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The African farming sector suffers from insufficient finance. Climate changes and socio-political issues hold down the required production level while food on the continent is still inadequate, with more vulnerable people on the one side. On the other side, credit institutions need reasons and guarantees to raise their risk-taking level (financial benefits). Then, this study tries to conciliate those two sides with new shreds of evidence by demonstrating the short and long-run effects of agricultural production on bank sustainability in 40 Sub-Saharan African countries. The study used different agro-production factors (Food and Cereal production factors), bank stability proxies (Liquidity Ratio, NPLs, LLRs), and bank profitability proxies (ROA and ROE). The GMM, DFE, and FMOLS models were used for short (with the 2010-2019 dataset) and long-run analysis (with the 1970-2018 dataset). The results demonstrated that agricultural production increases bank stability and profitability but reduces bank risks. The study concludes that farming finance increases agro-production and stabilizes banks (win-win). Governments, via central banks, should encourage commercial banks to increase bank risk-taking levels to sustain their banking system, increase farming production, and improve food security.

This study aims to examine the association between banks and firms in a loan. Our data set was pooled cross section data from 2014 to 2016, with long-term loans of firms listed in Indonesia Stock Exchange as a unit of analysis. We estimate our regression model using ordinary least square (OLS) estimator. The results revealed that lower-risk banks tend to associate with riskier but well-performing firms. Similarly, lower-capital banks tend to associate with riskier but well-performing firms. These results are quite contrary to previous studies conducted in developed countries. Lower risk banks have relationship with riskier and well-performing firms in condition that the amount of loan is small enough to be considered safe. Meanwhile, lower capital banks in this study, especially in Indonesia, may face the geographical problem which drives cost so high that makes banks charge higher interest to possibly riskier firms. This study makes contribution by providing evidence from a relative fragmented credit market. Future research on this topic is encouraged to look out more detail especially in the causality interpretation.

This study examines the link between bank performance and bank stability in the context of African countries. Using the Augmented Mean Group (AMG) estimator and panel data from 16 selected African countries covering the period 2002–2019, this study considers whether the banking sector's performance influences the banking system's financial stability. The findings reveal a significant positive long-run relationship between ROA and financial stability. This was the case when the AMG estimator was employed and when the CCEMG was employed to check for robustness. Inflation was initially negative and insignificant but a highly significant determinant when a more robust method (CCEMG) was used. Economic growth has a negative relationship using both estimators but is insignificant, while trade openness and non-interest income had insignificant coefficients in both estimators. The granger causality results show a one-way causality established to bank stability in the case of bank performance and trade openness. In addition, there was a non-causal relationship between bank stability, non-interest income and inflation as against a double-track causation between bank stability and economic growth. African countries should strive to improve bank performance to enhance the stability of the sector.

This paper aims to analyse the effects of financial statement indicators and off-balance sheet items affecting risk measures among Indian banks employing both panel data regression and a non-parametric decision tree approach. We explore the effects of bank size, leverage, exposure to contingent liabilities including off-balance sheet derivatives usage and macroeconomic factors on risk measures for banks. In this paper, it is also aimed to examine the effects of the major financial liberalization policy period in the domestic market in India that started in the mid-1990s and ended around 2004 as well as impacts of the 2008 global financial crisis on the risk measures of banks operating in India.  As risk measures, we present a comparative analysis of liquidity, solvency, and interest rate risk measures of Indian banks across public (government) and private ownership categories. Main findings from our study demonstrate (i) significant impact of capital adequacy and the bank size on all the risk measures, (ii) contingent liabilities (including derivatives usage) at banks is observed to significantly impact the asset management measure of liquidity risk and the solvency risk of banks, (iii) GDP growth is observed to impact the asset management and liability management measure of liquidity risk, (iv) the global financial crisis is found to have a significant impact on the liquidity risk measures and interest rate risk, but a weak effect on solvency risk of Indian banks, (v) bank ownership category (government owned versus private sector banks) is observed to have a significant impact on all the risk measures, and finally (vi) financial liberalization reforms had a highly significant effect on the liquidity risk at banks.

This paper examined bank-specific performance indicators and macroeconomic factors affecting the short-term financing obligation of Nigerian banks from 2010 to 2019. The data for the study are sourced annually from the financial statements of the selected Deposit Money Banks and the Central Bank of Nigeria Statistical Bulletin. The panel unit root and co-integration tests are employed to ascertain the sustainability of the bank-specific performance indicators. The models for the industry were cast in a host of panel frameworks such that we estimated the static and dynamic panel models. The study observed that the capital adequacy ratio, which is the short-term financing obligation of Nigerian banks was elastic to bank profitability positively. In addition, interbank call rate, bank size, and oil price positively influence the capital adequacy ratio over time, whereas loan-to-deposit ratio, inflation and exchange rate exacerbate the capital adequacy ratio. Consequently, we canvass that Nigerian banks should reduce dividend payouts and increase retained profits as a buffer against exposed risks.

