Aug 2026· Jurnal Ilmu Keuangan dan Perbankan (JIKA)· Vol 15· 0 citations· 34 references
Abstract
This study examines how banking-specific internal determinants shape financial performance, positioning bank size as a moderating construct. Inconsistent empirical evidence concerning the roles of capital adequacy, asset quality, management quality, liquidity, and cost efficiency in driving profitability motivated this inquiry. Employing a quantitative design with secondary data drawn from 32 banks listed on the Indonesian Stock Exchange over 2020–2024, the research applies panel data regression under a fixed effects specification. The primary contribution to the existing body of knowledge lies in simultaneously testing multiple internal determinants while incorporating bank size as a moderating variable. The novelty of this study rests on the inclusion of cost efficiency ratio as a profitability factor within the moderation framework. Evidence reveals that liquidity and cost efficiency exert a statistically positive and significant influence on financial performance, whereas capital adequacy, asset quality, and management quality yield no discernible effects. Bank size contributes positively to financial performance on a direct basis; however, it attenuates the effects of both liquidity and cost efficiency. These outcomes carry practical implications for bank managers seeking to enhance liquidity practices and control operational expenditures.
Keywords : Bank size; Capital adequacy; Cost efficiency ratio; Financial performance; Liquidity.
Purpose: This study empirically investigates the relationship between key bank characteristics—capital adequacy, asset quality, board independence, and liquidity—and the financial performance of Nigerian deposit money banks (DMBs), proxied by return on assets (ROA).
Methodology: The study employed an ex-post facto research design, utilizing panel data from 14 quoted DMBs over a 10-year period (2009–2018). Data were sourced from the banks' annual reports and analyzed using pooled ordinary least squares (OLS) regression, preceded by diagnostic tests including correlation analysis, descriptive statistics, and normality tests.
Results and Conclusion: The findings reveal that capital adequacy and board independence have a significant positive relationship with ROA, while asset quality and liquidity demonstrate an insignificant negative relationship. Firm size also showed a significant positive effect. The study concludes that strong capital buffers and independent boards are vital for profitability.
Implications of findings: The implications of the findings are threefold: for bank management, there is a clear need to prioritise capital strength and board composition over excessive liquidity hoarding; for regulators, stricter governance codes and capital compliance enforcement are warranted; and for policymakers, the results underscore the importance of promoting sound internal governance as a driver of sectoral stability, while also addressing asset quality challenges through enhanced credit risk monitoring frameworks.
G. E. Okpanachi, D. O. Odobi, E. Negedu et al.· FUDMA Journal of Accounting...· 0 citations
Purpose: This study investigates the direct effect of non-cash working-capital liquidity on corporate cash holdings and evaluates whether firm size acts as a moderating variable within the liquidity-intensive property and real estate sector listed on the Indonesia Stock Exchange.Research Methodology: A quantitative explanatory approach using panel data was conducted on 42 property and real estate firms (252 firm-year observations) listed from 2018 to 2023. Data were analyzed using regression analysis by EViews 12 software.Results: Statistical findings demonstrate that liquidity has a significant negative direct effect on cash holdings. Importantly, firm size significantly moderates the relationship between liquidity and cash holding in a positive direction, confirming its role as a pure moderator that attenuates liquidity substitution behavior.Conclusions: Organizational scale fundamentally alters corporate liquidity management; while smaller firms substitute non-cash liquidity for physical cash, larger enterprises leverage superior credit access and scale advantages to accumulate internal liquid reserves alongside working capital growth.Limitations: The scope is limited strictly to audited financial disclosures of property and real estate companies in a single emerging market over a six-year period, unobserving qualitative governance factors.Contributions: The study provides financial managers with insights to optimize cash conversion cycles and offers Investors and Regulators (Otoritas Jasa Keuangan-OJK) a diagnostic scale-adjusted framework for evaluating corporate liquidity risk
Beny Beny, Erika Jimena Arilyn, Wahyuni Rusliyana Sari et al.· Jurnal Akuntansi Keuangan da...· 0 citations
This paper re-examines the determinants of profitability in Bangladeshi private commercial banks, using a panel-corrected standard errors (PCSE) analysis of ten listed banks over 2014–2023 (n = 100 bank-year observations), together with a post-sample assessment of the sector's extraordinary deterioration through 2024–2025. Profitability is measured by return on assets (ROA), with return on equity (ROE) and net interest margin (NIM) used as robustness checks. Results show that capital adequacy and management efficiency significantly enhance profitability, while asset-quality deterioration and non-performing loans (NPLs) exert strong negative effects; liquidity management and bank size are largely insignificant, pointing to inefficiencies in deployment and scale. GDP growth is statistically negligible within-sample and inflation shows mixed effects, underscoring structural weaknesses in financial intermediation. A winsorization check (1st/99th percentiles) confirms that the capital-adequacy and NPL effects are stable to outlier treatment, while the management-efficiency effect is more sensitive. Extending the analysis with Bangladesh Bank, IMF, and World Bank data through 2025 shows that the sector-wide NPL ratio rose from below 10 percent in 2023 to more than 30 percent by late 2025, alongside a collapse in aggregate capital adequacy a trajectory consistent with, and considerably amplifying, the credit-quality channel identified in the panel results. The study contributes methodologically by applying PCSE in a South Asian context, and offers policy implications for strengthening credit discipline, addressing regulatory forbearance, and improving banking efficiency.
