Credit risk management and shareholder value creation: with special reference to listed commercial banks in Sri Lanka
By: L. A. S. Perera and P. S. Morawakage
Open Access
|Feb 2017Abstract
The main aim of this study is to investigate the effect of credit risk management on the shareholder value in listed commercial banks in Sri Lanka. The research has used only the secondary data for the purpose of analysis and the sources of data include the annual reports of selected quoted public banks. This study employed return on shares to measure the shareholder value while non-performing ratio, Capital adequacy ratio and Loans to deposits ratio have been used as the indicators of the credit risk management of the banks. Regression models were employed to do the empirical analysis and focuses on the descriptions of the output obtained from the SPSS. The findings reveal that credit risk management has a significant effect on shareholder value in all eight banks. Among the three credit risk management indicators, NPLR has the most significant effect on the return on shares. Through the results of the study it can be concluded that null hypothesis can be rejected since there is a significant relationship between credit risk management and shareholder value.
DOI: https://doi.org/10.4038/kjm.v5i2.7514 | Journal eISSN: 2448-9298
Language: English
Page range: 1 - 16
Published on: Feb 9, 2017
Published by: Faculty of Commerce and Management Studies University of Kelaniya
In partnership with: Paradigm Publishing Services
Keywords:
© 2017 L. A. S. Perera, P. S. Morawakage, published by Faculty of Commerce and Management Studies University of Kelaniya
This work is licensed under the Creative Commons License.