IDEAS home Printed from https://ideas.repec.org/a/ush/jaessh/v7y2012i2(20)_summer2012p179.html
   My bibliography  Save this article

Financial Strength As An Indicator For Measuring Bank Competitiveness: An Empirical Evidence From Indian Banking Industry

Author

Listed:
  • Priya PONRAJ
  • Gurusamy RAJENDRAN

Abstract

Liberalization and globalization has led Indian banking companies to focus on quality of service, speed and cost to face severe competition. The paper measures the bank competitiveness among the select Indian commercial banks in terms of financial strength. A bank is said to be competitive if it is financially strong. Financial strength of the bank is measured in terms of financial ratios viz. efficiency ratio, profitability ratio, capital adequacy ratio, income-expenditure ratio, deposits and return ratios. Factor analysis is used to structure and detect the components of financial strength. The competitive position mapping of the public sector, private sector and foreign banks is obtained by applying discriminant analysis. It is found that foreign banks are the most competitive compared to the private and public sector banks in terms of the profitability ratio, returns ratio and capital adequacy ratio.

Suggested Citation

  • Priya PONRAJ & Gurusamy RAJENDRAN, 2012. "Financial Strength As An Indicator For Measuring Bank Competitiveness: An Empirical Evidence From Indian Banking Industry," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 7(2(20)/ Su), pages 179-188.
    • Handle: RePEc:ush:jaessh:v:7:y:2012:i:2(20)_summer2012:p:179
    as

    Download full text from publisher

    File URL: http://www.jaes.reprograph.ro/articles/Summer2012/articles/PonrajP_RajendranG.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Claessens, Stijn & Demirguc-Kunt, Asl[iota] & Huizinga, Harry, 2001. "How does foreign entry affect domestic banking markets?," Journal of Banking & Finance, Elsevier, vol. 25(5), pages 891-911, May.
    2. Barajas, Adolfo & Steiner, Roberto & Salazar, Natalia, 2000. "The impact of liberalization and foreign investment in Colombia's financial sector," Journal of Development Economics, Elsevier, vol. 63(1), pages 157-196, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alberto Franco Pozzolo, 2009. "Bank Cross-Border Mergers and Acquisitions: Causes, Consequences, and Recent Trends," Springer Books, in: Alberto Zazzaro & Michele Fratianni & Pietro Alessandrini (ed.), The Changing Geography of Banking and Finance, edition 1, chapter 0, pages 155-183, Springer.
    2. Claessens, Stijn & van Horen, Neeltje, 2012. "Being a foreigner among domestic banks: Asset or liability?," Journal of Banking & Finance, Elsevier, vol. 36(5), pages 1276-1290.
    3. Cull, Robert & Martinez Peria, Maria Soledad, 2007. "Foreign bank participation and crises in developing countries," Policy Research Working Paper Series 4128, The World Bank.
    4. Meriem Haouat & Diego N. Moccero & Ramiro Sosa Navarro, 2012. "Foreign Banks and Credit Volatility: The Case of Latin American Countries," Review of International Economics, Wiley Blackwell, vol. 20(5), pages 1017-1033, November.
    5. Fungáčová, Zuzana & Poghosyan, Tigran, 2011. "Determinants of bank interest margins in Russia: Does bank ownership matter?," Economic Systems, Elsevier, vol. 35(4), pages 481-495.
    6. Linda S. Goldberg, 2007. "Financial sector FDI and host countries: new and old lessons," Economic Policy Review, Federal Reserve Bank of New York, vol. 13(Mar), pages 1-17.
    7. Nabiyev, Javid & Musayev, Kanan & Yusifzada, Leyla, 2016. "Banking Competition and Financial Stability: Evidence from CIS," MPRA Paper 72167, University Library of Munich, Germany.
    8. Manlagñit, Maria Chelo V., 2011. "The economic effects of foreign bank presence: Evidence from the Philippines," Journal of International Money and Finance, Elsevier, vol. 30(6), pages 1180-1194, October.
    9. Fungáčová, Zuzana & Poghosyan, Tigran, 2011. "Determinants of bank interest margins in Russia: Does bank ownership matter?," Economic Systems, Elsevier, vol. 35(4), pages 481-495.
    10. Mulyaningsih, Tri & Daly, Anne & Miranti, Riyana, 2015. "Foreign participation and banking competition: Evidence from the Indonesian banking industry," Journal of Financial Stability, Elsevier, vol. 19(C), pages 70-82.
    11. Adrian E. Tschoegl, 2004. "Financial Crises and the Presence of Foreign Banks," International Finance 0405016, University Library of Munich, Germany.
    12. Poghosyan, Tigran, 2010. "Re-examining the impact of foreign bank participation on interest margins in emerging markets," Emerging Markets Review, Elsevier, vol. 11(4), pages 390-403, December.
    13. Cavid Nabiyev & Kanan Musayev & Leyla Yusifzada, 2016. "Banking Competition and Financial Stability: Evidence from CIS Countries," Working Papers 1604, Central Bank of Azerbaijan Republic.
    14. Linda S. Goldberg, 2004. "Financial-sector foreign direct investment and host countries: new and old lessons," Staff Reports 183, Federal Reserve Bank of New York.
    15. Cerutti, Eugenio & Dell'Ariccia, Giovanni & Martinez Peria, Maria Soledad, 2007. "How banks go abroad: Branches or subsidiaries?," Journal of Banking & Finance, Elsevier, vol. 31(6), pages 1669-1692, June.
    16. Nicholas Addai Boamah & Emmanuel Opoku & Kingsley Opoku Appiah, 2022. "Efficiency, foreign banks presence, competition and risk exposure of banks in middle-income economies," SN Business & Economics, Springer, vol. 2(8), pages 1-21, August.
    17. Okuda, Hidenobu & Rungsomboon, Suvadee, 2006. "Comparative cost study of foreign and Thai domestic banks in 1990-2002: Its policy implications for a desirable banking industry structure," Journal of Asian Economics, Elsevier, vol. 17(4), pages 714-737, October.
    18. Yin, Haiyan, 2019. "Bank globalization and financial stability: International evidence," Research in International Business and Finance, Elsevier, vol. 49(C), pages 207-224.
    19. Meriem Haouat & Diego N. Moccero & Ramiro Sosa Navarro, 2012. "Foreign Banks and Credit Volatility: The Case of Latin American Countries," Review of International Economics, Wiley Blackwell, vol. 20(5), pages 1017-1033, November.
    20. Poghosyan, Tigran, 2013. "Financial intermediation costs in low income countries: The role of regulatory, institutional, and macroeconomic factors," Economic Systems, Elsevier, vol. 37(1), pages 92-110.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ush:jaessh:v:7:y:2012:i:2(20)_summer2012:p:179. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Laura Stefanescu (email available below). General contact details of provider: https://edirc.repec.org/data/fmuspro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.