Liquid Asset Holdings and Banking Profitability: Evidence from South Asia

1 Abdelaziz, H., Rim, B. & Helmi, H. (2022). The Interactional Relationships Between Credit Risk, Liquidity Risk and Bank Profitability in MENA Region. Global Business Review, 23(3), 561–583. https://doi.org/10.1177/0972150919879304 Search in Google Scholar

2 Adelopo, I., Lloydking, R. & Tauringana, V. (2018). Determinants of bank profitability before, during, and after the financial crisis. International Journal of Managerial Finance, 14(4), 378–398. https://doi.org/10.1108/IJMF-07-2017-0148 Search in Google Scholar

3 Aiyar, S., Mitra, S., Jobst, A., Mineshima, A., Dao, M., & Pradhan, M. (2021). COVID-19: How Will European Banks Fare? Departmental Papers, 2021(008), 1. https://doi.org/10.5089/9781513572772.087 Search in Google Scholar

4 Akter, A. & Mahmud, K. (2014). Liquidity-Profitability Relationship in Bangladesh Banking Industry. International Journal of Empirical Finance, 2(4), 143–151. Search in Google Scholar

5 Akter, R. & Roy, J. K. (2017). The Impacts of Non-Performing Loan on Profitability: An Empirical Study on Banking Sector of Dhaka Stock Exchange. International Journal of Economics and Finance, 9(3), 126. https://doi.org/10.5539/ijef.v9n3p126 Search in Google Scholar

6 Al-Qadi, N. S. & Khanji, I. M. (2018). Relationship between liquidity and profitability: An empirical study of trade service sector in Jordan. Research Journal of Finance and Accounting Www.Iiste.Org ISSN, 9(7), 153–157. Retrieved from https://www.researchgate.net/publication/324877754 Search in Google Scholar

7 Albulescu, C. T. (2015). Banks’ Profitability and Financial Soundness Indicators: A Macro-level Investigation in Emerging Countries. Procedia Economics and Finance, 23, 203–209. https://doi.org/10.1016/s2212-5671(15)00551-1 Search in Google Scholar

8 Alqahtani, F., Mayes, D. G. & Brown, K. (2016). Economic turmoil and Islamic banking: Evidence from the Gulf Cooperation Council. Pacific Basin Finance Journal, 39, 44–56. https://doi.org/10.1016/j.pacfin.2016.05.017 Search in Google Scholar

9 Alqahtani, F., Mayes, D. G. & Brown, K. (2017). Reprint of Economic turmoil and Islamic banking: Evidence from the Gulf Cooperation Council. Pacific Basin Finance Journal, 42, 113–125. https://doi.org/10.1016/j.pacfin.2016.06.013 Search in Google Scholar

10 Altavilla, C., Canova, F., & Ciccarelli, M. (2020). Mending the broken link: Heterogeneous bank lending rates and monetary policy pass-through. Journal of Monetary Economics, 110, 81–98. https://doi.org/10.1016/j.jmoneco.2019.01.001 Search in Google Scholar

11 Alzoubi, T. (2017). Determinants of liquidity risk in Islamic banks. Banks and Bank Systems, 12(3), 142–148. https://doi.org/10.21511/bbs.12(3).2017.10 Search in Google Scholar

12 Angbazo, L. (1997). Commercial bank net interest margins, default risk, interest-rate risk, and off-balance sheet banking. Journal of Banking and Finance, 21(1), 55–87. https://doi.org/10.1016/S0378-4266(96)00025-8 Search in Google Scholar

13 Angori, G., Aristei, D. & Gallo, M. (2019). Determinants of banks’ net interest margin: Evidence from the Euro Area during the crisis and post-crisis period. Sustainability (Switzerland), 11(14). https://doi.org/10.3390/su11143785 Search in Google Scholar

14 Athanasoglou, P. P., Brissimis, S. N. & Delis, M. D. (2008). Bank-specific, industry-specific and macroeconomic determinants of bank profitability. Journal of International Financial Markets, Institutions and Money, 18(2), 121–136. https://doi.org/10.1016/j.intfin.2006.07.001 Search in Google Scholar

