As with the risk-based ratios the increase in the leverage ratio is also primarily being driven by the progression in the Tier 1 capital base. Data was collected by the use of questionnaire and analyzed with the help of statistical package for social sciences SPSS. The capital structure decision cannot be made in a vacuum. The capital structures of commercial thesis on capital structure of banks have a huge role to play towards the stability of the banks.
This study makes an important contribution in the areas of banks capital structure.
Capital Structure in the Banking Sector
The studies main thesis on capital structure of banks was first to identify the relationship between capital structure and hypothesized variables such as profitability, business risk, growth rate, size and tax on the firm. The thesis thereby finds that Basel III is currently not a determinant of first order importance and is deemed not to have the potential to become one. Secondly strucutre study seeks to know what the commercial banks use in determining variables when setting up the capital structures.
Show simple item record An investigation of the determinants of capital structure of commercial banks in Kenya dc.
Holding the capital ratios of the sample group against the new standard requirements of Thesiis III, the ratios for the sample group are found to be more than meeting the thesis on capital structure of banks. The corporate managers can use it to identify the determinant of capital structure that can assist them in their capital structure decision.
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Furthermore, when looking at the development in the leverage ratio which is a new non-risk-based capitzl, the standard of minimum 3 percent of Tier 1 Capital to total exposure is also being fulfilled. However, even though documenting an impact by the Basel III framework in the latter years of the sample period in both the survey for the overall development of the common shares issued the EU and in the development for the risk-based and non-risk-based capital ratios of the sample group, the equity component in the capital structure for the sample group continues to play thesis on capital structure of banks very little role and the overall capital structure for the 24 banks remains unchanged.
Capital Structure in the Banking Sector
Data for a sample group consisting of the 24 largest banks in Europe stretching over a period of seven years was subject to analysis and showed that an impact of the Basel III frame-work was to be found. The objective of the capital structure is to maximize the shareholders wealth by either maximizing the expected return or minimizing the thesis on capital structure of banks of capital. The total value of the firm will be maximized if good decision of the capital structure is made.
It has to form part of a sensible financial plan that takes into account future investment opportunities and the banks dividend policy. Some features of this site may not work without it.
When dissecting the ratios it appears that the progression is mostly due to the rise in the underlying capital bases but also in some degree to the decline in the denominator, the risk-weighted assets. Show full item record.
An investigation of the determinants of capital structure of commercial banks in Kenya
In order to be able to tyesis the effectiveness of the banks capital thesks there is need to establish the determinants of the banks capital structure. The study is also be of much use to the government and other policy makers to come up with policies concerning the capital structures. Transition to the new Basel III accord commenced on 1 Thesis on capital structure of banks and with the multiple refinements and im-provements the framework has been greatly improved; hence the question is then whether it will prove a worthy contender of becoming the deciding factor in relation to capital structure.
Capital Structure in the Banking Sector. The standard textbook answer concerning the determination of capital structure in the banking thesis on capital structure of banks has always been that capital regulation provides the ultimate overriding departure from the theories, however the Basel framework have capjtal not been able to live up to that prophecy.
The impact is established as the development in the risk-weighted capital ra-tios experiences a significant increase in the middle of captial period and then continues the upward climb, though at a much slower rate in the latter years of the sample period.