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Among all of the world's continents, Asia is the most important continent and contributes 60% of world growth but facing the serving issue of high nonperforming loans (NPLs). Therefore, the current study aims to capture the effect of credit risk management and bank-specific factors on South Asian commercial banks' financial performance (FP). The credit risk measures used in this study were NPLs and capital adequacy ratio (CAR), while cost-efficiency ratio (CER), average lending rate (ALR) and liquidity ratio (LR) were used as bank-specific factors. On the other hand, return on equity (ROE) and return on the asset (ROA) were taken as a measure of FP.

Secondary data were collected from 19 commercial banks (10 commercial banks from Pakistan and 9 commercial banks from India) in the country for a period of 10 years from 2009 to 2018. The generalized method of moment (GMM) is used for the coefficient estimation to overcome the effects of some endogenous variables.

The results indicated that NPLs, CER and LR have significantly negatively related to FP (ROA and ROE), while CAR and ALR have significantly positively related to the FP of the Asian commercial banks.

The current study result recommends that policymakers of Asian countries should create a strong financial environment by implementing that monetary policy that stimulates interest rates in this way that automatically helps to lower down the high ratio of NPLs (tied monitoring system). Liquidity position should be well maintained so that even in a high competition environment, the commercial is able to survive in that environment.

The present paper contributes to the prevailing literature that this is a comparison study between developed and developing countries of Asia that is a unique comparison because the study targets only one region and then on the basis of income, the results of this study are compared. Moreover, the contribution of the study is to include some accounting-based measures and market-based measures of the FP of commercial banks at a time.

The economic development of Bangladesh is heavily reliant on the banking industry, yet it faces numerous hurdles, including liquidity issues, capital shortages, non-performing loans, inefficiencies and so on. Therefore, this study investigated the performance and efficiency of scheduled banks (state-owned, private commercial, foreign commercial and specialized banks) operating in Bangladesh.

The research was conducted using secondary data from annual reports of banks. The CAMELS rating system and Data Envelopment Analysis (DEA) methods were employed to measure the performance and efficiency of banks, respectively.

In the overall bank rankings, results revealed that foreign commercial Standard Chartered Bank and state-owned Sonali Bank Limited came in first and last position, respectively. Among the four categories of banks, foreign commercial banks were the best performer, while state-owned banks were the worst. Only two banks, i.e. Citibank NA and HSBC Bank, were scale efficient while the remaining banks were inefficient. In terms of performance and efficiency, state-owned and specialized banks were deemed wanting.

This study proposes recommendations to the policymakers that could lead to more effective tactics for improving the banking industry's performance and efficiency.

As far as the authors are concerned, this study presents empirical evidence on the performance and efficiency of different types of banks and explores comparisons among them, which has never been done to this extent in the country before.

Using bank-level data over the 1994–2015 period, the authors aim to investigate the role of bank-specific factors on credit risk in Italy by considering two different groups of banks, namely, cooperative and non-cooperative (commercial and popular), in different local markets.

Relying on highly territorially disaggregated data at labour market areas’ level, the authors estimate the impact of the role of bank-specific factors on credit risk in Italy from the estimation of a fixed-effect estimator. Non-performing loans to total loans has been used as a proxy of credit risk; the bank-specific factors are as follows: growth of loans, reflecting credit policy; log of total assets, controlling for banks’ size; loans to total assets, reflecting the volume of credit market; equity to total assets, capturing the solvency of banks and reflecting their capital strength; return on assets, reflecting the profitability of banks; deposits to loans, reflecting the intermediation cost; cost of total assets, reflecting the banks’ efficiency or volume of intermediation cost.

The empirical findings suggest that regulatory credit policy, capitalisation, volume of credit and volume of intermediation costs are the main bank-specific factors affecting non-performing loans. Nevertheless, the present analysis suggests that the behaviour of cooperative banks’ behaviour seems to be in line with that of commercial rather than popular banks, casting doubts about the feasibility of their credit policies. It turns out that recent reforms involving popular and cooperative banks represent the first step toward the enhancement of the stability and efficiency of the Italian banking system. While the present study’s benchmark results are not particularly affected by the degree of competition in the banking sector and by banks’ size, it shows that both cooperative and non-cooperative banks have undertaken more prudent credit policies after the advent of the financial crisis and the introduction of the Basel regulation.

