Table 11 Impact of monetary policy on...

Table 11

Impact of monetary policy on ROADV and ROI across bank groups

Variable	ROADV			ROI
	Public	Private	Foreign	Public	Private	Foreign
Credit-deposit ratio (CDR)	0.001	−0.001	−0.01^***	−0.001^**	0.001	0.002^*
Credit-deposit ratio (CDR)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)
Ratio of deposits to total liabilities (RD)	0.01^***	−0.001^***	−0.01^**	−0.001	0.001	0.001
Ratio of deposits to total liabilities (RD)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)
Ratio of priority sector advances to total advances (PSR)	−0.001	0.001	−0.01^**	0.001^***	0.001^*	−0.002
Ratio of priority sector advances to total advances (PSR)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)
Capital adequacy ratio (CAR)	0.001	−0.001^*	−0.01^**	−0.001	0.001	−0.01^***
Capital adequacy ratio (CAR)	(0.00)	(0.00)	0.01	(0.00)	(0.00)	(0.00)
Ratio of non-interest income to total assets (NITA)	0.06^*	0.001	−0.02	−0.01^*	−0.01^***	−0.01
Ratio of non-interest income to total assets (NITA)	(0.04)	(0.01)	(0.07)	(0.00)	(0.00)	(0.03)
Ratio of intermediation cost to total assets (OICTA)	−0.07	0.02^***	0.13^***	0.02^***	0.02^***	0.01
Ratio of intermediation cost to total assets (OICTA)	(0.05)	(0.01)	(0.03)	(0.01)	(0.01)	(0.02)
Ratio of operating profits to total assets (OPPTA)	−0.05^*	−0.001	0.18^***	0.01	0.01^***	0.07^***
Ratio of operating profits to total assets (OPPTA)	(0.03)	(0.00)	(0.04)	(0.00)	(0.00)	(0.02)
Gross domestic product growth (GDPGR)	−0.02^***	−0.01^***	0.01^*	0.001	−0.001^***	−0.003^***
Gross domestic product growth (GDPGR)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)
Inflation (INFL)	0.04^***	0.01^***	0.03^***	−0.01^***	−0.001^***	−0.001
Inflation (INFL)	(0.01)	(0.00)	(0.01)	(0.00)	(0.00)	(0.00)
Cash reserve ratio (CRR)	−0.07^***	−0.04^***	0.00	−0.01^**	−0.01^***	−0.003^*
Cash reserve ratio (CRR)	(0.01)	(0.00)	(0.02)	(0.00)	(0.00)	(0.00)
Statutory reserve ratio (SLR)	−0.001	−0.01	−0.07^***	0.002	−0.001	−0.001
Statutory reserve ratio (SLR)	(0.01)	(0.00)	(0.03)	(0.00)	(0.00)	(0.00)
Repo rate (RR)	−0.03^***	−0.02^***	−0.04^***	−0.004^***	−0.001^**	−0.004^***
Repo rate (RR)	(0.01)	(0.00)	(0.01)	(0.00)	(0.00)	(0.00)
Bank rate (BR)	0.01	−0.002	−0.03	0.001	0.001	0.001
Bank rate (BR)	(0.01)	(0.00)	(0.02)	(0.00)	(0.00)	(0.00)
Treasury bill rate (TBR)	0.05^***	0.01^***	0.05^**	0.001^*	0.001	−0.002
Treasury bill rate (TBR)	(0.01)	(0.01)	(0.02)	(0.00)	(0.00)	(0.00)
Intercept	3.72^***	3.52^***	5.63^***	2.98^***	2.98^***	2.24^***
Intercept	(0.16)	(0.08)	(1.04)	(0.05)	(0.05)	(0.29)
R-squared	0.99	0.99	0.98	0.99	0.99	0.98
Adj R-squared	0.99	0.99	0.98	0.99	0.99	0.98
D-W stat	0.96	0.92	1.31	0.99	1.20	1.35
Fixed effects	Yes		Yes	Yes	Yes	Yes
Cross-sections	65		65	65	65	65
Observations	715		715	715	715	715

