ICARE 2018

Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/19607

Browse

Subject: search.filters.subject.Non-interest income

Search Results

Now showing 1 - 2 of 2
  • Thumbnail Image
    Item
    Non - Interest Income and Performance of Commercial Banks in Sri Lanka
    (4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Karunarathne, W.G.S.M.; Aruppala, W.D.N.
    Non interest income of banks improve the total income, since banks can expand the source of income by diversifying their income while reducing business risks. Accordingly, non-interest income is an extra source of income for commercial banks which is essential to enhance their profitability. ATM technology, personal lending and loan quality are among the main microeconomic factors driving the performance in non-interest income in the commercial banking sector. This study investigated impact of non-interest income on bank performance in case of licensed commercial banks in Sri Lanka for the period of 2007 to 2017. 26 licensed commercial banks were selected as sample of the study. The study conducted based on secondary data which was collected from audited annual reports and published database of the Colombo Stock Exchange and data analyzed by using E-Views statistic software. The results reveal that relying on non-interest income activities may adversely affect bank performance. Findings suggest that only a small proportion of banks present an increase in efficiency level with inclusion of non-interest income, while no significant changes are seen on most banks’ efficiency levels. Also, further finds that the relationship between the share of non-interest income to the net operating revenue and the bank efficiency score is not significant
  • Thumbnail Image
    Item
    Relationship between Income Source Diversification and Financial Performance of Commercial Banks in Sri Lanka
    (4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Dilrukshi, K.K.S.; Thilakarathne, P.M.C.
    Profitability of commercial banks highly depends on the net interest income generating activities. Due to the profitability and stiff competition, banks have changed their income sources, by diversifying into non-interest income generating activities. The objective of the study is to investigate the impact of income source diversification on financial performance of commercial banks in Sri Lanka. The study used secondary data of 15 commercial banks covering the period of 2008- 2017. Diversification Index used as diversification indicator while Return on Assets (ROA) and Return on Equity (ROE) used as performance indicators. There are some control variables like asset size, growth rate, equity ratio and loan ratio added to the model to ensure that there is no any affect for the relationship between bank income diversification and bank performance from those variables. Descriptive statistics, correlation and regression analysis have used as analytical tools of the study. Results revealed that there is a positive relationship between income diversification and bank performance despite the fact that degree of diversification being not in the peak within Sri Lankan context. Additionally asset size, loan ratio and asset growth variables are not significant variables to the both ROA and ROE models and equity ratio variable shows a significant negative relationship with bank performance in both models