The relationship between bank-specific factors and credit risk has been analysed using a rich sample of cooperative, commercial and popular banks in Italy over the 1994–2015 period. The authors rely on labour market areas being sub-regional geographical areas where the bulk of the labour force lives and works. The contribution is motivated by the financial distress experienced after the 2008 financial crisis, which has significantly hit the Italian banking system and cooperative banks in particular.

The purpose of this paper to analyze the risk reporting practices and its determinants of commercial banks during the period of the adoption of the Basel II Accord in Portugal.

The paper conducts a content analysis of the risk and risk management sections included in the management reports and the notes of the annual reports of Portuguese commercial banks, for the years 2007, 2010 and 2013.

Findings show that theoretical frameworks underpinned in agency and legitimacy theories continue to provide valid explanations for risk reporting by Portuguese banks. More specifically, findings indicate that agency costs, public visibility and reputation are crucial drivers of risk reporting. Findings also indicate that younger banks with lower risk management skills use risk reporting either as an informational process or as a channel to manage organizational legitimacy.

The content analysis does not allow readily for in-depth qualitative inquiry. The coding instrument is subject to coder bias. Information about risk can be provided in sources other than annual reports. Additionally, not all banks disclose information on corporate governance-related variables that could also influence risk reporting.

The current research setting has never been studied hitherto. In this sense, this study seems to be of great relevance given the scarcity of literature on the subject in Portugal.

Intellectual capital (IC) and financial performance is now a very contemporary issue in the banking sector. The purpose of this study is to investigate empirically the impact of IC on financial performance of all the listed commercial banks of Bangladesh.

Bangladesh Bank database and financial statement of the listed commercial banks of Bangladesh for the period of 2014–2018 have been used to collect data. Value added intellectual coefficient (VAIC^TM) methods have been used for measuring the performance of banks. VAIC^TM determined IC and its three major components like structural, human and capital employed.

The results suggest that human capital efficiency (HCE) and capital employed efficiency (CEE) have statistically significant relationships with bank performance, but when VAIC^TM is divided then structural capital efficiency (SCE) does not have a significant relationship with bank performance.

The study uses only listed banks, but it does not include all the commercial banks specially nationalized commercial banks.

The findings allowed banks to focus more on human capital (HC) and structural capital, because in the present world, HC is considered one of the key factors for the success in business. This study also provides an awareness on how good IC of the banking companies will bring more assistance to a better life of a society.

This is one of the very few studies which examine the impact of IC on bank financial performance in Bangladesh.

The study aims to identify the impact of monetary policy tools on the performance of banks in India, and this could be an excellent suggestion to the regulators in framing the favourable interest rates which would meet the macroeconomic objectives of the Indian economy.

The design adopted in this study is descriptive and analytical research. Correlation and regression analysis is used to determine the relationship between bank rate (BR) and the performance of public sector banks in India. The sample chosen for this study is the public sector banks actively performing in India.

The performance is measured by taking three factors, and they are deposits, loans and advances (L&A) and total asset value of the banks. All three factors have shown an impact of BR on them during the five years. L&A affected the least amongst the three factors, but the other two were significantly impacted by the change in BR by the Reserve Bank of India. So, there should be a favourable fluctuation in the BR which will bring flexibility in the banking system, and they can perform well in the economy and the central bank also can concentrate on the macro-economic situation in the country.

This paper helps in giving suggestions to the Central bank, researchers, financial institutions to look into the financial performance and monetary policy rates and the central bank also can concentrate on the macro-economic situation in the country.

This paper investigates the development of efficiency and the progress of banking integration in the European Union by checking for convergence among banks of European and Eurozone countries as well as contrasting the results with those of United States banks.

Initially, we employ the two-stage semi-parametric double bootstrap DEA method, which absorbs the effects of possible integration barriers in the measurement of efficiency. Afterwards, we apply a panel data model, in order to investigate the process of banking integration by testing for convergence and for convergent clusters in banking efficiency.

Our main findings show that the bank efficiency of the US is considerably higher than that of the Eurozone and the European Union. Although there is no evidence of convergence across the banking groups, our results indicate the presence of club convergence. We also conclude that the US banking system is closer to convergence than the Eurozone and the European Union banks. Nevertheless, this outcome is subject to change in the future due to the fact that Eurozone and European Union banks' speed of convergence is higher than that of US banks.

