Issue #2 (Volume 12 2017)

Financial system supports economic growth, while its regulatory framework provides stability for investors. Develo-ping countries with bank-oriented financial systems are not attractive to investors, so prolonged status quo leads to economic deterioration. This is particularly the case with some of the most underdeveloped areas in Europe: Western Balkans. It is essential the developing countries in this region consider steps towards financial liberalization, which will help open the borders for capital flows and attract new investments. The main goal of this paper is to review and present the available information related to the banking system development in Western Balkans in terms of ownership structure, capital adequacy, loan and asset performance, return on investment and liquidity. These indicators should provide a clearer picture of the current financial systems in Western Balkans economies and their development progress – useful for comparison with other developing regions and financial transformation and liberalization efforts.

Small retail businesses are essential for the growth of the South African economy. Though many of these business entities need more assets to seize business opportunities, previous research studies suggest that their overall access to finance through banks and other finance providers seems to be limited. In general, small retail businesses are usually managed by entrepreneurs who lack financial knowledge, but banks, when deciding on credit applications, rely heavily on financial information, which is provided by these entrepreneurs. Notwithstanding the aforementioned, this study aimed to explore barriers that limit access to finance for South African small retailers, from the perspectives of finance providers (banking institutions) and finance seekers (small retailers). Additionally, measures were highlighted to show how those hurdles could be overcome. Qualitative research was conducted, whereby data were collected via semi-structured interviews with management personnel at banks and other financial institutions, as well as independent experts and small retail business owners and managers. The findings show that many financing opportunities are available to small retail businesses, but access to these opportunities is limited mainly owing to, inter alia, strict bank regulations and factors that are inherent to small retail business owners.

In an attempt to shed more light on the behavior of lending in banks, especially in the environment of developing countries, this study aims at explaining the impact of some factors proposed as determinants of bank lending in Jordanian commercial banks by benefiting from the financial reports of thirteen banks during the period 2010-2016. The study, in order to achieve the objectives and to test the main hypotheses has adopted Ordinary least square model (OLS). The most important results of the study are a statistically significant adverse effect of both credit risk and liquidity on bank lending, while there is a significant positive effect of the return on assets, size of the bank measured by assets, inflation, money supply and growth in gross domestic product in determining the level of lending. In addition, the study does not show a significant statistical effect between investments, the volume of deposits and bank lending in the same time frame. The review points out that because of the negative impact of liquidity and credit risk factors, commercial banks need to focus more on reducing their impact because presence of this impact at the end will decrease the ability of these banks to provide loans and stay in the banking market.

As interest margins of credit institutions affect economic performance of countries, finding out which are the main determinants of their evolution is a research task of great interest at current times. This is the purpose of the present paper as regards to the Spanish case over the period 2004-2012. Based on the econometric contributions by Ho and Saunders (1981) and some of its extensions, the authors develop a model that includes as explanatory variables the factors usually examined in the literature and other singular variables that might be relevant. Particularly, the rate of leverage, the quality of their assets measured according to their risk, and the profit obtained from the selling of assets, including real estate ones. The research also provides an analysis of differences between banks and savings banks.

Access to bank financing is regularly rated as one of the biggest obstacles to SME sustainability. With the introduction of the independent review as an alternative to the statutory audit, banks may have inevitably lost their risk assessment reassurance that audits provided. Previous research found that banks have adjusted to this situation by no longer insisting on audited financial statements. The research undertaken in this study aims to, firstly, investigate SME owner/managers’ perceptions about what banks require when assessing bank loan applications; and, secondly, to gauge SME owner/manager’s attitudes towards the value they perceive accounting may contribute to their sustainability. It was found from an SME perspective, that although an independent review is the current way to go, many SME owner/managers consider their own accounting skills, as the language of business, to be lacking. This could potentially have repercussions in inadvertently promoting further asymmetric financial information, and thereby limiting successes in obtaining finance.

Capital stability of the banking system is the basis of its effective development and realization of its main function – optimal redistribution of capital. So, the aim of the article is to develop indicators of capital stability of the banking system, and to propose the frameworks for the long term capital stability strategy of the banking system in Ukraine. For this purpose, the analysis of micro- and macroeconomic indicators of the capital stability of domestic banks within the period 2007–2016 is made. To carry out the research, there were used the statistic data of the National Bank of Ukraine, its legislative and regulatory documents, the Basel Accords.

Capital stability of the banking system has been defined in the article as the process of ensuring capitalization that is adequate to the banking risks and cyclical economic development. It has been detected that a significant reduction in return on equity of the Ukrainian banks in 2014–2015 even with restoring their liquidity has had a crucial destabilizing impact on their capital stability. In order to improve the assessment of capital stability, its key indicators for the groups of domestic banks have been studied. The necessity of refocusing macroprudential requirements of the National Bank of Ukraine from quantitative indicators to qualitative ones to ensure economic development has been proved. It has been concluded that a necessary condition for restoring the Ukrainian banking system was to develop an effective strategy for ensuring its capital stability, which should be focused on the creation of its diversified structure.

