A regionalized assessment of risk and return of selected BSP accredited banks with microfinance functions in the Philippines

• Main Authors: Cabalde, Ritzie Jhoanne S. L., Cayabyab, Joanne Marie S., Maglanque, Macy Monique A., Ysmael, Maria Patricia T., Concepcion, Maria Patricia
• Format: text
• Language: English
• Published: Animo Repository 2012
• Subjects: Banks and banking > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/6304
• Institution: De La Salle University

This paper aims to give a regionalized assessment of profitability and volatility of the five regions in the Philippines with the most number of Bangko Sentral ng Pilipinas (BSP) accredited banks with microfinance functions. These banks have an annualized 10 year financial statements from Securities and Exchange Commission (SEC) period covered from 2002-2011. The regions covered are Region III, NCR, IV-A, V and VI. The study is divided into two analyses, which are the profitability and volatility. Three ratios were used to measure the profitability of the banks with microfinance functions: return on sales (ROS), return on equity (ROE) and return on assets (ROA). For the volatility analysis, the researchers used 5 different regression models. The independent variable used on five regression are the gross regional domestic product (GRDP) and the dependent variables for each are the five key financial variables. These are the net operating income (NOI), return on equity (ROE), profit margins (PM), change in total assets (% in TA) and loan portfolio at risk (PAR). The researchers found out that all the regions were profitable but with varying degrees and no predictable trend. For volatility, GRDP is statistically significant to NOI, ROE, PM % in TA and PAR. GRDP has an impact to the overall fundamental value of the BSP accredited banks with microfinance functions in the Philippines.