mean Maximum Minimum Std. Dev.
ROA 1.317245 3.790000 -5.000000 1.336049
ROE 12.14622 37.90000 -203.0200 27.76699
EPS 8.096020 26.17000 -83.05000 12.65827
QC 0.412959 1.110000 0.120000 0.175330
CR 1.574449 3.710000 0.530000 0.590412
CASR 0.264745 0.530000 0.110000 0.084720
ICR 1.731122 4.830000 -4.750000 1.134894
CADR 13.52796 22.25000 1.080000 4.014363
The table III shows the regression results taking return on assets as dependent variable. The results
show that interest coverage, capital adequacy, return on equity and earning per share ratios has significant and
positive relationship with banks profitability. Current and quick ratio demonstrates the positive and insignificant
relationship with profitability. And cash ratio has negative and insignificant relationship with bank’s
profitability.
Table III. Dependent variable: ROA
Variable Coefficient t-Statistic Prob.
C -1.031811 -3.963724 0.0001
ROE 0.006351 2.343548 0.0213
EPS 0.011021 2.175412 0.0322
QC 0.447704 0.901354 0.3698
CR 0.101322 0.775847 0.4399
CASR -0.962194 -1.056766 0.2934
ICR 0.786354 10.80545 0.0000
CADR 0.054091 3.204463 0.0019
R-squared 0.924398
F-statistic 157.2060
Prob(F-statistic) 0.000000
5. Liquidity Management and Its Impact On Banks Profitability: A Perspective 0f Pakistan
www.ijbmi.org 32 | Page
Table: IV. Regression results taking return on equity as dependent variable shows that interest coverage and
quick ratios shows the significant and positive relationship with banks profitability. While the cash and current
ratio has negative and insignificant relationship with banks profitability. The capital adequacy has negative but
significant relationship with banks profitability. Return on equity and earning per share has positive and
significant impact on banks profitability.
Table IV.Dependent variable: ROE
Variable Coefficient t-Statistic Prob.
C 15.55364 1.477489 0.1430
ROA 9.056617 2.343548 0.0213
EPS 0.339202 1.757551 0.0822
QC 27.07175 1.453555 0.1495
CR -6.989391 -1.428419 0.1566
CASR -47.96057 -1.401308 0.1646
ICR 10.38067 2.582800 0.0114
CADR -1.739461 -2.686956 0.0086
R-squared 0.750383
F-statistic 38.65041
Prob(F-statistic) 0.000000
The table V shows the regression results by considering the earning per share as dependent variable.
The results show that quick assets and cash ratio has positive but insignificant impact on banks profitability
when it measure by earning per share. The current and interest coverage ratio shows negative and insignificant
relationship with bank profitability. Finally the capital adequacy, return on equity and return on assets has
significant and positive relationship with banks profitability.
Table V.Dependent variable: EPS
Variable Coefficient t-Statistic Prob.
C -11.80975 -2.114751 0.0372
ROA 4.532824 2.175412 0.0322
ROE 0.097827 1.757551 0.0822
QC 2.066328 0.204257 0.8386
CR -2.580020 -0.976017 0.3317
CASR 14.92812 0.806363 0.4222
ICR -2.601019 -1.171572 0.2445
CADR 1.220143 3.613408 0.0005
R-squared 0.653596 8.096020
F-statistic 24.25887 2.303212
Prob(F-statistic) 0.000000
Table: VI. The correlation results display return on equity is positively associate with return on assets
at percentage of 0.83. And earning per share, quick, interest coverage and capital adequacy ratios has positive
relationship with dependent variables return on assets and return on equity. The current ratio and cash ratio has a
negative relationship with dependent variable(return on assets and return on equity. Moreover, the results also
indicate that the quick ratio, current ratio, cash ratio has a negative relationship with earning per share.
Table VI. Correlation
Variable ROA ROE EPS QC CR CASR ICR CADR
ROA 1.000000
ROE 0.828992 1.000000
EPS 0.748812 0.642130 1.000000
QC 0.011680 0.001186 -0.076368 1.000000
CR -0.326700 -0.326589 -0.377925 0.767829 1.000000
CASR -0.040272 -0.109042 -0.056251 0.836995 0.715263 1.000000
ICR 0.945801 0.831452 0.688426 0.026505 -0.310779 -0.024304 1.000000
CADR 0.716949 0.507504 0.724680 -0.247778 -0.509405 -0.147426 0.658936 1.000000
6. Liquidity Management and Its Impact On Banks Profitability: A Perspective 0f Pakistan
www.ijbmi.org 33 | Page
IX. C
ONCLUSIONS:
The basic aim of such is to explore the relationship between liquidity independent variable and
profitability dependent variable. The data is taken from annual reports of ten banks from 2006-2015. The data is
analyzed by usingcorrelation and regression run through E-views 9.5. The results show that most liquidity ratios
has positive and some liquidity ratios has negative relationship with the bank’s profitability.
The findings of such study clarify that interest coverage ratio has positive and significant relationship
with banks profitability when it analyzed with return on assets and return on equity. The capital adequacy ratio
has positive and significant relationship with return on equity and earning per share. The quick ratio has positive
relationship with profitability. The current ratio suggest the positive but insignificant relationship when look the
relationship with return on assets. And current ratio suggests the negative and significant relationship with
return on assets and negative and insignificant with earning per share. Therefore, the overall results explain that
liquidity management has positive related with banks profitability. The research results also relate to the
previous studies conducted by various scholars.
REFERENCES
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Analysis. . journal of business management and economics 4 ( 7):01-05.
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International Journal of Applied Business and Economic Research 14 (1):545-565.
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Compliance 20 (2):182-195.
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[16]. Saleem, Q., and R. U. Rehman. 2011. Impacts of liquidity ratios on profitability. Interdisciplinary Journal of Research in Business
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[17]. Bordeleau, É., and C. Graham. 2010. The impact of liquidity on bank profitability: Bank of Canada working paper.
[18]. Loo, M. A. 2007. A survey of liquidity management approaches and their effect on Profitability of commercial banks in Kenya,
University of Nairobi.