Variable	ROADV			ROI
	Public	Private	Foreign	Public	Private	Foreign
Credit-deposit ratio (CDR)	0.001	−0.001	−0.01^***	−0.001^**	0.001	0.002^*
Credit-deposit ratio (CDR)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)
Ratio of deposits to total liabilities (RD)	0.01^***	−0.001^***	−0.01^**	−0.001	0.001	0.001
Ratio of deposits to total liabilities (RD)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)
Ratio of priority sector advances to total advances (PSR)	−0.001	0.001	−0.01^**	0.001^***	0.001^*	−0.002
Ratio of priority sector advances to total advances (PSR)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)
Capital adequacy ratio (CAR)	0.001	−0.001^*	−0.01^**	−0.001	0.001	−0.01^***
Capital adequacy ratio (CAR)	(0.00)	(0.00)	0.01	(0.00)	(0.00)	(0.00)
Ratio of non-interest income to total assets (NITA)	0.06^*	0.001	−0.02	−0.01^*	−0.01^***	−0.01
Ratio of non-interest income to total assets (NITA)	(0.04)	(0.01)	(0.07)	(0.00)	(0.00)	(0.03)
Ratio of intermediation cost to total assets (OICTA)	−0.07	0.02^***	0.13^***	0.02^***	0.02^***	0.01
Ratio of intermediation cost to total assets (OICTA)	(0.05)	(0.01)	(0.03)	(0.01)	(0.01)	(0.02)
Ratio of operating profits to total assets (OPPTA)	−0.05^*	−0.001	0.18^***	0.01	0.01^***	0.07^***
Ratio of operating profits to total assets (OPPTA)	(0.03)	(0.00)	(0.04)	(0.00)	(0.00)	(0.02)
Gross domestic product growth (GDPGR)	−0.02^***	−0.01^***	0.01^*	0.001	−0.001^***	−0.003^***
Gross domestic product growth (GDPGR)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)
Inflation (INFL)	0.04^***	0.01^***	0.03^***	−0.01^***	−0.001^***	−0.001
Inflation (INFL)	(0.01)	(0.00)	(0.01)	(0.00)	(0.00)	(0.00)
Cash reserve ratio (CRR)	−0.07^***	−0.04^***	0.00	−0.01^**	−0.01^***	−0.003^*
Cash reserve ratio (CRR)	(0.01)	(0.00)	(0.02)	(0.00)	(0.00)	(0.00)
Statutory reserve ratio (SLR)	−0.001	−0.01	−0.07^***	0.002	−0.001	−0.001
Statutory reserve ratio (SLR)	(0.01)	(0.00)	(0.03)	(0.00)	(0.00)	(0.00)
Repo rate (RR)	−0.03^***	−0.02^***	−0.04^***	−0.004^***	−0.001^**	−0.004^***
Repo rate (RR)	(0.01)	(0.00)	(0.01)	(0.00)	(0.00)	(0.00)
Bank rate (BR)	0.01	−0.002	−0.03	0.001	0.001	0.001
Bank rate (BR)	(0.01)	(0.00)	(0.02)	(0.00)	(0.00)	(0.00)
Treasury bill rate (TBR)	0.05^***	0.01^***	0.05^**	0.001^*	0.001	−0.002
Treasury bill rate (TBR)	(0.01)	(0.01)	(0.02)	(0.00)	(0.00)	(0.00)
Intercept	3.72^***	3.52^***	5.63^***	2.98^***	2.98^***	2.24^***
Intercept	(0.16)	(0.08)	(1.04)	(0.05)	(0.05)	(0.29)
R-squared	0.99	0.99	0.98	0.99	0.99	0.98
Adj R-squared	0.99	0.99	0.98	0.99	0.99	0.98
D-W stat	0.96	0.92	1.31	0.99	1.20	1.35
Fixed effects	Yes		Yes	Yes	Yes	Yes
Cross-sections	65		65	65	65	65
Observations	715		715	715	715	715

Note(s): We report the results of the linear models using the ROADV and ROI of the bank groups, based on ownership structures, as the dependent variables. We present the results of the Panel Least Squares (PLS) with fixed effects (cross-section weights (PCSE) standard errors and covariance) with the coefficient values marked with significance levels in the first row, followed by the standard errors (in parenthesis) in the second row. Asterisks ^***, ^** and ^* indicate significance levels at 1, 5 and 10%, respectively

Source(s): Authors’ own calculations

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