Evaluation of capital adequacy ratio on Malaysian banking efficiency

Evaluation of capital adequacy ratio on Malaysian banking efficiency

Capital adequacy has been constantly growing in the banking sector in Malaysia and is a key factor in determining the continuity of the commercial and islamic banks in Malaysia. Capital adequacy is a cushion for banking institution for ensure they are survived in financial crisis. However capital a...

Full description

Saved in:
Bibliographic Details
Main Author: Nur Diyana, Yusof
Format: Thesis
Language:eng
eng
Published: 2017
Subjects:
HG Finance
Online Access:https://etd.uum.edu.my/7086/1/s820229_01.pdf
https://etd.uum.edu.my/7086/2/s820229_02.pdf
Tags: Add Tag
No Tags, Be the first to tag this record!
id my-uum-etd.7086
record_format uketd_dc
institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Murugiah, Logasvathi
topic HG Finance
spellingShingle HG Finance
Nur Diyana, Yusof
Evaluation of capital adequacy ratio on Malaysian banking efficiency
description Capital adequacy has been constantly growing in the banking sector in Malaysia and is a key factor in determining the continuity of the commercial and islamic banks in Malaysia. Capital adequacy is a cushion for banking institution for ensure they are survived in financial crisis. However capital adequacy is affected by credit risk, market risk and operational risk. The purpose of this study is to evaluate the capital adequacy ratio on Malaysian banking efficiency from year 2009 to 2016. The variables that would like to test are on between total risk weighted assets for credit risk, total risk weighted assets for market risk and total risk weighted assets for operational risk. A research framework and a hypothesis are developed. The hypothesis of this study is tested using regression analysis. It is to examine the fitness and the strength of the model. In this research, 8 serial data comprised of 10 local banks where 8 of them are commercial banks and 2 of them are Islamic banks. From three of independent variables in this research, only two variables gives an impact towards capital adequacy ratio. In a nutshell, this study offered insights to understanding the evaluation of capital adequacy ratio on Malaysian banking efficiency for mitigate any difficulties during financial crisis.
format Thesis
qualification_name other
qualification_level Master's degree
author Nur Diyana, Yusof
author_facet Nur Diyana, Yusof
author_sort Nur Diyana, Yusof
title Evaluation of capital adequacy ratio on Malaysian banking efficiency
title_short Evaluation of capital adequacy ratio on Malaysian banking efficiency
title_full Evaluation of capital adequacy ratio on Malaysian banking efficiency
title_fullStr Evaluation of capital adequacy ratio on Malaysian banking efficiency
title_full_unstemmed Evaluation of capital adequacy ratio on Malaysian banking efficiency
title_sort evaluation of capital adequacy ratio on malaysian banking efficiency
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2017
url https://etd.uum.edu.my/7086/1/s820229_01.pdf
https://etd.uum.edu.my/7086/2/s820229_02.pdf
_version_ 1747828156185706496
spelling my-uum-etd.70862021-05-10T08:10:46Z Evaluation of capital adequacy ratio on Malaysian banking efficiency 2017 Nur Diyana, Yusof Murugiah, Logasvathi Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HG Finance Capital adequacy has been constantly growing in the banking sector in Malaysia and is a key factor in determining the continuity of the commercial and islamic banks in Malaysia. Capital adequacy is a cushion for banking institution for ensure they are survived in financial crisis. However capital adequacy is affected by credit risk, market risk and operational risk. The purpose of this study is to evaluate the capital adequacy ratio on Malaysian banking efficiency from year 2009 to 2016. The variables that would like to test are on between total risk weighted assets for credit risk, total risk weighted assets for market risk and total risk weighted assets for operational risk. A research framework and a hypothesis are developed. The hypothesis of this study is tested using regression analysis. It is to examine the fitness and the strength of the model. In this research, 8 serial data comprised of 10 local banks where 8 of them are commercial banks and 2 of them are Islamic banks. From three of independent variables in this research, only two variables gives an impact towards capital adequacy ratio. In a nutshell, this study offered insights to understanding the evaluation of capital adequacy ratio on Malaysian banking efficiency for mitigate any difficulties during financial crisis. 