The Kenyan banking sector is categorized into three tiers, tier I, II and III based on bank size. The profitability of tier II and III has been declining begging the question as to whether the size of the bank has any influence on the performance of the banks. This study determines the influence of internal equity capital on the financial performance of lower-tier commercial banks in Kenya. The study employed a descriptive and explanatory research design. The study population was 26 commercial banks in Tier II and III commercial banks in Kenya from 2016 to 2020. The average internal equity for lower-tier commercial banks in Kenya was .364 in 2016 and .400 in 2017. In 2018, the internal equity sharply rose to 8.299, which was followed by a small decline to 7.782 in 2019 signifying that in 2018 and 2019, lower-tier commercial banks in Kenya employed more internal equity financing to finance their operations. Through the hierarchical regression, it was established that internal equity has a positive and significant influence on the financial performance of lower-tier commercial banks in Kenya. Bank size does not moderate the effect of internal equity on the net profit margin of lower-tier commercial banks in Kenya (p = .202>0.05; R2 change of 0.07). The study recommends that lower-tier commercial banks need to encourage its shareholders to re-invest back their earnings rather than consuming them as dividends as internal equity is affordable and readily available when the bank is in urgent financial need.  

The crux of bank accounting is how to measure and disclose ex ante credit risk, as loan yields and cost of funds are determined by managerial effectiveness and the financial market. This paper examines how the practice of setting up provisions for loan losses by bank managers had changed to preserve regulatory capitals around the 2008 financial crisis. This paper examines the empirical relationship between ex ante credit loss, which is proxied by loan losses provisions, and realized credit loss, which is measured by net charge-off. The empirical relations are examined before, during, and after the 2008 financial crisis to find the patterns of prediction errors of the incurred loss model. This paper obtains evidence that the empirical relation between non-performing assets and provisions for loan losses weakened at the time of a financial crisis. The relations of net charge-offs and allowance for loan losses on provisions for loan losses amplified during a financial crisis by accounting design. After the financial crisis is over, the empirical relation between non-performing assets and provisions for loan losses does not return back to the pre-crisis relation, but to a different, new post-crisis relation. This paper obtains evidence that financially stable banks in terms of the tier 1 capital ratio, return on assets, market-to-book ratio, or dividend payout ratio tend to adjust provisions for loan losses in a larger scale in response to a financial crisis than less stable banks.

The paper’s purpose was to assess whether the effects on the regulatory capital of the ECL model in European banks differs among those that adopted IRB or standardized approaches to credit risk management. The empirical tests revealed that there was a significant reduction in the level of capita buffers of European banks when the IFRS 9 was first adopted, and that this reduction was more pronounced among banks using a standardized approach to credit risk than for those that relied on an IRB approach. Further testing confirmed the premise that there was an underestimation of capital requirements in the period prior to the adoption of the ECL. The study fills a gap in literature, by evaluating the difference in the impact of adopting the ECL model on the banking system, as a function of the credit risk management approach for capital purposes. The assessment of what happened in the European banking system can be used as a guidance to other jurisdictions still in transition to the ECL model.

This paper assesses the determinants of the lending of six commercial banks in Tanzania from 2015 to 2019 using a quantitative research design. The data were collected from Annual Reports of the six commercial banks. The results show that liquidity and capital adequacies have a significant relationship with lending, whereas interest rate and management efficiency have no statistically significant influence on lending. Thus, effective policies should be developed to ensure commercial banks grow and be able to advance more credit. Additionally, the banking sector needs to prioritize increasing the liquidity ratio to ultimately strengthen the bank's financial position. Furthermore, commercial banks should be more innovative in their lending since different sectors present different risk profiles. Lastly, Commercial banks management needs to employ capital growth strategies to enhance the banks’ capital conservation buffer that requires banks to build up extra buffers outside periods of stress.

This study examines the influence of macroeconomic factors, namely Inflation, Gross Domestic Production (G.D.P.) and changes in oil price and Bank-Specific Factors such as capital, asset size, liquidity risk, loan and deposit on bank profitability as measured by return on equity (R.O.E.) and net profit ratio (NPR) during the period of oil price decline, 2013-2017. The top 7 commercial banks were chosen as a sample of the study based on the availability of the data and the possible influence it can contribute to representing Oman's banking industry. The quantitative approach utilized appropriate statistical tools to analyze and interpret the secondary data gathered, including descriptive statistics, panel regression, Pearson correlation, and correlation matrix. Key findings of the study revealed no significant relationship between macroeconomic factors and the return on equity. There is also no significant relationship between macroeconomic factors and the net profit ratio. On the other hand, bank-specific factors significantly correlate return on equity and the net profit ratio. The study's findings contribute to the bank's management, economic policymakers, a research body, and academia in distinguishing the best indicator for a bank's profitability influenced by macroeconomic and bank-specific factors.