Symposia & Conferences
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Item The Impact of Loan Portfolio Diversification on Bank’s Credit Risk: Evidence from Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Kalpani, W. S. N.; Dissanayake, D. M. U. H.Introduction: This study investigated the impact of loan portfolio diversification on the risk of commercial and specialized banks in Sri Lanka. Although the impact of credit diversification on enhancing fundamental stability and competitiveness needs to be considered, research on credit portfolio diversification in Sri Lanka is limited. Therefore, this study is helpful in that regard. Methodology: The sample consisted of 12 Domestic banks in Sri Lanka and the research period is 2009–2023. The data for the study is collected from secondary sources, such as the Annual report, CBSL report, and Sustainability report. The research philosophy of this research is positivism. The collected panel data is analyzed using the STATA software. Findings: The findings suggest that product-based diversification of the loan portfolio has a significant impact on NPLR, while industry-based diversification of the loan portfolio does not appear to have a significant impact. These findings may be valuable for banks in managing their capital adequacy, deposit levels, and cost efficiency to improve their financial performance and reduced credit risk. Conclusion: The study investigated impact of loan portfolio diversification on credit risk of banking industry in Sri Lanka. This study analysis has two independent variables, three control variables and two dependent variables. There are non-performing loan ratio and Loan loss provisioning ratio as dependent variable and, as independent variables, there are HHI index of product wise (HHIp) and HHI index of industry wise (HHIs). Here is data analysis through the STATA-13 software. Further research on loan portfolio diversification and its impact on credit risk in the Sri Lankan banking sector could explore several avenues beyond the current study. First, future studies could delve deeper into the role of macroeconomic variables such as inflation, exchange rates and GDP growth. Another area for further research is the impact of non-traditional banking products, such as digital loans and microfinance, on credit risk.Item Effect Of Financial Risks on Financial Stability of Licensed Commercial Banks in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Arangalla, A. G. S. N.; Perera, L. A. S.Introduction: This study examines the effect of financial risks including credit, market, operational, and liquidity risks on the financial stability of licensed commercial banks in Sri Lanka. Financial stability is pivotal for Sri Lanka’s economic resilience, especially in the face of challenging economic conditions. However, financial risks pose considerable challenges to banks’ financial stability. This study seeks to explore an identified empirical gap by examining the impact of these financial risks on the long-term sustainability of banks in Sri Lanka. Methodology: The study follows a quantitative approach, analyzing secondary data collected from 13 domestic licensed commercial banks in Sri Lanka over 10 years (2014–2023). Credit risk, market risk, operational risk, and liquidity risk are the independent variables used in this study, and the dependent variable is financial stability. Bank size is also included as a control variable for this study. This research employs panel data regression with random effects and diagnostic tests for the analysis. Findings: The findings reveal that credit risk and operational risk have a significant effect on financial stability, while market risk is only significant with financial stability under interest rate risk. Liquidity risk does not have a significant effect on financial stability in Sri Lankan banks. Conclusion: The study concludes that credit risk and operational risk are key determinants of financial stability in Sri Lankan banks. Even risk factors deemed insignificant in the current context should be monitored, as they have the potential to become impactful in the future. The study underscores that risk management strategies are vital to maintaining banks’ stability and fostering sustainable economic growth. Future research may consider analyzing the impact of other types of risks on banks’ financial stability.Item Understanding GCC Banks: Credit risk, Interest Charges, and Operating efficiency(Faculty of Commerce and Management Studies University of Kelaniya., 2024-11-01) Duppati, G.; Maamari, B.E.This study empirically examines two research questions: First, whether the Credit Risk increases the operating efficiency of banks? And second, whether Interest Charges Influences the relationship between Credit Risk and Operating Efficiency? This study uses the secondary data and it is drawn from EIKON DataStream for the period 2005 to 2022. The sample size of the study includes 50 banks of the GCC region, covering eight states, which includes: Abu Dhabi, Dubai, Saudi Arabia, Sharjah, Kuwait, Oman, Qatar and UAE. For addressing the research questions raised in this study, we employ different regression techniques that include the fixed effects (FE) model and System dynamic panel-data estimation test to ensure robustness of the results. Our results show that high interest rates benefit the 25th and 75th percentiles, but the firm's ability to adapt, innovate, and restructure in response to the changing financial environment will determine how much they benefit lower efficiency quantiles. Banks that overcome these challenges may become more competitive, efficient, and streamlined. While higher interest rates increase financing costs and financial constraints for lower- efficiency banks, they can also spur good transformation.Item The Effect of Bank Specific Determinants on Profitability of the 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) Niroshini, V.D.; Rathwatta, G.M.H.P.K.Sri Lanka, commercial banks play the important role of the operation on the economy and it provides financial infrastructure for economic development. Therefore, studying the determinants of bank profitability is vital to the economy. The study conducted to find out the effect of bank specific determinants on profitability in Commercial Banks in Sri Lanka. To test this objective, the bank Profitability was used as main dependent variable; it included Return on Equity. Moreover, Bank Specific determinants was utilized as Independent variable, it consists with Operation efficiency, Capital adequacy, Credit risk, Liquidity risk, Bank size, Bank Age and Deposit ratio. The study used the secondary data and that obtained from randomly selected ten (10) domestic commercial Banks’ annual reports for the period 2008- 2017. The descriptive analysis, Correlation analysis and Multiple Regression Analysis are used as data analysis methods. The findings revealed that Credit Risk and Liquidity Risk have significant impact on bank profitability whereas bank profitability measures in terms of Return on Equity. Furthermore, the study recommended that the banks should spend much time to maintain Credit Risk and Liquidity Risk as smoothly