2017 Thesis https://etd.uum.edu.my/7086/ https://etd.uum.edu.my/7086/1/s820229_01.pdf text eng public https://etd.uum.edu.my/7086/2/s820229_02.pdf text eng public other masters Universiti Utara Malaysia Abou-El-Sood, H. (2016). Are regulatory capital adequacy ratios good indicators of bank failure? Evidence from US banks. International Review of Financial Analysis, 48, pp.292-302. Ahmet Büyükşalvarci (2011). Determinants of capital adequacy ratio in Turkish Banks: A panel data analysis. AFRICAN JOURNAL OF BUSINESS MANAGEMENT, 5(27). Athukorala, P. (2010). Malaysian Economy in Three Crises. Trade and Development, 2010/12. Bhatti, I. and Misman, F. (2010). Risks Exposure in Islamic Banks: A Case Study of Bank Islam Malaysia Berhad (BIMB). SSRN Electronic Journal. Bis.org. (2016). History of the Basel Committee. [online] Available at: http://www.bis.org/bcbs/history.htm Buehler, K., Samandari,, H. and Mazingo, C. (2009). Capital ratios and financial distress: lessons from the crisis. Risk Practice, 15, pp.1-15. Cadiou, C. and Mars, M. (2014). The Journal Global perspectives on challenges and opportunities. Basel II Pillar 3: Challenges for banks. PricewaterhouseCoopers, pp. 30-35. Cernohorska, L. (2015). Impact of Financial Crisis on the Stability Banking Sectors in the Czech Republic and Great Britain. Procedia Economics and Finance, 26, pp. 234-241. Chami, R. and Cosimano, T. (2001). Monetory Policy with a Touch of Basel. International Monetary Fund, 1(151). Davies, J. (2017). Global Financial Crisis - What caused it and how the world responded. [online] Canstar. Available at: https://www.canstar.com.au/home-loans/global-financialcrisis/ Demirguc-Kunt, A., Detragiache, E. and Merrouche, O. (2013). Bank Capital: Lessons from the Financial Crisis. Journal of Money, Credit and Banking, 45(6), pp.1147-1164. Ekinci, A. (2016). The Effect of Credit and Market Risk on Bank Performance: Evidence from Turkey. International Journal of Economics and Financial Issues, 6(2), pp.427-434. Fitch Ratings (2015). Fitch: New Malaysia Capital Rules to Affect Most Big Bank Groups. [online] Available at: https://www.fitchratings.com/site/pr/992611 Gorton, G. and Winton, A. (1998). Banking in Transition Economies: Does Efficiency Require Instability?. Journal of Money, Credit and Banking, 30(3), p.621. Guisse, M. (2012). Financial Performance of the Malaysian Banking Industry: Domestic vs Foreign Banks. Undergraduate. Eastern Mediterranean University. Hermsen, O. (2012). The influence of the Basel II and III frameworks on financial market stability. Ph.D. University of Bamberg. Heydari, M. and Abdoli, M. (2015). The Effect of Credit Risk Management and Capital Adequacy on Financial Performance of Business Banks. Indian Journal of Science and Technology, 8(S8), pp.196–200. Hussain, S., & Shafi, M. (2014).Operational Risk in Banks. ELK ASIA PACIFIC JOURNAL OF FINANCE AND RISK MANAGEMENT. Ibrahim, M. (2010). Impact of the global crisis on Malaysia's financial system. BIS, (54), pp.267 Isa, A. and Tan, Y. (2015). Bank Negara’s ruling on FHC may alter banking landscape. Star Online. [online] Available at: https://www.thestar.com.my/business/businessnews /2015/10/31/capital-buffers-in-the-making- bank-negaras-ruling-on-fhcs-may-alterthe- banking-landscape-in-the-cou/ Malay Mail Online (2015). Credit Suisse: Malaysian banks’ performance to be worse than 2008 financial crisis. [online] Available at: http://www.themalaymailonline.com/malaysia/ article/credit-suisse-malaysian-banksperformance -to-be-worse-than-2008-financial-c#JmJ4c0ZJEi poDT5E.97 Management Solutions (2010). Capital Adequacy for Credit Risk: A Practical Exercise. Spain: Management Solutions, pp.1-36. International Monetary Fund (2014). Malaysia : Financial Sector Assessment Program Stress Testing the Malaysian and Labuan IBFC Banking Sectors-Technical Note. Country Report No. 14/97. Monetary and Capital Markets Department, pp.1-64. Mwega, F. (2011). The Competitiveness and Efficiency of the Financial Services Sector in Africa: A Case Study of Kenya. African Development Review, 23(1), pp.44-59. Ng, F. (2016). A slowing Malaysian economy. Star Online. [online] Available at: https://www.thestar.com.my/business/business-news/2016/03/07/a-slowing-economy/ Odunga, R. (2016). Specific Performance Indicators, Market Share and Operating Efficiency for Commercial Banks in Kenya. International Journal of Finance and Accounting, 5(3), pp.135-145. Odunga, R., Nyangweso, P., Carter, D. and Mwarumba, M. (2013). Credit Risk, Capital Adequacy and Operating Efficiency Of Commercial Banks in Kenya. International Journal of Business and Management Invention, 2(9), pp.6-12. Posner, E. (2014). How Do Bank Regulators Determine Capital Adequacy Requirements?. Coase-Sandor Institute for Law & Economics, (698). Poudel, R. (2012). The impact of credit risk management on financial performance of commercial banks in Nepal. International Journal of Arts and Commerce, 1(5), pp.9-15. Shaw, R. (2014). The Effectiveness of Basel II. Undergraduate. The University of Mississippi. The Star Online (2015). Malaysian banks under pressure, profit decline to linger. Malaysian banks under pressure, profit decline to linger. [online] Available at: https://www.thestar.com.my/business/business-news/2015/12/08/pressure-on-banks/ Thumbi, G. (2014). Effects of Credit Risk and Working Capital on Capital Adequacy for Commercial Banks in Kenya. Postgraduate. University of Nairobi. Williams, H. (2011). Determinants of capital adequacy in the Banking Sub-Sector of the Nigeria Economy: Efficacy of Camels. (A Model Specification with Co-Integration Analysis). International Journal of Academic Research in Business and Social Sciences, 1(3), p.16.

Similar Items