Banks and Bank Systems

Journal Information
ISSN / EISSN : 18167403 / 19917074
Current Publisher: LLC CPC Business Perspectives (10.21511)
Total articles ≅ 219
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Hassan M. Hafez, Mona Halim
Banks and Bank Systems, Volume 14, pp 50-62; doi:10.21511/bbs.14(2).2019.05

Abstract:The purpose of this study is to investigate the efficiency of two different banking systems operating in Egypt (Islamic versus conventional banks). A sample of 35 banks has been used to examine the technical efficiency before and after the financial crisis using data envelopment analysis model. Evaluating the technical efficiency of Egyptian banks will enable policymakers to support which banking system is more efficient to facilitate the financial inclusion and enhance the economic development.Before the financial crisis, conventional banks outperformed conventional banks with Islamic windows and Islamic banks, scale technical efficiency outperformed pure technical efficiency when analyzing conventional banks and conventional banks with Islamic windows. In terms of Islamic banks, pure efficiency outperformed scale efficiency. After the financial crisis, technical efficiency of all banks decreased. However, pure technical efficiency of Islamic banks has improved as a result of the quality of management and outperformed both conventional banks and conventional banks with Islamic windows. These results imply that Islamic banks have not been affected by the financial crisis. Therefore, the increased adoption and support of the Islamic banks in Egypt is addressed to develop the economy and push forward entrepreneurship projects, support the financial inclusion and the informal economy integration.
Svitlana Mishchenko, Svitlana Naumenkova, Volodymyr Mishchenko, Viktor Ivanov, Roman Lysenko
Banks and Bank Systems, Volume 14, pp 40-49; doi:10.21511/bbs.14(2).2019.04

Abstract:The slowdown in economic development caused by the reduction in the efficiency of the functioning of state institutions determined the focus of the governments of most countries of the world on achieving sustainable economic growth, as well as ensuring macroeconomic and macrofinancial stability. A major issue that is dealt with is the weakening of the interaction of monetary and fiscal policies in Ukraine. It can be assumed that one of the reasons hindering economic growth is growing discoordination between monetary and fiscal policies. The purpose of this study is to assess the nature of monetary and fiscal policies in Ukraine in 2000–2017 and justify the need for coordination between them to stimulate economic growth. For the quantitative assessment of the influence of monetary and fiscal factors on GDP, the models of autoregression with distributed lags – ARDL are used. The analysis makes it possible to distinguish and characterize three stages of combining the rigid and stimulating monetary and fiscal policy in Ukraine in 2000–2017. The article examines the influence of the dynamics of the monetary aggregate M3, the inflation rate and the weighted average base interest rate on the growth rates of real GDP in Ukraine, the impact of using the “monetary clamp” effect on the increase in the NBU’s interest rate, and the direct effect of monetary factors on the fiscal policy. The authors conclude that the inconsistency of monetary and fiscal policies is one of the reasons for the high volatility of macroeconomic indicators. The article substantiates the conclusion that it is necessary to overcome the increasing antagonism between monetary and fiscal policies in Ukraine and to strengthen their coordination.
Zarah Puspitaningtyas
Banks and Bank Systems, Volume 14, pp 24-39; doi:10.21511/bbs.14(2).2019.03

Abstract:This study aims to determine the assessment of financial performance and the effect on dividend policy of banking companies listed on the Indonesia Stock Exchange in the period of 2014–2017. The assessment of the company’s financial performance is important. Results of the assessment will be consideration of financial performance for investors, one of them to predict the dividend policy. The prediction results will influence investors in making investment decisions. This study employs a quantitative approach. The assessment of financial performance is measured using variables of leverage, profitability and profit growth. They were analyzed using the multiple linear regression method. At the 0.05 significance level, the results of this study showed that the leverage has a negative and significant effect on dividend policy. Meanwhile, profitability and profit growth have no effect on dividend policy. In order to explain the influence between variables, the research is based on the theories underlying the dividend policy, namely the theory of residual dividends and smoothing theory. The results of this study support the residual dividend theory, that one of the dividend policies is determined by the company by considering the target capital structure and then distributing dividends with only the remaining profit.
Elsayed A. H. Elamir, Gehan A. Mousa
Banks and Bank Systems, Volume 14, pp 9-23; doi:10.21511/bbs.14(2).2019.02

