A study on credit interest margin and efficiency ratios of selected universal banks in the Philippines for the year 2010

• Main Author: Lim, Edralin C.
• Format: text
• Published: Animo Repository 2012
• Subjects: Bank profits—Philippines; Universal banks—Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/faculty_research/6723
• Institution: De La Salle University

The researcher based his sample on eight universal banks in the Philippines from 2003 to 2010. This research used a descriptive design to show the trend of profit efficiency of banks as a result of financial liberalization. It used a correlational analysis to determine the relationship between profit efficiency and its core drivers. The scope of the study is limited to the removal of entry barriers which is one of the six policies of financial liberalization that allowed the entry of the ten foreign banks. To assess the bank's profit efficiency, net interest margin to total assets ratio (net interest income / total assets) was used. The study showed that financial liberalization improved the profit efficiency of banks. It showed that capital to assets ratio and loans to assets ratio are positively related with net interest margin to assets. It also showed that provision for loan losses ratio is negatively related with net interest margin to assets.