Commerce and Management
Permanent URI for this communityhttp://repository.kln.ac.lk/handle/123456789/140
Browse
6 results
Search Results
Item Banking Sector Development and Economic Growth in Sri Lanka: An Econometric Analysis(Department of Finance, University of Kelaniya., 2022) Wijesinghe, M. D. J. W.; Dulanjani, P.Purpose: This study aims to explore the role of the banking sector in elevating the economic growth of Sri Lanka by identifying the short-run and long-run relationship between banking sector development and economic growth in Sri Lanka. Design/Methodology/Approach: This study uses annual data for the period 1960 to 2019 from World Bank's Global Financial Development Database and World Development Indicators. Odedokun's model, which assumes the causation between financial development to economic growth, is employed using the bound test within the ARDL framework. Findings: The estimated long-term parameter of the banking industry development indicator was found to be positively affected economic growth by supporting supply-led growth model. The estimations of the Error Correction Model provide a broad picture of the short-term relationship, and the results are highly consistent with the results of the long-term model. Granger Causality test found that the banking sector development granger cause to the GDP indicating a unilateral relationship. Originality: This study differs from the existing studies, which focus on the neoclassical one-sector aggregate production model. Financial development is input along with other real sector variables to identify the short-run and long-run relationship with the help of a newly developed econometric approach.Item The Impact of Environmental, Social and Governance (ESG) Factors on Financial Performance - Evidence from Licensed Banks in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Dilhani, G. H. M. S.; Dissanayake, D. M. U. H.Introduction: In this context, the integration of Environmental, Social, and Governance (ESG) factors has emerged as one of the critical determinants of financial performance in banking, especially in emerging markets such as Sri Lanka. The study will try to establish how ESG practices have influenced the financial performance of licensed banks in Sri Lanka, focusing on Return on Assets (ROA) and Return on Equity (ROE). Methodology: This study collected data from 10 licensed banks in Sri Lanka over a sample period of fifteen years, from 2009 to 2023. Using a quantitative approach, this study collected secondary data from the annual and sustainability reports of the selected banks. Environmental, social, and governance (ESG) factors were used as the independent variables of the banks selected. Both Return on Equity and Return on Assets were used to measure the financial performance of the selected banks. Further, bank size, leverage ratio, and dividend yield were used as the control variables. A series of fixed-effects panel regression models was used in this study to analyze the data. Findings: The results of the study revealed that there is a positive and significant impact between Environmental, Social, and Governance (ESG) factors and ROE and ROA, whereas all the other hypotheses were accepted. In conclusion, this study revealed that the ESG factors significantly impact the financial performance of the licensed banks in Sri Lanka. Conclusion: The study concludes that ESG integration is no longer solely a regulatory or ethical requirement but also a strategic imperative for financial performance and competitive advantage. It is encouraged that the licensed banks in Sri Lanka adopt comprehensive ESG frameworks with a view to ensuring sustainability and profitability.Item Exploring Barriers and Opportunities Faced by Banking Sector When Adopting Fin-Tech Innovations(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Swarnathilake, P. G. O. K.; Abeysekera, R.Introduction: FinTech innovations have transformed the banking industry by increasing efficiency in services and improving customer satisfaction, while reaching a greater number of the unbanked population. However, in Sri Lanka, the potential benefits of FinTech are curtailed by regulatory constraints, cybersecurity concerns, and resistance to change. This paper analyzes the dynamics of these challenges and opportunities, focusing on actionable solutions for successful FinTech integration in the Sri Lankan banking sector. Methodology: This qualitative research has been designed under a social constructivist framework; the data collection method adopted in this study is semi-structured interviews with nine representatives of different banks. The respondents have been chosen using purposive sampling in order to capture the diversity in private, government, and foreign banks. Thematic analysis was employed to identify patterns and themes pertaining to FinTech adoption barriers and opportunities. Findings: Opportunities: 1.Efficiency and Automation: Reduction in operational costs; smoother processes. 2.Customer-Centric Innovation: Personalized finance services; AI-driven support. 3.Financial Inclusion: Increasing access to the rural and under-served sections of society. 4.Improving Payment Systems: Speedier and more secure digital transactions. Challenges: 1.Regulatory Barriers: Vagueness and outdated frameworks. 2.Cybersecurity Risks: Growing vulnerability with digitization. 3.Resistance to Change: From both employees and customers. 