Banks and Bank Systems

Journal Information
ISSN / EISSN : 18167403 / 19917074
Current Publisher: LLC CPC Business Perspectives (10.21511)
Total articles ≅ 230
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Latest articles in this journal

Haider Mohammed Ali Bani Ata
Banks and Bank Systems, Volume 14, pp 9-19; doi:10.21511/bbs.14(3).2019.02

Abstract:The national as well as global economy is significantly affected as a result of financial bankruptcy. Therefore, identifying the rates of bankruptcy would be helpful to inspect the reasons for its failure. The present study aims to investigate different ways for the successful treatment of financial bankruptcy based on Islamic teachings, appropriate methods and techniques in handling bankruptcy.The study gathered views of CFOs operating in Al-Hassan Industrial Estate and the views of Islamic banks’ staff working in investment sections through a questionnaire. Analytical statistical procedures were applied to test the hypotheses. The results emphasized the importance of administration, Zakat funds, creditors, and suppliers in addressing financial bankruptcy. The management of Zakat in addressing the financial bankruptcy occupied the highest importance, i.e. 88%. However, lowest relative importance (46%) was achieved by commitment of funds debtors to collect Zakat and distribution in the treatment of financial bankruptcy. The time and opportunity granted by the creditors to individuals and enterprises during bankruptcy hold much importance. The study has recommended establishment of a system derived from Sharia to overcome the financial difficulties.
Stephen Ojeka, Alex Adegboye, Dorcas Titilayo Adetula, Kofo Adegboye, Inemesit Udoh
Banks and Bank Systems, Volume 14, pp 1-8; doi:10.21511/bbs.14(3).2019.01

Abstract:The study investigates the influence of International Financial Reporting Standards adoption, using accounting performance measure, to determine the CEO pay in listed banks in Nigeria. The audited annual financial statements of listed banks in Nigeria covering the period of 2009–2015 are analyzed. Fixed effect model, viz panel data analysis is adopted to establish the findings. The findings indicate that adoption of IFRS in Nigeria results in an inverse relationship with accounting performance in determining the CEO compensation after controlling for firm and corporate governance mechanism. However, the adoption of IFRS shows significant positive influence on the CEO pay. This result has policy implication, which encourages the regulatory agencies like Central Bank of Nigeria to monitor the compliance of all banks in Nigeria to the IFRS adoption.
Olena Fomina, Olena Moshkovska, Olena Avhustova, Olha Romashko, Daria Holovina
Banks and Bank Systems, Volume 14, pp 203-213; doi:10.21511/bbs.14(2).2019.18

Abstract:Various mechanisms for implementation, and at the same time contradictory approaches to the essence, evaluation, reflection, and regulation, led to the need to consider and improve approaches to the recognition of cryptocurrency. Based on the critical analysis of the legal provisions in Ukraine and the approaches of scientific experts, practitioners and international experience, the economic essence of cryptocurrency is substantiated. The legal, economic and accounting aspects of cryptocurrency recognition in developed and transformational economies are revealed. In order to meet the information needs of users, the peculiarities of the application of methods for estimating cryptocurrency commodities and the influence of the chosen method on the reflection of such an asset in the financial statements have been identified. The necessity to clarify and harmonize existing national accounting standards for recognizing and reporting on cryptocurrency transactions has been identified. The proposed approach to the identification and recognition of cryptocurrency goods will improve the relations between the owners of cryptocurrency and the state, legalize cryptocurrency transactions and form an effective system for managing such transactions in Ukraine.
Svitlana Yehorycheva, Tetiana Gudz, Mykhailo Krupka, Oleh Kolodiziev, Nataliіa Tarasevych
Banks and Bank Systems, Volume 14, pp 190-202; doi:10.21511/bbs.14(2).2019.17

Abstract:The financial equilibrium (“financial health”) of the enterprises is a prerequisite for their sustainable development, which ensures macroeconomic stability of the economy and the welfare of the state. It should be supported by the banking system, which performs the function of the effective reallocation of capital. Recently, the Ukrainian banking system itself is in a challenging situation and is undergoing a period of transformation. The purpose of the study is to assess how sufficiently the banking system of Ukraine supports the financial equilibrium of enterprises and to find the possibilities to strengthen its role in the progress of the real sector of economy. The authors single out three stages of financial equilibrium growth; each of them can be supported by the relevant banking services. The empirical analysis proves that the Ukrainian banks successfully ensure only the first stage, namely, liquidity balancing. To quantitatively assess the role of the banking system in supporting the enterprises’ financial equilibrium, a multivariate regression applying mathematical gnostic analysis in the program shell R Console is used. The research makes it possible to find out that only the economy monetization, the share of time deposits of economic entities and growth rate of mortgage loans have a positive effect. The authors conclude that the problems of both enterprises and the banking system are in the sphere of development and implementation of government economic policy and are aggravated by the restrictive monetary policy.
Andras Takacs, Tamas Szucs
Banks and Bank Systems, Volume 14, pp 174-180; doi:10.21511/bbs.14(2).2019.15

Abstract:Earnings quality (EQ) is an indicator generally defined as a mix of many components like persistence, predictability, volatility and smoothing of earnings. This study is based on the hypothesis that in the banking sector, any changes in interest rates make a remarkable effect on these characteristics of earnings, and thus may influence EQ. Between 2007 and 2015, there has been a general decreasing trend in interest rates across Europe, with varying slopes in different countries. Using data of 128 European banks from 27 countries, it is examined how the extent of interest rate decrease influenced the EQ of banks. It was found that the extent of interest decrease negatively affects earnings quality, meaning that the EQ of banks located in countries with less drastic relative interest cuts between 2007 and 2015 (typically less developed Central and Eastern European countries) is higher than the EQ of banks from developed countries with significant relative interest cuts in the same period.
Damilola Felix Eluyela, Dorcas Titilayo Adetula, Olusegun Barnabas Obasaju, Emmanuel Ozordi, Olamide Akintimehin, Olabisi Popoola
Banks and Bank Systems, Volume 14, pp 181-189; doi:10.21511/bbs.14(2).2019.16

