A study on the internal and external factors affecting the profitability and efficiency of selected foreign commercial and universal banks ten years after liberalization

• Main Authors: Lectura, Edward Louie S., Lim, Leanne Marie O., Qua, Guinevere Joie Y., Tadeo, Austin Bryan C.
• Format: text
• Language: English
• Published: Animo Repository 2011
• Subjects: Banks and banking, Foreign > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18490
• Institution: De La Salle University

This paper aims to determine the effects of the internal and external factors on the profitability and efficiency of the selected foreign commercial and universal banks in the Philippines, ten (10) years after the liberalization (2005-2010). The group chose eleven (11) foreign banks and utilized a time frame of six (6) years. The dependent variable that was used to measure the efficiency of foreign banks was net income after tax to total operating income (NIATTOI) while net interest margin (NIM) and return on assets (ROA) were used to measure profitability. Meanwhile, equity to asset ratio (EQTA), short term funding (STDTA), concentration (CONC), number of branches (BRANCHES), cost to income ratio (CIR), liquidity (LIQ), annual core inflation rate (INFL) and real gross domestic product growth (RGDPG) were used as the independent variables. The researchers found out that STDTA, CONC, and BRANCHES were statistically significant to NIATTOI. For profitability, STDTA, LIQ AND BRANCHES were statistically significant to NIM while EQTA, STDTA, CONC and CIR were statistically significant to ROA. The macroeconomic variables that were used in the study, RGDPG and IFL, have no impact on the foreign banks in the Philippines.