15 Banna, H., Ahmad, R. & Koh, E. H. Y. (2017). Determinants of Commercial Banks’ Efficiency in Bangladesh: Does Crisis Matter? The Journal of Asian Finance, Economics and Business, 4(3), 19–26. https://doi.org/10.13106/jafeb.2017.vol4.no3.19 Search in Google Scholar

16 Barajas, A., Steiner, R. & Salazar, N. (2000). The impact of liberalization and foreign investment in Colombia’s financial sector. In Journal of Development Economics (Vol. 63, pp. 157–196). https://doi.org/10.1016/S0304-3878(00)00104-8 Search in Google Scholar

17 Ben Jedidia, K. (2020). Profit- and loss-sharing impact on Islamic bank liquidity in GCC countries. Journal of Islamic Accounting and Business Research, 11(9), 1791–1806. https://doi.org/10.1108/JIABR-10-2018-0157 Search in Google Scholar

18 Berger, A. N. (1995). The Relationship between Capital and Earnings in Banking. Journal of Money, Credit and Banking, 27(2), 432. https://doi.org/10.2307/2077877 Search in Google Scholar

19 Berger, A. N. & Bouwman, C. H. S. (2009). Bank liquidity creation. Review of Financial Studies, 22(9), 3779–3837. https://doi.org/10.1093/rfs/hhn104 Search in Google Scholar

20 Berger, A. N. & Bouwman, C. H. S. (2013). How does capital affect bank performance during financial crisesα. Journal of Financial Economics, 109(1), 146–176. https://doi.org/10.1016/j.jfineco.2013.02.008 Search in Google Scholar

21 Berrospide, J. M. & Edge, R. M. (2010). The effects of bank capital on lending: What do we know, and what does it mean? International Journal of Central Banking, 6(4), 5–54. https://doi.org/10.17016/feds.2010.44 Search in Google Scholar

22 Bitar, M., Kabir Hassan, M. & Hippler, W. J. (2018). The determinants of Islamic bank capital decisions. Emerging Markets Review, 35, 48–68. https://doi.org/10.1016/j.ememar.2017.12.002 Search in Google Scholar

23 Bonfim, D., & Soares, C. (2018). The Risk-Taking Channel of Monetary Policy: Exploring All Avenues. Journal of Money, Credit and Banking, 50(7), 1507–1541. https://doi.org/10.1111/jmcb.12500 Search in Google Scholar

24 Bordeleau, É. & Graham, C. (2020). The impact of liquidity on bank profitability: Case of Tunisia. European Journal of Accounting, Auditing and Finance Research (Vol. 8). Bank of Canada. https://doi.org/10.37745/ejaafr/vol8.no2.pp20-37.2020 Search in Google Scholar

25 Bourke, P. (1989). Concentration and other determinants of bank profitability in Europe, North America and Australia. Journal of Banking and Finance, 13(1), 65–79. https://doi.org/10.1016/0378-4266(89)90020-4 Search in Google Scholar

26 Bouzgarrou, H., Jouida, S. & Louhichi, W. (2018). Bank profitability during and before the financial crisis: Domestic versus foreign banks. Research in International Business and Finance, 44, 26–39. https://doi.org/10.1016/j.ribaf.2017.05.011 Search in Google Scholar

27 Christopher Graham, É. B. (2020). The impact of liquidity on bank profitability: Case of Tunisia. European Journal of Accounting, Auditing and Finance Research, 8(2), 20–37. https://doi.org/10.37745/ejaafr/vol8.no2.pp20-37.2020 Search in Google Scholar

28 Chronopoulos, D. K., Liu, H., McMillan, F. J., & Wilson, J. O. S. (2015). The dynamics of US bank profitability. European Journal of Finance, 21(5), 426–443. https://doi.org/10.1080/1351847X.2013.838184 Search in Google Scholar

29 Dabiri, M. A. O. (2017). Analysis of Profitability and Liquidity: an Empirical Investigation of Islamic Banks in Malaysia and in the United Kingdom. Asian Journal of Multidisciplinary Studies, (April). Search in Google Scholar

