International Conference on Business and Information (ICBI)

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Subject: search.filters.subject.Capital Adequacy Ratio

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    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
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    Credit Risk Management and Shareholder Value Creation: With Special Reference to Listed Commercial Banks in Sri Lanka
    (Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Perera, L.A.S.; Morawakage, P.S.
    The main aim of this study is to investigate the effect of credit risk management on the shareholder value in listed commercial banks in Sri Lanka. The research has used only the secondary data for the purpose of the analysis and the sources of data include the annual reports of selected quoted public banks in Sri Lanka. This study employed return on shares to measure the shareholder value while non-performing ratio, capital adequacy ratio and loans to deposits ratio have been used as the indicators of the credit risk management of the banks. Regression models were employed to do the empirical analysis. Further the output obtained from the SPSS package was used to interpret the findings. The findings reveal that credit risk management has a significant effect on shareholder value in all eight banks. Among the three credit risk management indicators, Non-Performing Loan Ratio (NPLR) has the most significant effect on the return on shares. Through the results of the study, it can be concluded that null hypothesis can be rejected since there is a significant relationship between credit risk management and shareholder value.
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    Bank-Specific Determinants of Risk Management Efficiency: Evidence from Listed Commercial Banks in Sri Lanka
    (Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Piyananda, S.D.P.; Chandrasena, S.M.; Fernando, J.M.R
    This study aims to identify the significant bank specific determinants of risk management efficiency of the listed commercial banks in Sri Lanka, by covering the financial statements of 11 banks during the period of 2008 to 2014. Panel regression analysis employed as the data analysis tool. Capital Adequacy Ratio (CAR) has been used as the dependent variable as the proxy for risk management efficiency and credit risk, liquidity risk, market risk, return on assets (ROA), banks’ size, and operational efficiency selected as the determinants of bank efficiency. Results revealed that the credit risk, liquidity risk, ROA, operational efficiency and banks’ size are the important factors of determining the degree of CAR of commercial banks in Sri Lanka. Further as shown by the results of the study, independent variables collectively have high effect on the dependent variable since the explanatory power of the model is approximately 67%.