Abstract:This paper aims to examine the influence foreign and indigenous directors have on determining firms’ dividend payout structure. The population for this study is the fifteen deposit money banks listed on the Nigerian Stock Exchange. Using a random sampling technique, a sample of 14 deposit money banks for the 2010 to 2017 period was taken. The total observations used for the work was 112. The study adopted a panel data methodology, which was estimated with a random-effect model. It was observed that a significant relationship exists between foreign directors and the dependent variable (dividend payout structure). The dividend payout structure by dividend per share of sampled firms was measured. This study will improve analysts and investors’ understanding of dividend policy by giving them insights in identifying the main determinants of dividend policy. For policy makers, this study reinforces the fact that good corporate governance is important to develop financial markets and improve the firm value.
Joseph Andy Hartanto, Sulaksono Sulaksono
Banks and Bank Systems, Volume 14, pp 164-173; doi:10.21511/bbs.14(2).2019.14

Abstract:This paper provides an overview of the law and a statute regarding the notary’s responsibility toward the authenticity of credit bank guarantee in Indonesia, and compares them with those of other nations, including the United States of America and Germany. This study uses a combination of primary and secondary sources to assess the current state of the notary responsibility situation regarding banks and the financial lending world in general and employs a normative or doctrinal approach that views laws as a system of norms. The functions of notaries in Indonesia are different from those performed by notaries in some other countries, the notaries play different roles and participate in many formalities: a) a function in credit banking bind guarantees that not only allow people to feel comfortable with their transactions, but also increase public trust in the whole banking system; b) personal and material guarantees. In transacting any deeds, including credit bank guarantees, the notary is responsible for the authenticity of the physical, formal and material aspects of the deed; c) the binding of collateral objects; d) a function in binding banking credit guarantees. Also, notaries have the risk of illegal jurisdiction of a banking credit guarantee deed. Notaries in Indonesia have different roles compared to other countries, including the United States of America and Germany. Notaries play an important role in increasing economic growth, especially through their responsibility for the authenticity of credit bank guarantees activity and they add to the overall body of knowledge.
Emre Esat Topaloglu, Turhan Korkmaz
Banks and Bank Systems, Volume 14, pp 152-163; doi:10.21511/bbs.14(2).2019.13

Abstract:This study is aimed to analyze the relationship between the use of derivative financial instruments for speculative and hedging purposes and systematic risk. The effect of the use of derivatives by seven banks trading on Borsa Istanbul during the period of June 2007 – December 2017 on systematic risk was studied using panel cointegration, causality and regression analyses. Banking sector was examined within the scope of the study, since the level of use of derivatives is high in this sector. It was identified in the study that there is a long-run cointegration relationship between the use of derivatives and systematic risk. It was also identified that there is a significant and negative relationship between the use of derivatives for speculative purposes and systematic risk. Furthermore, it was determined that there is a one-way causality relationship from the use of derivatives for speculative purposes towards systematic risk. However, there was no relationship identified between the use of derivatives for hedging purposes and systematic risk. On the other hand, significant and negative relationship was identified between swap transactions that banks use for speculative purposes and systematic risk, while there was no significant relationship determined between forward and option contracts and systematic risk.
Abdul Aziz A. Abdul Rahman
Banks and Bank Systems, Volume 14, pp 140-151; doi:10.21511/bbs.14(2).2019.12

Abstract:This study aims to test the impact of strategic planning on enhancing the strategic performance of Bahraini banks. The study has two variables. The strategic planning as an independent variable includes a group of four perspectives, namely environmental scanning, strategy formulation, strategy implementation, and strategy evaluation. The strategic performance as a dependent variable also includes a group of four perspectives: financial, customer, internal business process, and learning and growth. The sample of the study consists of the employees of 10 of all the 12 commercial banks in Bahrain. A questionnaire was developed to gather the data. Five questionnaires were distributed to each bank totaling 50 questionnaires. The results showed that the strategic planning has a good statistically significant impact on financial, customer, and learning and growth. The results also showed a medium statistically significant impact of strategic planning on internal business process. The research recommended focusing on all aspects of the strategic performance in the banks under study, specifically the internal business process perspective.
Reon Matemane, Rozane Wentzel
Banks and Bank Systems, Volume 14, pp 128-139; doi:10.21511/bbs.14(2).2019.11

Abstract:The recent development of integrated reporting intends to address the limitations associated with corporate reporting practices. This paper aims to examine whether a statistically significant relationship exists between integrated reporting quality and financial performance. Secondary data was used, namely the integrated reports and annual financial statements of South African banks listed on the Johannesburg Stock Exchange (JSE) for 2010–2014. For the period 2005–2009, only the financial statements were used, since integrated reporting was not yet mandatory. The research design was longitudinal and it combined qualitative and quantitative methods. Descriptive statistics and Feasible Generalized Least Square (FGLS) were used to explore the relationships between financial performance and integrated reporting quality. The results indicate that there is a positive relationship between integrated reporting quality (IRQ) and earnings per share (EPS). However, there is no significant relationship between IRQ and Tobin’s q (Q-Ratio), IRQ and return on equity (ROE), IRQ and return on assets (ROA) as well as IRQ and economic value added (EVA). Moreover, there are no significant differences on the financial performance of the listed banks before and after the introduction of integrated reporting.