This study was aimed to discover the direct influences of rational, emotional, and spiritual marketing on satisfaction, trust, and loyalty of Shariah banking customers in Medan. This study was an associative research, which is a research connecting two variables or more to see the influence of one variable on another. This study was conducted by means of an exploratory approach. The population in this study was Shariah Banking customers in Medan. Total sample was 200 customers from 64 branches of Shariah banks across Medan. By using path analysis with SPSS 21 program, the results showed that there were direct and indirect influences of rational, emotional, and spiritual marketing on customer satisfaction, trust, and loyalty. Only emotional marketing variable had insignificant influence on the satisfaction of Shariah banking customers in Medan. This study was limited to impact of rational, emotional, spiritual marketing variables on satisfaction, trust, and loyalty of Shariah banking customers. Other variables which influence satisfaction, trust, and loyalty such as customer relationship management (CRM) and portfolio performance should be used, because they’re factors which influence consumer behavior. For Shariah banking in Medan, the research result was expected to give useful suggestions and inputs for Shariah banking in Medan in implementing marketing strategies, especially rational, emotional, and spiritual.

Despite the benefits that mobile banking has to offer, coupled with positive mobile penetration rates, the use of mobile devices to perform banking transactions and access financial information is not as widespread as expected. The significantly sized Generation Y cohort is a rewarding market segment for retail banks. In South Africa, however, this cohort’s mobile banking adoption is largely under-researched. Understanding the antecedents that positively influence Generation Y students’ attitudes towards and usage behavior of mobile banking will assist retail banks in their efforts to tailor their business and marketing strategies effectively towards this cohort, and in doing so, foster increased acceptance of their mobile channels. As such, the purpose of this study was to extend the technology acceptance model (TAM) and determine the influence of perceived ease of use, relative advantage, subjective norms, perceived behavioral control, perceived integrity and the perceived system quality of mobile banking on South African Generation Y students’ attitudes towards and usage behavior of mobile banking. Following a descriptive research design, self-administered questionnaires were completed by a non-probability convenience sample of 334 students registered at the campuses of three registered public South African universities located in the Gauteng province. Data analysis included correlation analysis and structural equation modeling. The findings suggest that while perceived ease of use, perceived integrity and the perceived system quality predict Generation Y students’ mobile banking usage behavior, subjective norms, perceived behavioral control and the perceived relative advantage of mobile banking predict attitudes towards mobile banking, which, in turn, predict their mobile banking usage behavior.

This study examines the determinants of productive efficiency of banks operating in 8 member countries of the Association of Southeast Asian Nations (ASEAN). This study uses the economic theory approach to examine the existence of economies of scale on the ASEAN banking market, especially its impact on cost efficiency. The author applies a concept of average cost (AC) as a proxy for the productive efficiency. He finds that economies of scale exist on the banking market and economies of scale and scope should be considered in the industrial policy. Stronger capital position is also positive to banks’ efficiency and means that stronger capitalized banks are more efficient. Bank that remunerates better tends to be more efficient as a result of economic capital effect.

This study aims to examine the opinions of Zenith Bank employees on the value, content and processes, as well as the challenges of Integrated Reporting (IR) in Nigeria with the hope of highlighting recommendations to encourage organizations to adopt it. Ninetyeight employees responded to our survey. Generally, the respondents agree that IR has value that could lead to better reporting of corporate activities. They also identified challenges that could mitigate the value of IR. It was, however, noted that some of the challenges could be overcome with time, given that IR framework exists that is being tested by a number of organizations. The study recommends that there should be awareness campaigns to sensitize organizations on the value of IR. This paper contributes to the extant literature by offering insights of Zenith Bank employees on IR.

Since customer loyalty is key, especially in the highly competitive commercial banking environment, this article evaluated the effects of features of electronic customer relationship management (e-CRM) on customer loyalty. Using a cross-sectional survey design, data were collected from a convenience sample of customers of a major international Kenyan bank using self-administered questionnaires. The findings based on correlation and multiple regression analyses, revealed that pre-service, during (the) service and post transactional e-CRM features have a positive and significant relationship with loyalty, and that the pre-service and during service features significantly predict loyalty. Thus, enhancing e-CRM practices could be a strategic competitive tool to impact the banks’ relationship with their customers.

This study investigates how the implementation of Enterprise Risk Management program affects the performance of firms using an Enterprise Risk Management model for the banking sector and an integrated model for measuring Enterprise Risk Management index used in the study by Mukhtar and Soliman (2016). Ten listed commercial banks were selected with the Enterprise Risk Management index as the main independent variable, with Return on Average Equity (ROAE), Share Price Return (SPR) and Firm Value (FV) used as three separate dependent variables. The study provides strong evidence of a positive relationship between Enterprise Risk Management implementation and performance in the Nigerian banking sector. The findings and conclusions of this study are consistent with those of other studies that used data from different industries, providing a basis from which to generalize the findings from this study to firms in other industries.