4.Infrastructure Gaps: Inadequate connectivity in rural areas. Conclusion: This study brings to light that while FinTech offers transformative opportunities for Sri Lankan banks, overcoming significant barriers is essential for successful integration. Investments in infrastructure, digital literacy programs, and regulatory reform are vital to leveraging FinTech's potential for efficiency, inclusion, and customer satisfaction.Item The Relationship between Credit Risk Management and Profitability; Evidence from Commercial Banks in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Manike, H.M.S.W.P.; Rathnasiri, U.A.H.A.The banking sector which acts as the backbone of the financial system in Sri Lanka has contributed the country by maintaining an economic growth However, at present banks in Sri Lanka face the problem of credit risk due to deteriorating credit quality. This credit risk management connects with the liquidity as well as profitability and overall risk management of the banks. This study analyzed the impact of credit risk management on profitability of commercial banks in Sri Lanka by using CAMEL model. CAMEL model indicators used to measure credit risk management and model included capital adequacy, asset quality, management efficiency, earning efficiency and liquidity which are influencing to the credit risk management. The study based on secondary data published by commercial banks in Sri Lanka. The sample was 10 banks for 2009 to 2010. Ordinary Least Square (OLS) regression method was used for data analysis. Findings noted that there is a positive relationship between credit risk management and bank performance of commercial banks in Sri Lanka. Further, Capital adequacy, earning efficiency, Liquidity coverage ratio have significant positive relationship with the profitability of commercial banks in Sri Lanka. Asset quality and management efficiency have negative relationship with financial performance of Sri Lankan commercial banks. The study envisaged that these ratios should be improved by the banks for the better performance and CAMEL is a significant tool to analysis of credit risk management.Item Relevance of Financial Indicators on Investor’s Decisions in Banking Sector in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Bandula, M.G.V.M.; Rajapakse, R.M.D.A.P.Shareholders use financial indicators as their main source of obtaining the information regarding the performance of a business. Business entities do have to prepare and present their financial information in a way that can be useful to investors and attract them. Accounting Information contained in financial statements should be accurate and transparent enough to provide an indication of a business performance and financial condition to the decision makers including investors. According to the previous studies related with this topic, investors tend to focus on information contained in financial statements. The main objective of this is to study the validity of Accounting Indicators (AI) for investor‘s decision in Banks registered under Colombo Stock Exchange (CSE) in Sri Lanka. The validity of Accounting Indicators was measured by correlation coefficient between Market Price Per share (MPS) and selected Accounting Indicators as Earning Per Share (EPS), Return On Equity (ROE) and Earnings Yield (EY). The sample was based on the Accounting Indicators derived from the published financial statements of the Commercial Banks listed under CSE. It covers a period of 5 years from 2011 to 2015. According to the results there is a significant relationship between Accounting Indicators and Market Price Per Share. Further it concluded that the investors still tend to consider Accounting Indicators obtained through published financial statements of Commercial Banks in Sri Lanka for investment decisions. Therefore the companies when preparing their financial statements have consider this in to fact an present them in a way that is easily understandable to the investors.Item Determinants of Capital Adequacy Ratio of Commercial Banks in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Herath, H.M.S.N.K.BA resilient banking groundwork plays a foremost part in supporting economic activity and backed to the overall growth of the country. Capital adequacy ratio is a vibrant measure of protection and soundness for banks and depository institutions because it functions as a buffer or cushion for absorbing losses. It is an essential requirement for financial institutions to maintain adequate level of capital and every financial organization must keep balance between capital and available risk in its assets in order to assure its stability. Thus, it has turn into one of the critical benchmarks for Banks. This study is an attempt to empirically examine the factors influencing the capital adequacy ratio (CAR) and to identify the impact of such factors on Capital adequacy Ratio of licensed commercial banks in Sri Lanka. Going with an investigation on this matter would provide assistance to certain parties when they making decisions. This study used multiple regression analysis for panel data of eight licensed commercial banks out of a population of Twenty-five banks in Sri Lanka for a 9 year essential requirement for financial institutions to maintain adequate level of capital and every financial organization must keep balance between capital and available risk in its assets in order to assure its stability. Thus, it has turn into one of the critical benchmarks for Banks. Profitability has a moderate positive relationship with the identified firm-specific variables. The results revealed that Bank size; Deposits, Liquidity and Profitability are negatively correlated with Capital Adequacy Ratio while Loans are positively correlated with Capital Adequacy Ratio.