Commerce and Management

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Subject: search.filters.subject.Risk management

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    The Impact of Industry-Specific Factors on Non-Performing Loans: “Evidence from Licensed Banks and Finance Companies in Sri Lanka”
    (Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Sewwandi, B. S.; Dissanayake, D. M. U. H.
    Introduction: Diverse studies have been undertaken on different aspects of the industry and their respective impacts on the amount of non-performing loans in licensed banks and finance companies in Sri Lanka. These generalizations apply to every financial institution and concern both profitability and stability. These data will be considered based on quantitative measures that will cover a range of years from 2012 until 2023, which include gross amounts of loans as well as liquidity ratios, loans-to-deposit ratio, return on assets (ROA), size of the bank, and the level of capital adequacy ratio (CAR) as potential explanatory variables for NPL levels among the responding banks in the study. Methodology: The research relies on panel data analysis and regression models. Data was collected from the annual reports of 10 licensed banks and 5 licensed finance companies. The statistical techniques used included normality tests, correlation, regression analyses, and diagnostic checks (e.g., heteroskedasticity, and multicollinearity). Findings: Gross loans, liquidity ratios, and CAR have direct positive effects on NPLs as loan amounts and regulatory capital requirements increase, the risks get higher. In contrast, the loan-to-deposit ratio and ROA exhibit negative relationships with NPLs, which implies that improved profitability leads to fewer loan defaults. Thus, mixed results were given on bank size since larger institutions are linked to higher risks and operational complexity. Conclusion: The results highlight the necessity for fortified risk management, custom credit policies, and enhanced regulatory frameworks to mitigate NPLs. The research adds to the scant literature on dynamics in NPL in Sri Lanka and offers facts for policymakers and financial executives to consider.
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    The Determinants of Demand for Reinsurance in the Sri Lankan General Insurance Market - Special Reference to the Marine Sector
    (Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Edirisingha, M. S.; Sudasinghe, S. L.
    Introduction: Reinsurance is an indispensable tool in the risk management framework of the insurance industry, enabling companies to transfer significant risks while ensuring financial stability. This research focuses on the determinants of reinsurance demand in the general insurance market of Sri Lanka, focusing on the marine insurance sector, which is very important but not widely researched in the local context. Methodology: This study collected data from 12 General Insurance Companies in Sri Lanka for a sample period of eight years, from 2015 to 2022. Using a quantitative approach, this study collected secondary data from the annual reports of the selected companies. This study primarily investigates how critical financial factors such as Return on Total Assets (ROA), the growth of Gross Written Premiums (GWP), underwriting risk, solvency margin, and financial leverage affect the demand for reinsurance. A series of fixed-effects panel regression models were used in this study to analyze the data. Findings: The results show that solvency margin, financial leverage, and underwriting risk have a positive and significant impact on the demand for reinsurance. On the other hand, the ROA and GWP growth did not show any significant association with the demand for reinsurance, which thus indicates that financial stability rather than profitability or growth motivates the reinsurance decisions mainly in the SL context. Conclusion: Firms with higher solvency margins use reinsurance to optimize risk retention and capital allocation. Similarly, the higher the leverage, the greater the demand for reinsurance as a strategy to mitigate risks associated with increased financial obligations.
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    Impact of Board Composition on Risk Management: Evidence from Listed Companies in Sri Lanka
    (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) Pathiraja, P.M.D.S.; Priyadarshanie, W.A.N.
    Board plays a vital role and the directions of the entity’s whole journey lies with the hands and brains of directors. This study focuses on investigating whether there is significant impact of board composition on risk management of an entity. Cluster sampling method was employed and 100 companies which are listed in Colombo Stock Exchange (CSE) have been randomly selected so as to represent the all sectors in CSE. Data was collected from 2012 to 2017 by annual reports. Board size, Board Independence, Board Financial Literacy, CEO duality and Board meetings frequency were used as independent variables. Risk management was considered as dependent variable while capital structure and company size were considered as control variables. Risk management was measured by beta value. Regression analysis were employed to analyze data. Findings revealed that there is a significant impact of Board Financial Literacy and CEO Duality on beta. The findings will be vital in backing companies to picking heads into its board