Evaluation Of Financial Position And Performance Of Uk Banking Sector

1163 WordsAug 14, 20155 Pages
Topic: Evaluation of Financial Position and Performance of UK Banking Sector with Respect to Liquidity and Profitability Research Background: Several research studies have done not only about the importance of performance evaluation (financial and non financial) of banks but also for the impact of analysis to the economy and various stakeholder groups. Generally the financial performance of banks and other financial institutions has been measured using a combination of financial ratio analysis, measuring performance against budget, benchmarking or a mix of methodologies Avkiran, (1995). Bank performance evaluation is of great importance for individuals because of their needs to safe against banking with a risk-running bank or due to the speculative motives linked to the activities on the capital market Hunjak, (2001). Competition in the banking sector forces banks to use their resources effectively and performance evaluation of commercial bank have an important role in service sector Ertugrul and Karakasaoglu, (2009). According to Jeon and Miller, (2006) bank performance is described in terms of bank profitability and productivity in banking. Furthermore, Melvin and Hirt, (2005) explained that performance may also refer to the development of share price, profitability or the present valuation of a company. According to Brigham and Ehrhardt, (2005) bank performance represents balance between profitability and liquidity of bank in banking field. While profitability is usually
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