On the empirics of bank profitability: Assessing the effects of Basel II Accord

• Main Authors: Alvaro, Jessamine R., Paraleon, Ma. Coleen A., Pronto, John Emmanuel R., Silagan, Rae Louise T.
• Format: text
• Language: English
• Published: Animo Repository 2016
• Subjects: Bank profits > Philippines; Bank capital > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/6285
• Institution: De La Salle University

Assessing profitability is an imperative for financial institutions to determine the degree of influence of various internal and external factors on profitability. Moreover, in the face of regulation such as the Basel II Accord, it raises certain challenges on how it can affect bank performance. Utilizing panel data regression, this study aims to uncover how the Basel II Accord, implemented last July 2007 by the Bangko Sentral ng Pilipinas, affected the profitability of selected Philippine domestic universal banks from the years 2001 to 2014. The results show that: (1) credit risk, diversification, management efficiency, liquidity ratio, and transparency are significant before the presence of Basel II moreover, (2) bank size and capital adequacy became significant and liquidity risk became insignificant during the presence of the said accord.