Abstract:This study is of an exploratory nature as it seeks to explore the extent to which the language of emotions in the banks’ annual reports is affected by the global financial crisis (GFC). The language of emotions was analyzed using eight categories (trust, anticipation, sadness, anger, fear, disgust, surprise and joy) in annual reports of 12 listed banks from six countries in the Middle East area (namely, Jordan, Kingdom of Bahrain, United Arab Emirates, Sultanate of Oman, Kuwait, Kingdom of Saudi Arabia) from 2002 to 2017. The final data set consists of 192 bank-year observations. The study time was divided into three periods (pre, during and post GFC). In addition, the study enriches accounting literature by being the first study to test Pollyanna hypothesis using emotion analysis. The results of the study show that the percentage of emotional words in banks’ annual reports (2002–2017) represents almost 22% on average. The trust, anticipation and fear categories were the most affected than other emotional categories during GFC. While the trust category decreased, both the fear and anticipation categories increased. Other findings of the study show that regardless of GFC, emotional words of trust and anticipation categories in banks’ annual reports have dominated the emotional words of the disgust and surprise categories. Therefore, Pollyanna hypothesis is supported. In contrast to the emotional words of the joy category in banks’ annual reports which has not dominated the sadness category. In this case, Pollyanna hypothesis is rejected.
Othman Hel Al-Dhaimesh, Mo’Taz Kamel Al Zobi
Banks and Bank Systems, Volume 14, pp 1-8; doi:10.21511/bbs.14(2).2019.01

Abstract:This study aims to examine the effect of sustainability accounting disclosure on the financial performance of banks operating in Jordan during the period of 2013–2017. The study focused on the effect of economic, environmental and social disclosures on financial performance. To achieve the study objective, the content analysis method was used. The dimensions of sustainability accounting disclosure were measured through indicators that have been developed for this purpose, which are in accordance with Global Reporting Initiative (GRI) (G4-2013). The study results revealed that there is a statistically significant effect of sustainability accounting disclosure on the financial performance. In addition, the study results revealed that the disclosure of the economic and social dimensions had a positive effect on return on equity (ROE). While the environmental dimension did not affect the return on equity (ROE). In addition, the results of the study revealed that the disclosure of sustainability dimensions (economic, social and environment) had a combined effect on the return on assets (ROA). This means that the banks operating in Jordan give more priority to the economic dimension disclosure, than to the social and environmental dimensions.In reviewing previous studies in the accounting literature, it has been found that there is a paucity of studies that examine the concept of sustainability accounting, especially in the Jordanian banking sector. Therefore, this study constitutes value to this field.
Nguyễn Thị Nhung, Trần Thị Vân Anh
Banks and Bank Systems, Volume 14, pp 193-210; doi:10.21511/bbs.14(1).2019.17

Abstract:In the third bank restructuring process in Vietnam during the 2011–2016 period, banking system experienced the participation of 14 commercial banks with 7 successful, both mandatory and voluntary, M&A deals. This research tries to answer if M&A was a good method of dealing with weak banks as Vietnam expected. Firstly, the article evaluates M&A activities’ effects on business results of acquiring banks through three financial ratios (including return on asset (ROA), return on equity (ROE) and net interest margin (NIM) by using paired sample T-Test. The results show that M&A activities only have positive effects on ROA of acquiring banks in Vietnam, while impacts of M&A activities on ROE and NIM are not clear. Secondly, by using a fuzzy TOPSIS approach based on Balanced Scorecard, the research shows that the performance of acquiring banks in mandatory M&A deals are not good as compared to the other acquiring banks. In fact, M&A deal only has strongly positive effects on acquiring bank performance, when it is totally based on real demands of both target and acquiring banks as well as created synergy. Therefore, to deal with weak banks in the next time period, Vietnamese banking system should focus on other market solutions in addition to keeping the nature of M&A activities and improving its efficiency.
Lokesha, Iqbal Thonse Hawaldar
Banks and Bank Systems, Volume 14, pp 181-192; doi:10.21511/bbs.14(1).2019.16

Abstract:Agricultural credit is required for the development of agriculture scenario in any economy. Commercial, cooperative and regional rural banks have extended agricultural credit to the farmers in Dakshina Kannada district of India. The effectiveness of agricultural credit system depends on the utilization of credit funds by the borrowers. The present study made an attempt to understand the factors influencing the utilization of agricultural credit of banks in Dakshina Kannada. The study used primary and secondary data. Primary data are gathered from the borrowers of banks operating in Dakshina Kannada district. The study found that there is an impact of demographic, agriculture and agricultural credit factors on the purpose of utilization of agricultural credit in Dakshina Kannada district.
Olena Kofanova, Yuliia Tereshchenko, Roman Kutsyi, Nadiia Morhun, Oleg Gushchyn, Ph.D. in Juridical Kyiv National University named after Taras Shevchenko, Ph.D. in JuridicalNational Academy of Internal Affairs, Ph.D. In Juridical National Academy Of Internal Affairs
Banks and Bank Systems, Volume 14, pp 172-180; doi:10.21511/bbs.14(1).2019.15

