Loan loss provisions, earnings management, capital management, and signalling: the case of Vietnamese banks
Tu D.Q. Le; Liem T. Nguyen; Son H. Tran
Afro-Asian J. of Finance and Accounting, Vol. 11, No. 5 (2021) pp. 755 - 771
This study examines loan loss provision (LLP) behaviours of Vietnamese banks between 2006 and 2015. The findings show that earnings management is positively related to LLP regardless of the restructuring period, suggesting that LLPs can be used by Vietnamese banks as a mechanism for aggressive earnings management. There appears to be no capital management before the restructuring period. However, the findings indicate that Vietnamese banks use capital management with LLP during the restructuring period. Furthermore, the positive relation between LLP and future earnings during the restructuring period suggests that investors may view an abnormal increase in LLP as a signal of loan quality. The findings further demonstrate that LLP is positively associated with bank inefficiency, credit growth, bank size, and lending specialisation. State-owned commercial banks are found to reserve a greater level of provisions compared to privately owned commercial banks. Based on the research findings, we offer several implications for relevant stakeholders.
Author: Tu D.Q. Le
Indian government bonds sensitivity to macroeconomic and non-macroeconomic factors: a quantile regression approach
Indian government bonds sensitivity to macroeconomic and non-macroeconomic factors: a quantile regression approach
Muhammadriyaj Faniband
Afro-Asian J. of Finance and Accounting, Vol. 11, No. 5 (2021) pp. 772 - 786
This paper introduces a new dataset of Clearing Corporation of India Limited's broad total return index (BTRI) and liquid total return index (LTRI). The paper examines the impact of macroeconomic and non-macroeconomic factors on BTRI and LTRI during monthly periods from January 2010 to December 2018 using quantile regression methodology. This paper finds that the GDP has positive and significant impact on BTRI and LTRI for the upper quantiles. Further, CPI shows positive impact on both BTRI and LTRI. Moreover, both the indices are influenced by IR and there is an inverse relationship between them. ER also significantly affects both the indices. The EPUI has negative and significant impact on BTRI and LTRI for the intermediate and upper quantiles. No clear relationship is found between BTRI and Nifty, whereas Nifty has significant impact on LTRI. BTRI is not affected by VIX but LTRI is affected for the intermediate quantiles.