30 Dahiyat, A. (2016). Does Liquidity and Solvency Affect Banks Profitability? Evidence from Listed Banks in Jordan. International Journal of Academic Research in Accounting, Finance and Management Sciences, 6(1). https://doi.org/10.6007/ijarafms/v6-i1/1954 Search in Google Scholar

31 Davydov, D., Vähämaa, S., & Yasar, S. (2021). Bank liquidity creation and systemic risk. Journal of Banking and Finance, 123. https://doi.org/10.1016/j.jbankfin.2020.106031 Search in Google Scholar

32 Demirgüç-Kunt, A., & Huizinga, H. (1999). Determinants of commercial bank interest margins and profitability: Some international evidence. World Bank Economic Review, 13(2), 379–408. https://doi.org/10.1093/wber/13.2.379 Search in Google Scholar

33 Demsetz, H. (1973). Industry Structure, Market Rivalry, and Public Policy. The Journal of Law and Economics, 16(1), 1–9. https://doi.org/10.1086/466752 Search in Google Scholar

34 Dewi, A., Lailiyah, E. H., Nataliawati, R. & Sayyid, M. (2021). the Effect of the Covid-19 Pandemic on Financial Performance in the Indonesian Banking Sector. Accounting and Financial Management, 18–22. Search in Google Scholar

35 Dietrich, A. & Wanzenried, G. (2011). Determinants of bank profitability before and during the crisis: Evidence from Switzerland. Journal of International Financial Markets, Institutions and Money, 21(3), 307–327. https://doi.org/10.1016/j.intfin.2010.11.002 Search in Google Scholar

36 Doan, T. T. T. & Bui, T. N. (2021). How does liquidity influence bank profitability? A panel data approach. Accounting, 7(1), 59–64. https://doi.org/10.5267/j.ac.2020.10.014 Search in Google Scholar

37 Doku, J. N., Kpekpena, F. A. & Boateng, P. Y. (2019). Capital Structure and Bank Performance: Empirical Evidence from Ghana. African Development Review, 31(1), 15–27. https://doi.org/10.1111/1467-8268.12360 Search in Google Scholar

38 Fajri, M. Z. N., Muhammad, A. A., Umam, K., Putri, L. P. & Ramadhan, M. A. (2022). The Effect Covid-19 and Sectoral Financing on Islamic Bank Profitability in Indonesia. Journal of Islamic Economic Laws, 5(1), 38–60. https://doi.org/10.23917/jisel.v5i1.17181 Search in Google Scholar

39 Febrinta Br Bukit, R. C., Muda, I. & Abubakar, E. (2021). The Effect of Profitability and Liquidity on Firm Value with Leverage as Moderating Variable in Companies That are Joined in LQ45 and Listed on the Indonesia Stock Exchange for the Period 2007-2019. International Journal of Research and Review, 8(7), 344–352. https://doi.org/10.52403/ijrr.20210748 Search in Google Scholar

40 Ghosh, A. (2015). Banking-industry specific and regional economic determinants of non-performing loans: Evidence from US states. Journal of Financial Stability, 20, 93–104. https://doi.org/10.1016/j.jfs.2015.08.004 Search in Google Scholar

41 Gideon, F., Petersen, M. A., Mukuddem-Petersen, J. & De Waal, B. (2012). Bank liquidity and the global financial crisis. Journal of Applied Mathematics, 2012. https://doi.org/10.1155/2012/743656 Search in Google Scholar

42 Godspower-Akpomiemie, E. & Ojah, K. (2021). Market discipline, regulation and banking effectiveness: Do measures matter? Journal of Banking and Finance, 133, 106249. https://doi.org/10.1016/j.jbankfin.2021.106249 Search in Google Scholar

43 Haider, J., & Mohammad, K. U. (2022). The Effect of Covid-19 on Bank Profitability Determinants of Developed and Developing Economies. IRASD Journal of Economics, 4(2), 187–203. https://doi.org/10.52131/joe.2022.0402.0072 Search in Google Scholar