Abstract:The purpose of the article is to study computer crimes in the credit and financial sphere based on elements of forensic characteristics of crimes and analysis of the ways of their commission. The relevance of the study is due to the rapid increase in the number of computer crimes in the credit and financial sphere and the low level of their disclosure. The research was conducted using the method of system analysis and synthesis of information obtained from criminal proceedings, as well as reports from the Ministry of Internal Affairs of Ukraine and the National Police of Ukraine, from 2014 to 2018. The most actual motives and methods of committing computer crimes in the financial sphere have been analyzed and it has been established that during the period of Ukraine’s independence, the level of economic crimes has increased by almost 300%. The increase in the number of crimes contributes to the distrust of the injured party to the law enforcement agencies, savings of funds of financial institutions on cyber security, low level of information security of the financial sphere of Ukraine, lack of clear coordination between the relevant departments, which are responsible for the investigation of these crimes. The necessity of conducting separate investigative actions at the initial stage of the investigation has been justified in order to facilitate the rapid identification of the suspect, causing material damage and, in general, the investigation process.
Emad Sayed Abd Elghaffar, Ahmed Mohamed Abotalib, Manal Abdel Azeem Mohamed Khalil
Banks and Bank Systems, Volume 14, pp 159-171; doi:10.21511/bbs.14(1).2019.14

Abstract:This study aims to measure the risk disclosure level in Egyptian banks and to investigate its determinants. The sample consisted of 28 banks during the period from 2010 to 2017. An unweighted risk disclosure index including six categories was used: credit risk, market risk, liquidity risk, capital structure and adequacy risk, operational risk, and other non-financial risks. Also, a content analysis approach was used to measure the actual level of risk disclosure. The findings demonstrated that there was an average level of total risk disclosure of all sample banks. The results showed that banks with a higher percentage of independent board membership, large board size, large audit committee size, duality, higher institutional ownership, and banks audited by one of big four audit firms were more motivated to increase risk disclosure. Also, the results showed that leverage, bad news, and bank social responsibility have a negative relationship with the level of risk disclosure. Overall, the results indicated that leverage, board size, audit committee size, auditor types, independence, duality, institutional ownership, bank social responsibility, and bad news are the main factors affecting the level of risk disclosure in Egyptian banks. The findings of this paper have a number of important implications. The risk disclosure in the banking sector is important for stakeholders such as investors and depositors. Also, risk disclosure index helps the regulatory bodies to evaluate the risk disclosure practice in Egyptian banks. This paper contributes to analyzing factors affecting banks managers’ decision to disclose risk information in emerging countries such as Egypt.
Ahmed Almoneef, Durga Prasad Samontaray
Banks and Bank Systems, Volume 14, pp 147-158; doi:10.21511/bbs.14(1).2019.13

Abstract:The current research aims to explore the impact of corporate governance on the Saudi banking performance for the period of 2014–2017. Though many researchers tested the relationship of corporate governance and firm performance, globally as well as in Saudi Arabia, however, during the literature review, it was found that many excluded the banking industry. This study tries to fill the gap by looking exclusively at the Saudi banking industry. Firm performance is measured through return on assets, return on equity, and Tobin’s Q as the dependent variables. The corporate governance practices are measured through the board characteristics (size, meeting, number of committees, independence, foreign board membership), and an audit committee (size, meeting, independence) as the independent variables. Firm size and firm age are the controls. Panel data analysis was implemented, using both descriptive and multivariate analysis through multiple regression to investigate the governance practices and firm performance. The empirical findings demonstrate that board size, audit committee meeting and bank size have a positive impact on ROE, whereas board independence has a negative impact on ROE. Similarly, board size and bank size have a positive relationship with ROA and board meeting has a negative relationship with ROA. Further, board (size and independence) and bank size have a positive relationship with Tobin’s Q, whereas number of board committees and bank age have a negative relationship with Tobin’s Q. Finally, audit committee (size and independence) and foreign board membership have no impact on the bank performance.