Commerce and Management

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The Impact of Regulatory Capital on Credit growth, Non-Performing Loans, And Bank Efficiency: Evidence from Sri Lanka
(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) De Silva, W. M. L. H. K.; Dissanayake, D. M. U. H.
Introduction: This paper is regarding the effect of capital regulatory requirements on credit growth, non-performing loans, and bank efficiency in Sri Lanka, focusing on 2008–2022 years. The banking industry in Sri Lanka has faced grabbing new opportunities, as well as challenges, especially in balancing the requirement for capital adequacy with operational performance, since the Basel III laws took effect. Methodology: The study done a quantitative methodology, evaluating a balanced panel dataset from ten commercial banks with fifteen years, using econometric models such Ordinary Least Squares (OLS), Fixed Effects, and Random Effects. The Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), credit growth, and non-performing loan (NPL) ratios are significant variables that have control for macroeconomic factors which include GDP growth and the policy rates. Findings: The findings imply that growing capital reserves reduce lending ability since higher CAR levels have an inverse impact on credit expansion. Conversely, there is a positive relationship between CAR and NIM, revealing that higher capital buffers lead to improved operational stability and performance. Nevertheless, there is an astonishingly helpful relationship between CAR and NPLs, which would imply that high credit risk and not poor loan quality should require high reserves. These findings demonstrate how regulatory capital plays a twin role of improving bank stability and risk management at the cost of availability and prosperity of lending. It follows, therefore, that the policymakers should consider a balanced rules approach where capital requirements are adjusted for market conditions and bank-specific risks. Negative impacts on nonperforming loans and credit growth can be softened by increasing operational efficiency and practices related to risk management. Conclusion: This research contributes to our knowledge of the intricate relationships between regulatory capital and banking performance in developing countries by providing guidance to improve financial regulations to ensure stable and sustainable growth in the banking sector in Sri Lanka. I focus further on the logic behind these collaborations at the end. Why it is each positive and negative.
Economic Value Added as a Performance Measurement Tool: A Study on Selected Banks in India
(9th International Conference on Business and Information (ICBI-2018), Department of Management Studies and Toc H Institute of Science and Technology, India, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Antony, A.; Subramanin, V.
Banks has significant role in the economy as it constitutes an important aspects of Indian Financial System. But in recent year its profitability was adversely affected because of stressed assets. The assets stress has hampered credit growth of the economy. Five banks were selected to evaluate its performance both in terms of financial performance measures as well as value based measures. The main objective of the study was to evaluate the financial efficiency of the banks and also the contribution of the banks in value creation towards its shareholders. The period of the study was 2014-2018. The EVA and MVA were the two value based measures and the dependent variable of the study. The independent variables are Net Profit, Operating Profit, ROA, ROCE, PAT, CAR, EPS and EVA. From the two regression models, the stronger one was the Economic value Added as it was found that 67% of the variation of the dependent variable was due to the independent variables. It is observed that the MVA of all the four private sector banks has steadily improved over the years. The same cannot be said of SBI where the MVA has eroded significantly. The study help to identify whether the banks are properly utilizing the capital invested and creating value for its shareholders. However, study shows that Operating Profit and ROCE is highly correlated to the value performance measures of the banks
Determinants of Financial Performance of Listed 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) Chandrapala, C.N.C.; Thilakarathne, P.M.C.
The main purpose of this study examines the bank specific factors which are determined the financial performance of listed banks in Sri Lanka. Bank size (BS), Capital ratio (CAR), Liquidity (LIA), Deposits to assets (DEA), Operating expense to assets (OPA), and Loan to assets (LOA) as independent variables and financial performance as the dependent variable. This research return on assets (ROA) and return on equity (ROE) used measure the financial performance. The study conducted with panel data and utilized the sample frame interim financial reports of listed banks in Sri Lanka. Multiple regression model used analyze the data including 220 observations of 11 listed bank in Sri Lanka over the period 2013-2017.Regression model were analyzed by using E- Views software package. The result reveal that bank size, loan to assets and deposits to assets have significant positive relationship with both financial performance measures and liquidity has significant negative relationship with return on equity (ROE). In view of these findings, banks financial performance is determine by the bank specific factors therefore bank management have more significant influence on determine the financial performance of banks listed in Sri Lanka. The result of the study are value to both academic and policy makers

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