Financial Performance Measurement of a Commercial Bank: A Case of Bank of China Hongkong
Keywords:Horizontal Analysis, Financial Ratios, Liquidity, Financial Performance, Profitability, Solvency, Vertical Analysis, Financial Crisis
This study focuses on measuring the financial performance of Bank of China's profitability, solvency, and liquidity using secondary data for the period from 2008 to 2017. Various techniques such as horizontal, vertical, and ratio analysis are employed to measure financial performance. Statistical tools such as mean, standard deviation, and co-efficiency of variation measure financial data to emphasize the comparative and relative importance of presentation. The study reveals that BOC's horizontal and vertical analysis indicates a variable growth rate of percentage and amount of HK$ due to external and internal operating environmental factors. Ratio analysis reveals that the BOC was conducted in a rational and normal way except 2008, 2012, 2013, and 2015 due to the Lehman brothers' mini-bond issue, Global financial crisis, Backdrop of shrinking international trade, extreme movements in commodity prices (oil prices) and frequent swings in financial markets. Based on the findings, BOC formulates the policies to overcome the factors that would help the investors identify the banking sector's nature and assist in making their investment.
Ahsan, M. K. (2013) Measuring Financial Performance Based on CAMEL: A Study on Selected Islamic Banks in Bangladesh, Asian Business Review, 6(1), 2305-8730.
Almumani, Mohammad Abdelkarim (2014). A Study on Analyze and Comparison of Financial Performance of Saudi Banks (2007-2011), Asian Journal of Research in Banking and Finance, 4(2), 200-213.
Alsamaree, Adnan Hashim (2013) Financial Ratios and the Performance of Banks, Journal of Research in International Business and Management, 3(1), 17-19.
Altan, M., Beduk, A., & Yusufazari, H., (2014). Performance Analysis of Banks in Turkey Using Camel Approach, 14th International Academic Conference, Malta
Bashir, A.H. M., (1999). Risk and Profitability Measures in Islamic Banks: The Case of Two Sudanese Banks, Islamic Economic Studies 6, 1–24.
Beaver, W.H., (2002). Perspectives on Recent Capital Market Research, The Accounting Review, 77(2), 453-474.
Bikker, J. A. (2010). Measuring performance of banks: an assessment. Retrieved from https://www.dnb.nl/binaries/JABE%20Measuring%20performance%20of%20 banks_tcm46237545.pdf
Bucci, R. (2014). Medicine and Business, Financial Ratios, International Publishing Springer: Switzerland. CSR Report of Bank of China (PDF) 2010, Retrieved September 12, 2011
Delen, D., Kuzey, C., & Uyar, A. (2013). Measuring firm performance using financial ratios: A decision tree approach, Expert Systems with Applications, 40(10), 3970-3983.
Elliott Barry & Elliott Jamie (2017). Structure of the Statement of Financial Position, Financial Accounting, Reporting, and Analysis, Edinburgh Gate, UK, Pearson Education Ltd.
Fairfield, P. M., & Yohn, T. L., (2001). Using Asset Turnover and Profit Margin to Forecast Changes in Profitability, Review of Accounting Studies, 6(4), 371-385.
Funso, T. K. Kolasade, A.R. & Ojo, O. M. (2012). Credit Risk and Commercial Banks' Performance in Nigeria: A Panel Model Approach, Australian Journal of Business and Management Research, 2(2), 31-38.
Gitman, L. J. (2004). Principles of Managerial Finance, S. l.: Pearson Education
Goel, S. (2016). Financial Ratios, Business Expert Press, 1st Ed., New York:
Gudata, A. (2015). Financial Performance Analysis in Banking Sector: in Selected Commercial Banks in Ethiopia, International Journal of Current Research, 7(10) 21883-21886.
Jaiswal, A., & Jain, C., (2016). A Comparative Study of Financial Performance of SBI and ICICI Banks in India, International Journal of Scientific Research in Computer Science and Engineering, 4(3), 2320-7639
Jawahar Lal, (2003). Relationship of the Financial Statements, Advanced Management Accounting: Text, Problems and Cases, New Delhi, S. Chand & Publishing Company Ltd.