Our survey is unique in trying to check for convergence while controlling for country-specific and bank-specific factors that affect the efficiency of European and Eurozone banks. Moreover, recent literature does not compare the convergence of efficiency of Eurozone, European and US banking. Finally, in our paper special consideration was given to the comparison of commercial, cooperative and savings banks, as subsets of our banking groups.

Due to increase in operational risk, banks are facing huge losses. In order to avoid losses, banks need to manage operational risk. This study aims to analyze the impact of operational risk management (ORM) processes, which include identification, assessment, analysis, monitoring and control in the presence of corporate governance (CG) that can also contribute to effective ORM practices.

Operational risk management processes are used to manage operational risk along with CG. Primary data are collected through questionnaire from (167) operational risk managers of commercial banks. Multiple linear regressions has been run to analyze the data.

Results indicate significant impact of CG and operational risk identification (ORI), monitoring and control on ORM practices in commercial banks of Pakistan.

The study suggests policy makers to improve the ORM framework by CG. Beside this, in order to lessen operational risk, proper identification, monitoring and control of operational risk could also contribute.

This research examines the relationship between market power and liquidity creation in the specific context of bank profitability in the Vietnamese banking sector.

The study applies the methodology proposed by Berger and Bouwman (2009) to demonstrate the creation of bank liquidity through a three-step procedure for investigating the relationship between market power and liquidity creation. The three steps include non-fat liquidity (NFLC), fat liquidity (FLC) and system generalized method of moments estimation for panel data.

This study finds that liquidity creation increases when a bank has high market power. Further, highly profitable banks positively impact the market power of banks with regard to liquidity creation, relative to less profitable banks. Moreover, bank size, capital, economic growth and interest rate negatively influence bank liquidity creation, while credit risk positively relates to bank liquidity creation.

Measurements used in this study are based on the works of Berger and Bouwman (2009). There are specific variations, relative to Basel III. In addition, other variables significantly impact bank liquidity creation that have not been considered in the models, and a quadratic model should have been considered to measure market power and bank liquidity creation.

This study suggests that managers should control the liquidity of their banks by supervising vulnerable characteristics that have been mentioned herein and emphasizing improvements in profitability. Further, the government may consider encouraging banks to generate more liquidity by modifying regulations concerned with market power or reinforcing policies about improving the transparent business environment.

This study characterizes an attempt to examine the influence of market power on the liquidity creation of banks in Vietnam, which represents one of the most dynamic systems in Asia, with several varied participating banks. The current study also examines the same within the specific context of the modifying impact of the profitability of banks.

The agricultural sector remains the backbone of several emerging economies, including Kenya, where it contributes 34% to its gross domestic product (GDP). However, access to financing for agricultural activities appears to be very low compared to developed economies. Following this, governments in a number of countries have sought to introduce banking sector regulations to facilitate increased funding to the agricultural sector. Taking motivation of the interest rate capping regulations by the Central Bank of Kenya (CBK) in 2016, this paper examined the effect of these interest rate ceiling regulations on agri-lending in Kenya.

The paper employs random effects technique to estimate a panel data of 26 commercial banks in Kenya from 2014 to 2018 using the ratio of loans to agricultural sector to gross loans and the natural logarithm of loans to agricultural sector as proxies for agri-lending. Bank size, equity, asset quality, liquidity, revenue concentration and bank concentration are employed as control variables.

The results of the panel regression estimations show that the introduction of the interest cap resulted in increases in the proportion and growth in agri-lending compared with the pre-interest cap period. In addition, large banks and highly capitalised banks were found to be associated with lower agri-lending, with differences in the effects across pre-cap and post-cap periods.

From a policy perspective, the findings highlight the effectiveness of interest rate capping in meeting this objective and supports the calls for strengthening cooperation between the government and key stakeholders in the financial sector. This will allow for the effective enforcement of policies by the regulatory powers in a manner that guarantees sound and dynamic financial systems, particularly within the agricultural sector.

As far as the authors are aware, this the first paper to examine the effect of the interest rate cap regulation on agri-lending in Kenya.