44 Hermuningsih, S., Kirana, K. C. & Erawati, T. (2019). Does Growth Opportunities Moderate the Relationship Between Profitability and Liquidity Toward Firm Value? Jbfem, 2(1), 1–8. https://doi.org/10.32770/jbfem.vol21-8 Search in Google Scholar

45 Hossain, I. & Alam, J. (2019). The Relationship between Liquidity and Profitability in Emerging Countries: Evidence from Bangladesh. Journal of Finance and Accounting, 7(1), 22–27. Retrieved from http://pubs.sciepub.com/jfa/7/1/4 Search in Google Scholar

46 Islam, A., Farooq, M. & Ahmad, A. (2017). Factors Affecting Liquidity Position of Islamic Banks. City University Research Journal, (Special Issue), 27–36. Search in Google Scholar

47 Islam, M. S. & Nishiyama, S. I. (2016). The determinants of bank net interest margins: A panel evidence from South Asian countries. Research in International Business and Finance, 37, 501–514. https://doi.org/10.1016/j.ribaf.2016.01.024 Search in Google Scholar

48 Javaid, S. & Alalawi, S. (2018). Performance and profitability of Islamic banks in Saudi Arabia: An empirical analysis. Asian Economic and Financial Review, 8(1), 38–51. https://doi.org/10.18488/journal.aefr.2018.81.38.51 Search in Google Scholar

49 Jaworski, J. & Czerwonka, L. (2021). Meta-study on the relationship between profitability and liquidity of enterprises in macroeconomic and institutional environment. Decision, 48(2), 233–246. https://doi.org/10.1007/s40622-021-00280-y Search in Google Scholar

50 Karim, B. K., Sami, B. A. M. & Hichem, B. K. (2010). Bank-specific, industry-specific and macroeconomic determinants of African Islamic banks’ profitability. International Journal of Business and Management Science, 3(1), 39–56. Search in Google Scholar

51 Katusiime, L. (2021). COVID 19 and Bank Profitability in Low Income Countries: The Case of Uganda. Journal of Risk and Financial Management, 14(12), 588. https://doi.org/10.3390/jrfm14120588 Search in Google Scholar

52 Kuknor, S. & Rastogi, S. (2021). Determinants of Profitability in Indian Banks: a Panel Data Analysis. International Journal of Modern Agriculture, 10(2), 2021. Retrieved from http://saspjournals.com/sjebm Search in Google Scholar

53 Lartey, V. C., Antwi, S. & Boadi, E. K. (2013). The Relationship between Liquidity and Profitability of Listed Banks in Ghana. International Journal of Business and Social Science, 4(3). Search in Google Scholar

54 Lee, J. Y., & Kim, D. (2013). Bank performance and its determinants in Korea. Japan and the World Economy, 27, 83–94. https://doi.org/10.1016/j.japwor.2013.05.001 Search in Google Scholar

55 Lemonjava, K. G. G. (2018). A Study of Relationship between Liquidity and Profitability in Georgian Banking Sector. International Journal of Science and Research (IJSR), 7(4), 1609–1613. Retrieved from https://www.ijsr.net/archive/v7i4/ART20181909.pdf Search in Google Scholar

56 Liu, H., & Wilson, J. O. S. (2010). The profitability of banks in Japan. Applied Financial Economics, 20(24), 1851–1866. https://doi.org/10.1080/09603107.2010.526577 Search in Google Scholar

57 Marozva, G. (2021). Liquidity Mismatch Index and Bank Performance. International Journal of Financial Research, 12(5), 277. https://doi.org/10.5430/ijfr.v12n5p277 Search in Google Scholar

58 Mashamba, T. (2022). Liquidity Dynamics of Banks in Emerging Market Economies. Journal of Central Banking Theory and Practice. https://doi.org/10.2478/jcbtp-2022-0008 Search in Google Scholar

