Determinants of commercial banks' profitability. Evidence from Hungary

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F18%3A43914385" target="_blank" >RIV/62156489:43110/18:43914385 - isvavai.cz</a>

Výsledek na webu

<a href="https://doi.org/10.11118/actaun201866051325" target="_blank" >https://doi.org/10.11118/actaun201866051325</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.11118/actaun201866051325" target="_blank" >10.11118/actaun201866051325</a>

Jazyk výsledku

angličtina

Název v původním jazyce

Determinants of commercial banks' profitability. Evidence from Hungary

Popis výsledku v původním jazyce

This paper aims to find out whether bank-specific (internal) factors impact on the profitability of commercial banks in Hungary for 16 a year period ranging from 2000 - 2015. The study employs a sample of twenty-six commercial banks with four hundred sixteen observations. The study employs return on average assets (ROAA) as a proxy for bank profitability, and it also considers bank-specific (internal) factors as independent variables. These include asset quality (non-performing loans), overhead costs, bank size, net interest margin, and liquidity risk plus capital adequacy ratio. The study uses panel regressions, descriptive statistics and correlation analysis for the investigations. The panel regression models are to estimate the impact of bank-specific (internal) factors on bank profitability. The Hausman specification test was conducted on the panel regression models in order to identify the best and appropriate model for the study. The empirical findings reveal that non-performing loans, overhead costs and liquidity had a significant negative impact on bank profitability as bank size had a significant positive impact on profitability. However, net interest margin and capital adequacy ratio had no impact on bank profitability. The study concludes that bank size and asset quality are bank-specific factors that have the biggest impact on commercial banks&apos; profitability in Hungary for the period under investigation. The study recommends that commercial banks should endeavor to manage and reduce overhead costs to be able to earn more profits since overhead costs adversely affect bank profitability. More so, commercial banks&apos; managers should regularly monitor credit and liquidity risk indicators as well as pursuing diversification policies of income sources while upholding optimisation of operational costs.

Název v anglickém jazyce

Determinants of commercial banks' profitability. Evidence from Hungary

Popis výsledku anglicky

This paper aims to find out whether bank-specific (internal) factors impact on the profitability of commercial banks in Hungary for 16 a year period ranging from 2000 - 2015. The study employs a sample of twenty-six commercial banks with four hundred sixteen observations. The study employs return on average assets (ROAA) as a proxy for bank profitability, and it also considers bank-specific (internal) factors as independent variables. These include asset quality (non-performing loans), overhead costs, bank size, net interest margin, and liquidity risk plus capital adequacy ratio. The study uses panel regressions, descriptive statistics and correlation analysis for the investigations. The panel regression models are to estimate the impact of bank-specific (internal) factors on bank profitability. The Hausman specification test was conducted on the panel regression models in order to identify the best and appropriate model for the study. The empirical findings reveal that non-performing loans, overhead costs and liquidity had a significant negative impact on bank profitability as bank size had a significant positive impact on profitability. However, net interest margin and capital adequacy ratio had no impact on bank profitability. The study concludes that bank size and asset quality are bank-specific factors that have the biggest impact on commercial banks&apos; profitability in Hungary for the period under investigation. The study recommends that commercial banks should endeavor to manage and reduce overhead costs to be able to earn more profits since overhead costs adversely affect bank profitability. More so, commercial banks&apos; managers should regularly monitor credit and liquidity risk indicators as well as pursuing diversification policies of income sources while upholding optimisation of operational costs.

Druh

J_SC - Článek v periodiku v databázi SCOPUS

CEP obor

—

OECD FORD obor

50206 - Finance

Projekt

—

Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2018

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis

ISSN

1211-8516

e-ISSN

—

Svazek periodika

66

Číslo periodika v rámci svazku

5

Stát vydavatele periodika

CZ - Česká republika

Počet stran výsledku

11

Strana od-do

1325-1335

Kód UT WoS článku

—

EID výsledku v databázi Scopus

2-s2.0-85056287178