A study on the determinants of investment practices of selected commercial banks from the year 1995 to 1999

• Main Authors: Bui, Le N., Pineda, Eduardo G., Santiago, Ronaldo M., Tabilog, Andy Carlo A.
• Format: text
• Language: English
• Published: Animo Repository 2000
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/17053
• Institution: De La Salle University

A study on the prevailing investment practices of selected commercial banks for the period of five years was chosen by our group to be the subject matter of this study. Since these banks' total assets represent 70.4% of the total assets of all the commercial banks listed by the Bangko Sentral ng Pilipinas, the proponents believe that the results would be convincing or believable. To determine the determinants of the investments practices of the selected banks, the theory of portfolio choice was applied. In addition, a multiple-choice questionnaire was distributed to these banks to be able to gather responses from the practitioners. Also, financial statements of these banks were referred to and were used as basis of the computations made. The factors reflecting the economic and financial condition of the country were also taken into consideration. From the above procedures, it was developed by the proponents that all these banks follow the same pattern in determining their investments. And this pattern points to only one - liquidity as their top priority. The study also proves that the economic indicators do not affect the way banks realize profit from their investments. It was also noted from the study the banks' preference in loan extension as their main source of generating income.