59 Mdaghri, A. A. & Oubdi, L. (2022). Bank-Specific and Macroeconomic Determinants of Bank Liquidity Creation: Evidence from MENA Countries. Journal of Central Banking Theory and Practice. https://doi.org/10.2478/jcbtp-2022-0013 Search in Google Scholar

60 Mebounou, T. G. C., Karan, M. B. & Dannon, H. (2015). Liquidity and bank profitability in WAEMU zone: A panel data analysis. Afro-Asian Journal of Finance and Accounting, 5(2), 113–134. https://doi.org/10.1504/AAJFA.2015.069888 Search in Google Scholar

61 Mishra, P., Pandey, C. M., Singh, U., Gupta, A., Sahu, C. & Keshri, A. (2019). Descriptive statistics and normality tests for statistical data. Annals of Cardiac Anaesthesia, 22(1), 67–72. https://doi.org/10.4103/aca.ACA_157_18 Search in Google Scholar

62 Mohammad, K. U., Muhammad, A. & Muhammad, K. U. (2021). Post-Crisis Behavior of Banks in Asia: A Case of Chronic Over-Capitalization. Journal of Asian Finance, Economics and Business, 8(3), 517–525. https://doi.org/10.13106/jafeb.2021.vol8.no3.0517 Search in Google Scholar

63 Mohammed, K. (2022). The Moderating Role of Covid-19 on Determinants of Bank Spread. Pakistan Social Sciences Review, 6(II), 538–553. https://doi.org/10.35484/pssr.2022(6-ii)46 Search in Google Scholar

64 Mongid, A. (2016). Global Financial Crisis (GFC) And Islamic Banks Profitability: Evidence From MENA Countries. Journal of Emerging Economies and Islamic Research, 4(1), 6. https://doi.org/10.24191/jeeir.v4i1.9074 Search in Google Scholar

65 Mosharrafa, R. A.-& Islam, M. S. (2021). What Drives Bank Profitability? A Panel Data Analysis of Commercial Banks in Bangladesh. International Journal of Finance & Banking Studies (2147-4486), 10(2), 96–110. https://doi.org/10.20525/ijfbs.v10i2.1236 Search in Google Scholar

66 Musa, H., Musova, Z., Natorin, V., Lazaroiu, G., & Boďa, M. (2021). Comparison of factors influencing liquidity of European Islamic and conventional banks. Oeconomia Copernicana, 12(2), 375–398. https://doi.org/10.24136/OC.2021.013 Search in Google Scholar

67 Naceur, S. (2003). The Determinants of the Tunisian Banking Industry Profitability: Panel Evidence. Universite Libre de Tunis Working Papers, 1–17. Retrieved from http://www.mafhoum.com/press6/174E11.pdf Search in Google Scholar

68 Olarewaju, O. M. & Adeyemi, O. K. (2015). Causal Relationship between Liquidity and Profitability of Nigerian Deposit Money Banks. International Journal of Academic Research in Accounting, Finance and Management Sciences, 5(2). https://doi.org/10.6007/ijarafms/v5-i2/1692 Search in Google Scholar

69 Osborne, M., Fuertes, A.-M. & Milne, A. (2012). Capital and Profitability in Banking: Evidence From US Banks. 3rd Emerging Scholars in Banking and Finance Conference, Cass Business School. Retrieved from https://www.bayes.city.ac.uk/__data/assets/pdf_file/0013/152122/Osborne_Matthew_Capital-and-earnings-in-banking-Emerging-Scholars.pdf Search in Google Scholar

70 Paul, S. C., Bhowmik, P. K. & Famanna, M. N. (2021). Impact of Liquidity on Profitability: A Study on the Commercial Banks in Bangladesh. Advances in Management and Applied Economics, 73–90. https://doi.org/10.47260/amae/1114 Search in Google Scholar

71 Petria, N., Capraru, B. & Ihnatov, I. (2015). Determinants of Banks’ Profitability: Evidence from EU 27 Banking Systems. Procedia Economics and Finance, 20, 518–524. https://doi.org/10.1016/s2212-5671(15)00104-5 Search in Google Scholar

