Financial crisis and the effect of corporate governance practices on banks’ financial performance

• Main Author: Gnanasigamani, Jerry
• Format: Monograph
• Language: English
• Published: Universiti Utara Malaysia 2009
• Subjects: HG Finance
• Online Access: http://repo.uum.edu.my/2446/1/Financial_Crisis_and_the_Effect_of_Corp_Gove_Practices_on_Bank_Financial_Performance.pdf; http://repo.uum.edu.my/2446/
• Institution: Universiti Utara Malaysia

This paper aims to identify whether the selected corporate governance practices of Malaysian Banks, affect either positively or negatively, its rate of return on equity (ROE).Descriptive research design has been used for this research to describe the characteristic of the banks’ compliance to corporate governance and the impact on its ROE. Data from all ten listed local banks in Malaysia were obtained to measure against four independent variables, ie. the proportion of non-executive directors, the proportion of institutional investors, the level of gearing and the concentration of ownership. It was found that the higher the level of gearing of the bank, the higher is the monitoring role of the lenders and the better would be the bank’s ROE. Future research can also compare pre and post-financial crisis corporate governance practices and its impact on Banks’ financial performances.