Md. Jahidul Islam, M. Moniruzzaman, A. H. M. Ziaul Haq et al.· Global Disclosure of Economi...· 0 citations
Firm value remains a central consideration for investors; however, empirical evidence regarding the effects of firm size, liquidity, and capital structure among Sharia-compliant automotive companies remains inconsistent. This study aims to examine the partial and simultaneous effects of firm size, liquidity, and capital structure on firm value. A quantitative approach with an associative explanatory design was employed using data from 12 automotive companies listed in the Indonesian Sharia Stock Index during 2020–2024. Purposive sampling yielded 60 firm-year observations. Secondary data were collected from financial statements and market information and analyzed using panel data regression with EViews 12. The findings indicate that firm size has a negative and significant effect on firm value, whereas liquidity has a positive and significant effect. Capital structure has a negative but statistically insignificant effect on firm value. Simultaneously, the three variables significantly affect firm value, although the model explains only 15.39% of its variation. These findings extend the application of signaling theory by showing that investors interpret corporate financial information based on asset utilization, short-term financial capacity, and financing risk. The study contributes empirical evidence on the determinants of firm value in the context of Sharia-compliant automotive companies. Practically, companies should improve asset productivity, maintain efficient liquidity levels, and align debt decisions with their cash-flow capacity. Future research should incorporate additional determinants, including profitability, dividend policy, corporate governance, and macroeconomic conditions.
Keywords: Capital Structure; Firm Size; Firm Value; Liquidity; Sharia-Compliant Companies
This study examined the effect of board characteristics and internal control quality on the financial performance of deposit money banks in Nigeria, with financial performance operationalised through two accounting outcomes, return on assets and return on equity. Two concerns motivated the enquiry. Recurrent episodes of bank distress and fraud have persisted in Nigeria despite successive governance reforms, which raises the question of whether board structure and control quality deliver measurable performance value in the sector expected to embody them; and the empirical literature has largely examined these mechanisms against a single profitability measure, leaving open whether they surface differently on the asset side and the equity side. Anchored on Agency Theory and complemented by Stewardship and Resource Dependence perspectives, the study specified board characteristics through board size, board independence and gender diversity, entered internal control quality as a fourth regressor, and regressed each of the two outcomes separately on this common set of predictors so that each objective corresponded to one performance dimension. Ten listed deposit money banks with complete records were selected purposively and observed over the period 2015 to 2024, yielding a balanced panel of 100 bank-year observations drawn from audited annual reports and regulatory publications. Data were analysed using descriptive statistics, Pearson correlation and panel regression, with the Hausman test used to select between the fixed and random effects estimators; the random effects estimator was preferred in both models. Board characteristics and internal control quality exerted no significant joint effect on return on assets (R² = 0.026, F = 0.644, p = 0.633), and the first null hypothesis was retained. The same predictors exerted a significant joint effect on return on equity (R² = 0.183, F = 5.320, p = 0.001), driven by board independence and gender diversity, and the second null hypothesis was rejected; internal control quality was insignificant in both models. The study concludes that the governance mechanisms examined register on shareholder returns rather than on asset efficiency, that gender diversity is the most robust governance signal in the data, and that the performance dividend of internal control accrues through risk containment rather than through immediate profitability. It recommends optimal rather than larger boards, deliberate strengthening of independence and female representation, and continued investment in internal control systems appraised on a defensive basis.
A. A, Ajewole O. O.· International journal of res...· 0 citations
This study investigates the effect of Environmental, Social and Governance scores on the financial performance of Indian banks, focusing on the moderating effect of ownership structure. The study examines the link between ESG scores and financial performance using a hierarchical multiple regression analysis of panel data from 224 bank-year observations from selected public and private sector banks in India. Financial performance measures used were Return on Equity and Tobin's Q, while bank-specific control variables are size, leverage, loan to deposit ratio, capital adequacy ratio, non- performing assets and cost to income ratio. The results showed that ESG score had a positive and significant impact on ROE, suggesting that better sustainability practices correlate with higher shareholder returns. Ownership structure was a key moderator of this relationship with public sector banks showing a more positive correlation between ESG and ROE than private sector banks. No statistically significant moderating effect of ownership structure was observed for market-based valuation measures. The study contributes to ESG and banking literature in the Indian context by Providing empirical evidence of differential effectiveness of ESG in different ownership structures. The findings have implications for regulators, investors and bank management to enhance the strategic decision-making and sustainable financial performance based on ESG.
Lokeshwari Dv, Shruthi Mp· International Research Journ...· 0 citations
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