72 Pradhan, R. S. & Shrestha, D. (2018). Impact of Liquidity on Bank Profitability in Nepalese Commercial Banks. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2793458 Search in Google Scholar

73 Rahman, H. U., Yousaf, M. W. & Tabassum, N. (2020). Bank-specific and macroeconomic determinants of profitability: A revisit of pakistani banking sector under dynamic panel data approach. International Journal of Financial Studies, 8(3), 1–19. https://doi.org/10.3390/ijfs8030042 Search in Google Scholar

74 Rahmi, Y. & Sumirat, E. (2021). A study of the impact of alma to profitability during the covid-19 pandemic. International Journal of Business Economics and Law, 24(3), 54–65. Retrieved from https://www.ijbel.com/wp-content/uploads/2021/04/IJBEL24-036.pdf Search in Google Scholar

75 Roy, S., Misra, A. K., Padhan, P. C. & Rahman, M. R. (2019). Interrelationship among Liquidity, Regulatory Capital and Profitability- A Study on Indian Banks. Cogent Economics and Finance, 7(1). https://doi.org/10.1080/23322039.2019.1664845 Search in Google Scholar

76 Sahyouni, A. & Wang, M. (2019). Liquidity creation and bank performance: evidence from MENA. ISRA International Journal of Islamic Finance, 11(1), 27–45. https://doi.org/10.1108/IJIF-01-2018-0009 Search in Google Scholar

77 Saif-Alyousfi, A. Y. H. (2022). Determinants of bank profitability: evidence from 47 Asian countries. Journal of Economic Studies, 49(1), 44–60. https://doi.org/10.1108/JES-05-2020-0215 Search in Google Scholar

78 Samo, A. H. & Murad, H. (2019). Impact of liquidity and financial leverage on firm’s profitability – an empirical analysis of the textile industry of Pakistan. Research Journal of Textile and Apparel, 23(4), 291–305. https://doi.org/10.1108/RJTA-09-2018-0055 Search in Google Scholar

79 Short, B. K. (1979). The relation between commercial bank profit rates and banking concentration in Canada, Western Europe, and Japan. Journal of Banking and Finance, 3(3), 209–219. https://doi.org/10.1016/0378-4266(79)90016-5 Search in Google Scholar

80 Sivalingam, L. & Kengatharan, L. (2018). Capital structure and financial performance: A study on commercial banks in Sri Lanka. Asian Economic and Financial Review, 8(5), 586–598. https://doi.org/10.18488/journal.aefr.2018.85.586.598 Search in Google Scholar

81 Sutrisno, S., Panuntun, B. & Adristi, F. I. (2020). The Effect of Covid-19 Pandemic on the Performance of Islamic Bank in Indonesia. Equity, 23(2), 125–136. https://doi.org/10.34209/equ.v23i2.2245 Search in Google Scholar

82 Vivas, A. L. (1997). Profit efficiency for Spanish savings banks. European Journal of Operational Research, 98(2), 381–394. https://doi.org/10.1016/S0377-2217(97)00354-8 Search in Google Scholar

83 Vu, H. & Nahm, D. (2013). The determinants of profit efficiency of banks in Vietnam. Journal of the Asia Pacific Economy, 18(4), 615–631. https://doi.org/10.1080/13547860.2013.803847 Search in Google Scholar

84 Xu, J., Haris, M. & Irfan, M. (2022). The Impact of Intellectual Capital on Bank Profitability during COVID-19: A Comparison with China and Pakistan. Complexity, 2022. https://doi.org/10.1155/2022/2112519 Search in Google Scholar

85 Yao, H., Haris, M. & Tariq, G. (2018). Profitability determinants of financial institutions: Evidence from banks in pakistan. International Journal of Financial Studies, 6(2). https://doi.org/10.3390/ijfs6020053 Search in Google Scholar

86 Yildirim, H. S. & Philippatos, G. C. (2007). Efficiency of banks: Recent evidence from the transition economies of Europe, 1993-2000. European Journal of Finance, 13(2), 123–143. https://doi.org/10.1080/13518470600763687 Search in Google Scholar