Capital Structure Effects on Banking Performance: A Case Study of Jordan

Khalaf Taani

doi:doi:10.11648/j.ijefm.20130105.13

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Capital Structure Effects on Banking Performance: A Case Study of Jordan

Khalaf Taani

Published in International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 5)

Received: 31 July 2013 Published: 20 September 2013

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Abstract

This study examines the impact of capital structure on performance of Jordanian banks. The annual financial statements of 12 commercial banks listed on Amman Stock Exchange were used for this study which covers a period of five (5) years from 2007-2011. Multiple regressions was applied on performance indicators such as Net Profit (NP), Return on Capital Employed (ROCE), Return on Equity (ROE) and Net Interest Margin (NIM) as well as Total Debt to Total Funds (TDTF) and Total Debt to Total Equity (TDTE) as capital structure variables. Multiple regression models are applied to estimate the relationship between capital structure and banking performance. The results show that bank performance, which is measured by net profit, return on capital employed and net interest margin is to be significantly and positively associated with total debt; while total debt is found to be insignificant in determining return on equity in the banking industry of Jordan.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 5)
DOI	10.11648/j.ijefm.20130105.13
Page(s)	227-233
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2013. Published by Science Publishing Group

Keywords

Capital structure, Bank performance, Total debt, Jordan

References

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Khalaf Taani. (2013). Capital Structure Effects on Banking Performance: A Case Study of Jordan. International Journal of Economics, Finance and Management Sciences, 1(5), 227-233. https://doi.org/10.11648/j.ijefm.20130105.13

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ACS Style

Khalaf Taani. Capital Structure Effects on Banking Performance: A Case Study of Jordan. Int. J. Econ. Finance Manag. Sci. 2013, 1(5), 227-233. doi: 10.11648/j.ijefm.20130105.13

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AMA Style

Khalaf Taani. Capital Structure Effects on Banking Performance: A Case Study of Jordan. Int J Econ Finance Manag Sci. 2013;1(5):227-233. doi: 10.11648/j.ijefm.20130105.13

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@article{10.11648/j.ijefm.20130105.13,
  author = {Khalaf Taani},
  title = {Capital Structure Effects on Banking Performance: A Case Study of Jordan},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {1},
  number = {5},
  pages = {227-233},
  doi = {10.11648/j.ijefm.20130105.13},
  url = {https://doi.org/10.11648/j.ijefm.20130105.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130105.13},
  abstract = {This study examines the impact of capital structure on performance of Jordanian banks. The annual financial statements of 12 commercial banks listed on Amman Stock Exchange were used for this study which covers a period of five (5) years from 2007-2011. Multiple regressions was applied on performance indicators such as Net Profit (NP), Return on Capital Employed (ROCE), Return on Equity (ROE) and Net Interest Margin (NIM) as well as Total Debt to Total Funds (TDTF) and Total Debt to Total Equity (TDTE) as capital structure variables. Multiple regression models are applied to estimate the relationship between capital structure and banking performance. The results show that bank performance, which is measured by net profit, return on capital employed and net interest margin is to be significantly and positively associated with total debt; while total debt is found to be insignificant in determining return on equity in the banking industry of Jordan.},
 year = {2013}
}

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TY  - JOUR
T1  - Capital Structure Effects on Banking Performance: A Case Study of Jordan
AU  - Khalaf Taani
Y1  - 2013/09/20
PY  - 2013
N1  - https://doi.org/10.11648/j.ijefm.20130105.13
DO  - 10.11648/j.ijefm.20130105.13
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 227
EP  - 233
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20130105.13
AB  - This study examines the impact of capital structure on performance of Jordanian banks. The annual financial statements of 12 commercial banks listed on Amman Stock Exchange were used for this study which covers a period of five (5) years from 2007-2011. Multiple regressions was applied on performance indicators such as Net Profit (NP), Return on Capital Employed (ROCE), Return on Equity (ROE) and Net Interest Margin (NIM) as well as Total Debt to Total Funds (TDTF) and Total Debt to Total Equity (TDTE) as capital structure variables. Multiple regression models are applied to estimate the relationship between capital structure and banking performance. The results show that bank performance, which is measured by net profit, return on capital employed and net interest margin is to be significantly and positively associated with total debt; while total debt is found to be insignificant in determining return on equity in the banking industry of Jordan.
VL  - 1
IS  - 5
ER  -

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Author Information

Khalaf Taani

Department of Banking & Finance, Faculty of Finance & Administrative Sciences, Irbid National University, Irbid, Jordan

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APA Style

Khalaf Taani. (2013). Capital Structure Effects on Banking Performance: A Case Study of Jordan. International Journal of Economics, Finance and Management Sciences, 1(5), 227-233. https://doi.org/10.11648/j.ijefm.20130105.13

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ACS Style

Khalaf Taani. Capital Structure Effects on Banking Performance: A Case Study of Jordan. Int. J. Econ. Finance Manag. Sci. 2013, 1(5), 227-233. doi: 10.11648/j.ijefm.20130105.13

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AMA Style

Khalaf Taani. Capital Structure Effects on Banking Performance: A Case Study of Jordan. Int J Econ Finance Manag Sci. 2013;1(5):227-233. doi: 10.11648/j.ijefm.20130105.13

Copy | Download

@article{10.11648/j.ijefm.20130105.13,
  author = {Khalaf Taani},
  title = {Capital Structure Effects on Banking Performance: A Case Study of Jordan},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {1},
  number = {5},
  pages = {227-233},
  doi = {10.11648/j.ijefm.20130105.13},
  url = {https://doi.org/10.11648/j.ijefm.20130105.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130105.13},
  abstract = {This study examines the impact of capital structure on performance of Jordanian banks. The annual financial statements of 12 commercial banks listed on Amman Stock Exchange were used for this study which covers a period of five (5) years from 2007-2011. Multiple regressions was applied on performance indicators such as Net Profit (NP), Return on Capital Employed (ROCE), Return on Equity (ROE) and Net Interest Margin (NIM) as well as Total Debt to Total Funds (TDTF) and Total Debt to Total Equity (TDTE) as capital structure variables. Multiple regression models are applied to estimate the relationship between capital structure and banking performance. The results show that bank performance, which is measured by net profit, return on capital employed and net interest margin is to be significantly and positively associated with total debt; while total debt is found to be insignificant in determining return on equity in the banking industry of Jordan.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Capital Structure Effects on Banking Performance: A Case Study of Jordan
AU  - Khalaf Taani
Y1  - 2013/09/20
PY  - 2013
N1  - https://doi.org/10.11648/j.ijefm.20130105.13
DO  - 10.11648/j.ijefm.20130105.13
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 227
EP  - 233
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20130105.13
AB  - This study examines the impact of capital structure on performance of Jordanian banks. The annual financial statements of 12 commercial banks listed on Amman Stock Exchange were used for this study which covers a period of five (5) years from 2007-2011. Multiple regressions was applied on performance indicators such as Net Profit (NP), Return on Capital Employed (ROCE), Return on Equity (ROE) and Net Interest Margin (NIM) as well as Total Debt to Total Funds (TDTF) and Total Debt to Total Equity (TDTE) as capital structure variables. Multiple regression models are applied to estimate the relationship between capital structure and banking performance. The results show that bank performance, which is measured by net profit, return on capital employed and net interest margin is to be significantly and positively associated with total debt; while total debt is found to be insignificant in determining return on equity in the banking industry of Jordan.
VL  - 1
IS  - 5
ER  -

Copy | Download