Analysis of Credit Risk, Efficiency, Liquidity, and Profitability of Selected Non-Bank Financial Institution: An Empirical Study
DOI:
https://doi.org/10.18533/job.v2i2.70Keywords:
Loan to Deposit Ratio, Net Interest Margin, Non-Bank Financial Institutions, Non-Performing Loans, Return on Assets.Abstract
Financial Institutes are the lifeblood of the financial system of any country that plays an intermediary between the surplus and deficit unit of any society. So the efficiency and performance of a financial institution is the indication of sound financial system. In this study the authors are trying to analyze the factors such as credit risk, efficiency, liquidity, and profitability; which affect the performance of non-bank financial institutions. The methods used are descriptive with secondary data from financial statements of Non-Bank Financial Institutions from 2010 to 2015. Linear regressions, ANOVA, hypothesis testing while using F-test to examine the effect of variables simultaneously with a significance level of 5 %. Based on the results it is concluded that partial NPM and ROA have positive and significant effects on LDR. NPL has a negative effect of loan to deposit ratio. The amount of the contribution or influence variable of NIM, OPM, NPM, ROA, ROE and NPL to the dependent variable of LDR is 87.45% while the remaining 12.55% thought to be influenced by other variables not examined in this study.
References
Adhikari B. K. (2007), “Nonperforming Loans in the Banking Sector of Bangladesh: Realities and Challengesâ€, BIBM.
Buchory, H. A.(2006),“The Influence of Financial Intermediary Function Implementation, Risk Management Application and Bank Capital Structure on Banking Financial Performanceâ€DisertasiFakultasEkonomi, UniversitasPadjadjaran Bandung.
Buchory, H. A. (2014), “Analysis of the Effect of Capital, Net Interest Margin, Credit Risk and Profitability in the Implementation of Banking Intermediationâ€, European Journal of Business and Management, ISSN 2222-1905 (Paper), Vol.6, No.24, 2014.
Haneef, S., and Riaz, T. (2012), “Impact of Risk Management on Non-Performing Loans and Profitability of Banking Sector of Pakistanâ€, International Journal of Business and Social Science, Vol. 3 No. 7.
Haruna, Muhammad Auwalu, (2011)“Determinant of Cost of Financial Intermediation in Nigeria’s Pre-consolidated Banking Sectorâ€, Department of Accounting Ahmadu Bello University, Zaria, Nigeria.
M. K. Dash, 2010 “The Determinants of Non-Performing Assets in Indian Commercial Bank: An Econometric Studyâ€.
Mishkin, Frederic S. and Stanley G. Eakins, (2006),“Financial Market & Institutionsâ€, Fifth Edition, New York :Peaerson, Addison Wesley
Odedokun, M.O. (1998),“Financial intermediation and economic growth in developing countriesâ€, Journal of Economic Studies, Vol. 25 Issue : 3 p. 203 – 224.
Rahman Q. M. (2012), “All about non-performing loan: The Bangladesh scenarioâ€.
Rahman, S. (2016), “Three non-banks weigh down entire sectorâ€, The Daily Star, August 14, 2016; http://www.thedailystar.net/business/three-non-banks-weigh-down-entire-sector-1269451.
Rajan, R., and Sarat, C. D. (2003), “Non-performing Loans and Terms of Credit of Public Sector Banks in India: An Empirical Assessmentâ€, 24(3), 81-121
Saba, I. Kouser, R. and Azeem, M. (2012), “Determinants of Non-Performing Loans: Case of US Banking Sectorâ€, Volume Number 44.
Sinkey, J. F. and Mary B. G. (1991), “Loan-Loss Experience and Risk-Taking Behavior at Large Commercial Banks†Journal of Financial Services Research.
Tracey, M. (2011), “The Impact of Non-performing Loans on Loan Growth: an econometric case study of Jamaica and Trinidad and Tobagoâ€.
Wallich, C.I. (2006), “Status of Non-performing Loans in Banking Sector in Bangladeshâ€, 1st Edition.
Downloads
Published
Issue
Section
License
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
