The impact of bank capital on performance
| Model-1 | Model-2 | Model-3 | Model-4 | Model-5 | Model-6 | |
|---|---|---|---|---|---|---|
| Variables | CAR and LNZSCORE | CAR and NPLTL | CAR and LLPNIR | ETAR and LNZSCORE | ETAR and NPLTL | ETAR and LLPNIR |
| ROABt−1 | 0.51*** (6.37) | 0.403*** (5.34) | 0.463*** (5.89) | 0.495*** (9.17) | 0.419*** (7.15) | 0.458** (7.30) |
| CAR | 0.002** (2.50) | 0.002** (2.21) | 0.002** (2.4) | |||
| ETAR | 0.159*** (3.98) | 0.110*** (3.16) | 0.113*** (3.37) | |||
| LNZSCORE | 0.002* (1.76) | 0.002** (2.20) | ||||
| NPLTL | −0.047*** (−5.21) | −0.039*** (−4.82) | ||||
| LLPNIR | −0.005** (−2.53) | −0.005*** (−3.54) | ||||
| LIQD | 0.020*** (4.99) | 0.015*** (3.84) | 0.023*** (5.94) | 0.028*** (4.83) | 0.021*** (3.58) | 0.027*** (4.50) |
| OETA | 0.265*** (3.62) | 0.214*** (2.91) | 0.179** (2.11) | 0.219*** (4.52) | 0.181*** (3.52) | 0.133** (2.12) |
| LP | 0.012*** (8.51) | 0.011*** (10.72) | 0.011*** (10.55) | 0.013*** (11.94) | 0.012*** (14.67) | 0.012*** (13.63) |
| OFBSTA | −0.011*** (−7.03) | −0.010*** (−7.75) | −0.010*** (−6.53) | −0.008*** (−8.16) | −0.008*** (−10.51) | −0.008*** (−6.23) |
| INCD | 0.014*** (4.39) | 0.022*** (5.30) | 0.021*** (5.74) | 0.023*** (5.40) | 0.027*** (7.96) | 0.028*** (7.85) |
| CONC3 | 0.086*** (6.37) | 0.082*** (9.25) | 0.079*** (6.40) | 0.057*** (5.50) | 0.059*** (6.51) | 0.055*** (5.14) |
| GGR | 0.0001 (0.11) | 0.0002 (0.43) | 0.000007 (0.01) | 0.0003 (1.12) | 0.0001 (0.47) | 0.0002 (0.54) |
| Intercept | −0.020** (−1.97) | −0.0121* (−1.38) | −0.019** (−1.97) | −0.035*** (−8.00) | −0.021*** (−4.36) | −0.027*** (−4.70) |
| Adjusted R2 | 0.43 | 0.57 | 0.55 | 0.60 | 0.65 | 0.64 |
| Sargan test (P-Value) | 0.22 | 0.20 | 0.30 | 0.24 | 0.19 | 0.20 |
| Bank-year observations | 413 | 413 | 413 | 413 | 413 | 413 |
| Number of banks | 30 | 30 | 30 | 30 | 30 | 30 |
| Model-1 | Model-2 | Model-3 | Model-4 | Model-5 | Model-6 | |
|---|---|---|---|---|---|---|
| Variables | CAR and LNZSCORE | CAR and NPLTL | CAR and LLPNIR | ETAR and LNZSCORE | ETAR and NPLTL | ETAR and LLPNIR |
| ROAB | 0.51 | 0.403 | 0.463 | 0.495 | 0.419 | 0.458 |
| CAR | 0.002 | 0.002 | 0.002 | |||
| ETAR | 0.159 | 0.110 | 0.113 | |||
| LNZSCORE | 0.002 | 0.002 | ||||
| NPLTL | −0.047 | −0.039 | ||||
| LLPNIR | −0.005 | −0.005 | ||||
| LIQD | 0.020 | 0.015 | 0.023 | 0.028 | 0.021 | 0.027 |
| OETA | 0.265 | 0.214 | 0.179 | 0.219 | 0.181 | 0.133 |
| LP | 0.012 | 0.011 | 0.011 | 0.013 | 0.012 | 0.012 |
| OFBSTA | −0.011 | −0.010 | −0.010 | −0.008 | −0.008 | −0.008 |
| INCD | 0.014 | 0.022 | 0.021 | 0.023 | 0.027 | 0.028 |
| CONC3 | 0.086 | 0.082 | 0.079 | 0.057 | 0.059 | 0.055 |
| GGR | 0.0001 (0.11) | 0.0002 (0.43) | 0.000007 (0.01) | 0.0003 (1.12) | 0.0001 (0.47) | 0.0002 (0.54) |
| Intercept | −0.020 | −0.0121 | −0.019 | −0.035 | −0.021 | −0.027 |
| Adjusted | 0.43 | 0.57 | 0.55 | 0.60 | 0.65 | 0.64 |
| Sargan test ( | 0.22 | 0.20 | 0.30 | 0.24 | 0.19 | 0.20 |
| Bank-year observations | 413 | 413 | 413 | 413 | 413 | 413 |
| Number of banks | 30 | 30 | 30 | 30 | 30 | 30 |
Notes:
***Significance at 1 per cent level;
**Significance at 5 per cent level;
*Significance at 10 per cent level. Numbers in parentheses are t-statistics;
Author calculations using GMM system in Eviews
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