Christian S. Almirol, Nathaniel D. Arizala, Franchezca Pauline B. Biasca, Regina Satingin, Mary Joyce C. Lozano, Andrea B. Sarmiento
Influence of credit risk indicators on the financial performance of Philippine Universal Banks: Basis for improving financial decisions - Undergraduate Thesis: (BSBA major in Financial Management) - Pamantasan ng Lungsod ng Maynila, 2023
ABSTRACT Universal banks contribute significantly to economic growth worldwide. Banks provide savings, deposits, investments, credit, and loans to consumers, corporations, and the government as trusted intermediaries. However, it is also a source of the most significant risk in banks worldwide, the credit risk. This study aims to determine the correlation of credit risk indicators on the financial performance of universal banks in the Philippines. Credit risk indicators include the Capital Adequacy Ratio (CAR), Non-Performing Loans Ratio (NPLR), and Loan Loss Provision. In contrast, financial performance indicators include Return on Assets (ROA) and Return on Equity (ROE). The study analyzes financial data from the 16 Philippine universal banks from 2018 to 2021 and formulates hypotheses relating to the subject matter. This study employed descriptive statistics and inferential statistics to analyze the data. The findings revealed that ROA has no significant relationship with CAR, NPLR, or LLP. However, the correlation coefficients of ROA and CAR showed a negative and weak relationship, while ROA and its relationship to NPLR and LLP are positive and weak. The test results also revealed that ROE has no significant relationship with the three credit risk indicators. However, ROE and CAR exhibited negative and weak correlations, whereas ROE and its relationship to NPLR and LLP had positive and weak correlations. KEYWORDS: Credit Risk Indicators, Financial Performance, Universal Banks, Capital Adequacy Ratio, Non-performing Loans Ratio, Loan Loss Provision, Return on Asset, Return on Equity
ABSTRACT Universal banks contribute significantly to economic growth worldwide. Banks provide savings, deposits, investments, credit, and loans to consumers, corporations, and the government as trusted intermediaries. However, it is also a source of the most significant risk in banks worldwide, the credit risk. This study aims to determine the correlation of credit risk indicators on the financial performance of universal banks in the Philippines. Credit risk indicators include the Capital Adequacy Ratio (CAR), Non-Performing Loans Ratio (NPLR), and Loan Loss Provision. In contrast, financial performance indicators include Return on Assets (ROA) and Return on Equity (ROE). The study analyzes financial data from the 16 Philippine universal banks from 2018 to 2021 and formulates hypotheses relating to the subject matter. This study employed descriptive statistics and inferential statistics to analyze the data. The findings revealed that ROA has no significant relationship with CAR, NPLR, or LLP. However, the correlation coefficients of ROA and CAR showed a negative and weak relationship, while ROA and its relationship to NPLR and LLP are positive and weak. The test results also revealed that ROE has no significant relationship with the three credit risk indicators. However, ROE and CAR exhibited negative and weak correlations, whereas ROE and its relationship to NPLR and LLP had positive and weak correlations. KEYWORDS: Credit Risk Indicators, Financial Performance, Universal Banks, Capital Adequacy Ratio, Non-performing Loans Ratio, Loan Loss Provision, Return on Asset, Return on Equity
academic writing
HG3691 A46 2023
Influence of credit risk indicators on the financial performance of Philippine Universal Banks: Basis for improving financial decisions - Undergraduate Thesis: (BSBA major in Financial Management) - Pamantasan ng Lungsod ng Maynila, 2023
ABSTRACT Universal banks contribute significantly to economic growth worldwide. Banks provide savings, deposits, investments, credit, and loans to consumers, corporations, and the government as trusted intermediaries. However, it is also a source of the most significant risk in banks worldwide, the credit risk. This study aims to determine the correlation of credit risk indicators on the financial performance of universal banks in the Philippines. Credit risk indicators include the Capital Adequacy Ratio (CAR), Non-Performing Loans Ratio (NPLR), and Loan Loss Provision. In contrast, financial performance indicators include Return on Assets (ROA) and Return on Equity (ROE). The study analyzes financial data from the 16 Philippine universal banks from 2018 to 2021 and formulates hypotheses relating to the subject matter. This study employed descriptive statistics and inferential statistics to analyze the data. The findings revealed that ROA has no significant relationship with CAR, NPLR, or LLP. However, the correlation coefficients of ROA and CAR showed a negative and weak relationship, while ROA and its relationship to NPLR and LLP are positive and weak. The test results also revealed that ROE has no significant relationship with the three credit risk indicators. However, ROE and CAR exhibited negative and weak correlations, whereas ROE and its relationship to NPLR and LLP had positive and weak correlations. KEYWORDS: Credit Risk Indicators, Financial Performance, Universal Banks, Capital Adequacy Ratio, Non-performing Loans Ratio, Loan Loss Provision, Return on Asset, Return on Equity
ABSTRACT Universal banks contribute significantly to economic growth worldwide. Banks provide savings, deposits, investments, credit, and loans to consumers, corporations, and the government as trusted intermediaries. However, it is also a source of the most significant risk in banks worldwide, the credit risk. This study aims to determine the correlation of credit risk indicators on the financial performance of universal banks in the Philippines. Credit risk indicators include the Capital Adequacy Ratio (CAR), Non-Performing Loans Ratio (NPLR), and Loan Loss Provision. In contrast, financial performance indicators include Return on Assets (ROA) and Return on Equity (ROE). The study analyzes financial data from the 16 Philippine universal banks from 2018 to 2021 and formulates hypotheses relating to the subject matter. This study employed descriptive statistics and inferential statistics to analyze the data. The findings revealed that ROA has no significant relationship with CAR, NPLR, or LLP. However, the correlation coefficients of ROA and CAR showed a negative and weak relationship, while ROA and its relationship to NPLR and LLP are positive and weak. The test results also revealed that ROE has no significant relationship with the three credit risk indicators. However, ROE and CAR exhibited negative and weak correlations, whereas ROE and its relationship to NPLR and LLP had positive and weak correlations. KEYWORDS: Credit Risk Indicators, Financial Performance, Universal Banks, Capital Adequacy Ratio, Non-performing Loans Ratio, Loan Loss Provision, Return on Asset, Return on Equity
academic writing
HG3691 A46 2023