IDEAS home Printed from https://ideas.repec.org/a/sae/globus/v25y2024i2_supplps151-s164.html
   My bibliography  Save this article

The Impact of Credit Risk on Performance: A Case of South African Commercial Banks

Author

Listed:
  • Babatunde Lawrence
  • Mishelle Doorasamy
  • Prince Sarpong

Abstract

The objective of the study was to comparatively assess the impact of credit risk on the performance of big and small banks in South Africa. Data from audited financial reports of 14 commercial banks were obtained and divided into two panel data sets and analysed using the R-Studio software version 3.5.1 to assess the impact of capital adequacy ratio (CAR), non-performing loan to gross loan (NPLGL), loan-to-deposit ratio (LTDR), leverage ratio (LR), board gender diversity (BGD), with bank size (total asset) and AGE as control variables, on performance, (return on asset [ROA] and return on equity [ROE]). The findings of the study revealed that non-performing loan (NPL), CAR, LR, LTDR and age of banks all have significant and greater impact on performance, as measured by ROA, of small banks when compared with big banks. Surprisingly, NPL was revealed to have a lesser impact on the ROE of small banks as compared to the ROE of big banks but showed no impact on the ROA of big banks during the period of 2008–2017.

Suggested Citation

  • Babatunde Lawrence & Mishelle Doorasamy & Prince Sarpong, 2024. "The Impact of Credit Risk on Performance: A Case of South African Commercial Banks," Global Business Review, International Management Institute, vol. 25(2_suppl), pages 151-164, April.
    • Handle: RePEc:sae:globus:v:25:y:2024:i:2_suppl:p:s151-s164
    DOI: 10.1177/0972150920969927
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0972150920969927
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0972150920969927?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Owen, Ann L. & Temesvary, Judit, 2018. "The performance effects of gender diversity on bank boards," Journal of Banking & Finance, Elsevier, vol. 90(C), pages 50-63.
    2. Nina Smith & Valdemar Smith & Mette Verner, 2006. "Do women in top management affect firm performance?A panel study of 2,500 Danish firms," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 55(7), pages 569-593, 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. Atif, Muhammad & Hossain, Mohammed & Alam, Md Samsul & Goergen, Marc, 2021. "Does board gender diversity affect renewable energy consumption?," Journal of Corporate Finance, Elsevier, vol. 66(C).
    2. Kangyi Wang & Jing Ma & Chunxiao Xue & Jianing Zhang, 2024. "Board Gender Diversity and Firm Performance: Recent Evidence from Japan," JRFM, MDPI, vol. 17(1), pages 1-27, January.
    3. Simona Galletta & Sebastiano Mazzù & Valeria Naciti & Carlo Vermiglio, 2022. "Gender diversity and sustainability performance in the banking industry," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(1), pages 161-174, January.
    4. Tleubayev, Alisher & Bobojonov, Ihtiyor & Gagalyuk, Taras & Glauben, Thomas, 2020. "Board gender diversity and firm performance: Evidence from the Russian agri-food industry," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 23(1), pages 35-53.
    5. Concetta Castiglione & Davide Infante & Janna Smirnova, 2022. "Do female managers perform better? Evidence from Italian manufacturing firms," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 2194-2209, April.
    6. Ggombe Kasim Munyegera & Akampumuza Precious, 2018. "The gender gap in firm productivity in Rwanda: Evidence from establishment and household enterprise data," WIDER Working Paper Series wp-2018-100, World Institute for Development Economic Research (UNU-WIDER).
    7. Tunyi, Abongeh A. & Ntim, Collins G. & Danbolt, Jo, 2019. "Decoupling management inefficiency: Myopia, hyperopia and takeover likelihood," International Review of Financial Analysis, Elsevier, vol. 62(C), pages 1-20.
    8. Ana Beatriz Hernández-Lara & Juan Pablo Gonzales-Bustos & Amado Alarcón-Alarcón, 2021. "Social Sustainability on Corporate Boards: The Effects of Female Family Members on R&D," Sustainability, MDPI, vol. 13(4), pages 1-13, February.
    9. Liu, Jacie Jia & Daly, Kevin & Mishra, Anil V., 2022. "Board gender diversity and bank risks: Evidence from Australia," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 1040-1052.
    10. Luca Flabbi & Mario Macis & Andrea Moro & Fabiano Schivardi, 2019. "Do Female Executives Make a Difference? The Impact of Female Leadership on Gender Gaps and Firm Performance," The Economic Journal, Royal Economic Society, vol. 129(622), pages 2390-2423.
    11. Hangsheng Yang & Min Tang & Ju Huang, 2023. "Can Female Executives Enhance Organizational Resilience? Evidence from China during the COVID-19 Pandemic," Sustainability, MDPI, vol. 15(18), pages 1-17, September.
    12. Amanpreet Kaur & Balwinder Singh, 2017. "Construing Reputation from Gender Diversity on Boards," Paradigm, , vol. 21(2), pages 111-125, December.
    13. Parrotta, Pierpaolo & Smith, Nina, 2013. "Female-Led Firms: Performance and Risk Attitudes," IZA Discussion Papers 7613, Institute of Labor Economics (IZA).
    14. Gambacorta, Leonardo & Pancotto, Livia & Reghezza, Alessio & Spaggiari, Martina, 2022. "Gender diversity in bank boardrooms and green lending: Evidence from euro area credit register data," CEPR Discussion Papers 17650, C.E.P.R. Discussion Papers.
    15. Raquel Ferreras-Garcia & Jordi Sales-Zaguirre & Enric Serradell-López, 2021. "Sustainable Innovation in Higher Education: The Impact of Gender on Innovation Competences," Sustainability, MDPI, vol. 13(9), pages 1-13, April.
    16. Sari Pekkala Kerr & William R. Kerr, 2021. "Whose Job Is It Anyway? Coethnic Hiring in New US Ventures," Journal of Human Capital, University of Chicago Press, vol. 15(1), pages 86-127.
    17. Tsou, Meng-Wen & Yang, Chih-Hai, 2019. "Does gender structure affect firm productivity? Evidence from China," China Economic Review, Elsevier, vol. 55(C), pages 19-36.
    18. Berge, Lars Ivar Oppedal & Juniwaty, Kartika Sari & Sekei, Linda Helgesson, 2016. "Gender composition and group dynamics: Evidence from a laboratory experiment with microfinance clients," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 1-20.
    19. Ammar Ali Gull & Ammar Abid & Rashid Latief & Muhammad Usman, 2021. "Women on board and auditors’ assessment of the risk of material misstatement," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(4), pages 679-708, December.
    20. Adeabah, David, 2018. "CEO power and board structure of banks: a developing country’s perspective," EconStor Preprints 191529, ZBW - Leibniz Information Centre for Economics.

    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:sae:globus:v:25:y:2024:i:2_suppl:p:s151-s164. 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: SAGE Publications (email available below). General contact details of provider: http://www.imi.edu/ .

    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.