The effects of capital structure on banks' performance, the Ugandan perspective
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F19%3A43916351" target="_blank" >RIV/62156489:43110/19:43916351 - isvavai.cz</a>
Result on the web
<a href="https://doi.org/10.11118/actaun201967030853" target="_blank" >https://doi.org/10.11118/actaun201967030853</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.11118/actaun201906730853" target="_blank" >10.11118/actaun201906730853</a>
Alternative languages
Result language
angličtina
Original language name
The effects of capital structure on banks' performance, the Ugandan perspective
Original language description
The paper aims to investigate the effects of capital structure on banks' performance on Ugandan banks for a ten years period, 2006-2015 with a sample of 20 commercial banks. The study employs four performance indicators of return on equity, return on assets, net interest margin and cost to income ratio to determine bank performance. Panel regression models are used to determine the effects of capital structure on bank performance. Independent variables are sub-divided into capital structure variables namely; long-term debt to total assets, short-term debt to total assets and total debt ratio and then control variables are bank size and tangibility of assets. Results portray that there is a positive relationship between capital structure variables and bank performance. It's between long-term debts, total debt with net interest margin. There is also a positive relationship between total debt and return on assets. It is still the same between total debt and returns on equity. However, there is a negative relationship between short-term debt and return on assets. The results also signify a positive relationship between bank size and net interest margin. It is still the same between bank size and returns on equity plus return on assets. There is a negative relationship between the tangibility of assets and net interest margin. It is also the same with return on equity. The findings propose that profitable banks rely more on debt financing as their financing option. This is advanced by the fact that approximately 68 % of total assets are represented by short-term debts for Uganda's commercial banks. This further implies that Ugandan banks largely depend on short-term debt financing for their business operations compared to long-term debt. Hence the study recommends that executive banking management teams plus policymakers should design prudent financing decisions aimed at reducing overreliance on debts to yield optimal capital structure levels. This will enable banks to remain at the top of the profitability game competitively in the banking industry.
Czech name
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Czech description
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Classification
Type
J<sub>SC</sub> - Article in a specialist periodical, which is included in the SCOPUS database
CEP classification
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OECD FORD branch
50206 - Finance
Result continuities
Project
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Continuities
S - Specificky vyzkum na vysokych skolach
Others
Publication year
2019
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis
ISSN
1211-8516
e-ISSN
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Volume of the periodical
67
Issue of the periodical within the volume
3
Country of publishing house
CZ - CZECH REPUBLIC
Number of pages
16
Pages from-to
853-868
UT code for WoS article
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EID of the result in the Scopus database
2-s2.0-85071526508