Metcalf, R. W., & Titard, P. L. (1976). Relationships in the Financial Statements, Principles of Accounting, W. B. Saunders, (Philadelphia) 157
Khan M.Y, & Jain P.K. (2007). Financial Management Text, Problems, and Cases, New Delhi, Tata McGraw-Hill Publishing Company Ltd.
Narayanaswamy, R. (2014). Financial Accounting: A Managerial Perspective, Delhi: PHI Learning
Rashid, M., (2010). Banking Sector Challenges in Bangladesh, The Daily Star
Rees, B. (1995). Financial Analysis", UK, Prentice-Hall International
Samad, K. (2004). Performance of Bahrain's commercial banks with respect to credit, liquidity and profitability performances during 1994-2001, Credit and Financial Management Review, 10(1), 33-40.
Singh, A. J & Schmidgall, R.S., (2002). Analysis of Financial Ratios commonly used by the US. Lodging financial executives, Retain & Leisure Property, 2(3), 201-213.
Srinivas, K., & Saroja, L. (2013). Comparative financial performance of HDFC Bank and ICICI Bank. International Refereed Multidisciplinary Journal of Contemporary Research, 1(2), 108-126.
Tulsian, M. (2014). Profitability Analysis (A comparative study of SAIL & TATA Steel), IOSR Journal of Economics and Finance, 3(2), 19-22
Whiting, E., (1986). A Guide to Business Performance Measurements.Uk, Palgrave Macmillan
Yalcin, N, Bayrakdarogly, A, Kahraman, C., (2012). Application of fuzzy multi-criteria decision-making methods for financial performance evaluation of Turkish manufacturing industries, Expert Systems with Applications, 39(1), 350- 364. https://doi.org/10.1016/j.eswa.2011.07.024
How to Cite
Copyright (c) 2020 Indian-Pacific Journal of Accounting and Finance
This work is licensed under a Creative Commons Attribution 4.0 International License.
Copyright of all articles published in the Indian Pacific Journal of Accounting and Finance (IPJAF) belongs to their respective authors. Site users are permitted to download and print the articles for personal use. Further reproduction and/or distribution is not permitted, except for brief excerpts or quotations intended for inclusion in some other original works. In this case, proper attribution must be made to the author/copyright holder, and the place of publication must be acknowledged. Altering, editing or otherwise modifying the content of information obtained from the Indian Pacific Journal of Accounting and Finance (IPJAF) is a breach of copyright.
While you retain the copyright of your original material, by publishing in the Indian Pacific Journal of Accounting and Finance (IPJAF) , you will have agreed to the following contractual terms:
- The article is the original work of the stated author(s).
- The work has not been published previously.
- If the Article contains copyright material owned by others, written permission has been obtained from the copyright owner(s) to republish such material in any print or electronic medium and that you have included appropriate acknowledgement of such rights in the Article.
- The author agrees to grant a non-exclusive license to the Indian Pacific Journal of Accounting and Finance (IPJAF) to communicate the work to the public.
- The Indian Pacific Journal of Accounting and Finance (IPJAF) may use the article for publicity purposes.
- The Indian Pacific Journal of Accounting and Finance (IPJAF) may publish the article on third-party sites.
- Any subsequent publication of the article by the authors will carry the acknowledgement: First published in the Indian Pacific Journal of Accounting and Finance (IPJAF) [http://ipjaf.omjpalpha.com]
The Indian Pacific Journal of Accounting and Finance (IPJAF) has taken all reasonable measures to ensure that material contained in this website is the original work of the author(s). However, the Journal gives no warranty and accepts no responsibility for the accuracy or the completeness of the material; no reliance should be made by any user on the material. The user should check with the authors for confirmation.
Articles published in the Indian Pacific Journal of Accounting and Finance (IPJAF) do not represent the views held by the editors and members of the editorial board. Authors are responsible for all aspects of their articles except the editorial screen design.