Effects of risk management capabilities on the bank stocks of the publicly listed universal banks in the Philippines for the period of 2005-2009

• Main Authors: Dytiandu, Rogelyn L., Ong, John Kevin O., Velasco, Ma. Samantha Claire P.
• Format: text
• Language: English
• Published: Animo Repository 2010
• Subjects: Universal banks > Philippines; Banks and banking > Risk management > Philippines; Bank stocks > Philippines; Financial risk management > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18342
• Institution: De La Salle University

This paper established the effect of the risk management capabilities of the banks and bank stock prices of the universal banks with publicly listed stocks in the Philippines. Using four indicators of the risk management capabilities namely interest rate risk or net interest margin (NETIM), credit risk or capital adequacy ratio (CAR), capital or solvency risk or provisions (PROV) and natural hedging strategies or non-interest rate risk (NONIM), the group used fixed effects regression--to determine the regression to be used, the group utilized Hausman's test, the variance inflation factor to check the multicollinearity and the Breush-Pagan test to test the heteroscedasticity. Lastly the group utilized feasibility generalized least squares to cure the multicollinearity and the heterogeneity. These steps and tests were made used by the group to be able to accurately determine the effects of the four risk management capabilities of the bank stocks prices.