The Impact Of Profitability And Efficiency On Each Other

The hypothesis Sandstrom and Dunn are testing in their (2003) article, “Is Efficiency Overrated?: Minimal Social Interactions Lead to Belonging and Positive Affect” is that the participants who treated the service provider like a weak tie would feel a more positive effect of belongingness and happiness, and be further satisfied with their service compared to treating them like a stranger. The previous research noted by the authors had instigated the focus on how a genuine social interaction with a stranger can bring feelings of belongingness and happiness.

Numerous econometric studies of bank scale and scope economies, efficiency and mergers in U.S. banking have been conducted (Berger and Humphrey, 1994). Berger and Humphrey (1994) stated that economies of scale, economies of scope and x-efficiency are generally able to increase the efficiency of a company, whereby x-efficiency is much more important than scale and scope economies. The academic studies have come to the result that economies of scales indeed allow average costs to fall with increases in bank

Banking industry is currently operating in the maturity stage. There are many players as a result of which the competition is quite high. Competition is broadly based on the levels of fees charged, reputation, the range of services and products provided. As the industry consolidates and the range of services broadens, the size and geographic spread of industry players in increasing. Providing a high set of barriers is the capital and regulatory requirements within the banking sector. Entities that want to start up as a commercial bank and/or investment bank or securities dealer face significant establishment costs in order to gain acceptance and meet market reputation. Furthermore, start-ups require up-front expenses in order to establish proper distribution channels. Globalization is high and the trend is increasing. Cross-border sales and acquisitions of banking operations are also occurring, as assets are shuffled in the race to raise capital.

Normally, each bank tries to attract competitors clients by lower financing, preferred rate and investment services. This market is in the stage who could offer the best product with fastest service at reasonable price however this also causes bank to experience lower margin or return on asset (ROA).

So, the topic that you wanted to discuss for today, innovations for technology that are helping franchisers and franchises with their businesses and obviously that could span a lot of things from efficiency and information sharing. So, I just wanted to hear your initial thoughts on this. What are the advances that you have seen recently that are having an impact on how franchises do business and maximum efficiency?

Athanasoglou, P. P., Brissimis, S. N., & Delis, M. D. (2005). Bank-specific, industry-specific and macroeconomic determinants of bank profitability (32026). Retrieved from Munich Personal RePEc Archive website: http://mpra.ub.uni-muenchen.de/32026/1/MPRA_paper_32026.pdf

The financial sector has been hit badly by the financial crisis in 2008. The increased competition between banks induced executives to take excessive risk to maximize bank’s profit, as their performance compared to other competitors is measured by the revenues they achieve to financial institutions and its stock value (Kashyap, Rajan et al. 2008).

As previously said in the introduction, this paper intends to survey the latest performance of banks belong to the financial industry. The samples are selected by the nation’s economic place in the world, this method can be better explained by the formula below, the GDP figure is from the World Bank’s 2015 GDP ranking statistics.

Our case study is on the Columbia City Bank. First of all we would like to talk about the general inner workings of a bank. A bank generates a profit from the differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. In recent history, investors have demanded a more stable revenue stream and banks have therefore placed more emphasis on transaction fees, primarily loan fees but also including service charges on an array of deposit activities and ancillary services. Lending activities, however, still provide the bulk of a commercial bank's income. Beside, Banks make money from card products through interest payments and fees

A bank measures its performance among other parameters on how much Loan or Credit it has disbursed in a fiscal year or how much Deposit it has collected from the customers etc. Though such data in isolation may not be a true estimate of the efficiency of the business because unregulated disbursal of loans may cause Non Performing Assets (NPAs) which will lower the Retained Earning of the Bank but since the report is concerned only with the Production function of the PSBs hence no comment will be made on this aspect. Similarly how competitively the Deposits have been taken will not be a subject matter of this report.

None of these considered second generation reforms and their impact. Therefore there is a need of comprehensive assessment of the impact of financial sector reforms (especially 2nd phase of reforms i.e. 2002) on banking efficiency. It is to investigate weather efficiency of banking in Pakistan improves or not. For this purpose we used data from 1990 to 2006 for 20 domestic commercial banks. 3

While the global economic condition is still recovering from crisis, many argue that the process is uneven and susceptible to shock (Bank Indonesia, 2015). The recovery process tends to slow down as there is weakened commodity prices and foreign investment, and these factors are inevitably affecting the growth rate of Indonesia. GDP growth is falling from 6.3% in 2007 to a forecasted growth rate of 5.5% in 2015 (Asian Development Bank, 2015). In this case, as a financial intermediary, banks have a strategic role in supporting the national economic growth. It is believed that efficient banking system is essential for the country development. Therefore, a study looking at the efficiency and profitability of Indonesian banks is substantial as it will signal the growth of the Indonesian economy in the future.

I. To examine the impact of effective marketing on the profitability and growth of banks.

Islamic banks have a better N.I/ total interest Income by .2063 points, this advantage shows that Islamic banks are more efficient in making money through transactions. Though the advantage on return on assets falls by around one third to only .0120 points, but Islamic banks in regimes still have an advantage over conventional banks in maximizing the utilization of assets. Return on sales for post-crisis period are also greater for Islamic banks, the difference of almost 5.2% shows that Islamic banks have better profitability than conventional banks. Islamic banks are also 24.41% more cost efficient than conventional banks during post crisis period in regimes.

This paper investigates the efficiency of public and private sector banks in Peshawar. For this purpose, we have taken the secondary data from income statement, balance sheet and other financial reports of banks for the year for the year 2010, 2011 and 2012.We have used ratio analysis technique on financial statements of the two banks to find out the efficiency that which sector banks is more efficient. Both banks are considered very big and important financial institution for providing services to government employee and general publics. The all ratios result reveals that ABL is more efficient than the NBP and on the basis of these findings it accepts the hypothesis that “The private sector banks are more efficient than public sector banks in Peshawar” and reject the hypothesis “The public sector banks are more efficient than private sector banks in Peshawar”. we realize in this study that the private sector banks in Peshawar have better management and control over it as compare to public sectors bank. we suggest that Investors should invest in private sector banks rather t public sector banks in Peshawar and Recommended some good suggestions for the betterment of Public sectors banks.