Erin Olayinka; Eriki Emoarehi; Arumona Jonah; Jacob Ame
Volume 4, Issue 9 , September 2017, , Pages 937-952
Abstract
This study examines the impact of Enterprise Risk Management (ERM) on financial performance in the emerging market with special focus on the Nigerian financial sector. The study investigates 40 companies from the period 2012 to 2016 resulting into 200 firm observations. The method used to measure financial ...
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This study examines the impact of Enterprise Risk Management (ERM) on financial performance in the emerging market with special focus on the Nigerian financial sector. The study investigates 40 companies from the period 2012 to 2016 resulting into 200 firm observations. The method used to measure financial performance was Return on Assets (ROA) while Value at Risk (VaR) was used as a proxy for Enterprise Risk Management (ERM). The study used other control variables such as Leverage (LEV), Board Size (BSIZE), Firm Size (FSIZE), Institutional Ownership (INTOWN) and Risk Management Committee Size (RMC). The result of regression coefficient shows that VaR (0.216), BSIZE (0.218), FSIZE (0.021), INTOWN (0.001), and RMC (0.032) are statistically significant with the exception of LEV (-0.572) which shows an inverse relationship with financial performance. The empirical findings show that ERM is positively and significantly related to financial performance. The results support the hypothesis that ERM has a significant impact on the financial performance of listed firms in the Nigerian financial sector. We recommend that the regulatory authorities (Central Bank of Nigeria, Financial Reporting Council of Nigeria etc.) in charge of the financial sector should ensure that all firms in the sector adopt ERM as a matter of urgency and continue to ensure strict compliance with the ERM framework.
Muhammad Rizwan Nazir; Muhammad Imran Nazir; Yasir Habib; Shujahat Haider Hashmi; Zeeshan Farred
Volume 4, Issue 2 , February 2017, , Pages 136-162
Abstract
This study examines the determinants of banks profitability in Pakistan. The main objectives of the study are to determine the factors that influence banks profitability in Pakistan and to make recommendations for management decision making and policy objectives. A panel data of 25 banks (commercial, ...
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This study examines the determinants of banks profitability in Pakistan. The main objectives of the study are to determine the factors that influence banks profitability in Pakistan and to make recommendations for management decision making and policy objectives. A panel data of 25 banks (commercial, Islamic, foreign and local banks) in Pakistan was analyzed over period of 2006-2015, using panel data regression method to estimate common, fixed and random effect regression models. The two key measures of profitability (dependent variables) analyzed in this study comprised of ROA and Return ROE. The bank-specific factors were incorporated into the regression models, were Credit risk, Expenses Management, Deposits to total assets, non-interest income and size. The results for the ROA model indicate that size and deposit to total assets of bank is positively significant to bank profitability while credit risk, expenses management and non interest income are negatively affect the profitability. Moreover the results of ROE model indicates that credit risk and NII are negatively significant and Size is positively significant with banks profitability. This study also indicates the comparison between Islamic verses non Islamic, Foreign verses local, and public verses private banks which shows there different results on banks profitability.
