Determining Bank Profitability in U.K. Emerging Market
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Added on 2020-07-22
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1 CHAPTER 1: INTRODUCTION1 Overview of the Research 1 Background of the study1 Significance of the research 1 Research aim 2 Research objectives 2 Research Questions 2 CHAPTER: 2 LITERATURE REVIEW 3 Effectiveness of evaluating the British banking profitability 4 Analysis of primary objectives 4 Literature gap5 CHAPTER: 3 RESEARCH METHODOLOGIES 6 Research approaches 6 Analysis of data:7 Limitation of the research: 8 Ethical issues present in a research 8 CHAPTER: 4 FINDING AND DISCUS
Determining Bank Profitability in U.K. Emerging Market
Added on 2020-07-22
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Determines Bank Profitabilityin U.K. Emerging Market
Table of ContentsEXECUTIVE SUMMARY ............................................................................................................3TITLE: “Determines Bank Profitability in U.K. Emerging Market”.............................................1CHAPTER 1: INTRODUCTION....................................................................................................1Overview of the Research .....................................................................................................1Background of the study.........................................................................................................1Significance of the research....................................................................................................2Research aim..........................................................................................................................2Research objectives................................................................................................................2Research Questions................................................................................................................2CHAPTER: 2 LITERATURE REVIEW.........................................................................................3Effectiveness of evaluating determinant of profitability.......................................................4Analysis of primary objectives...............................................................................................4Literature gap..........................................................................................................................5CHAPTER: 3 RESEARCH METHODOLOGIES .........................................................................6Research approaches..............................................................................................................6Analysis of data: ....................................................................................................................7Limitation of the research: .....................................................................................................8Ethical issues present in a research .......................................................................................8CHAPTER: 4 FINDING AND DISCUSSION ..............................................................................9Results of descriptive statistics.............................................................................................11Discussion of econometric results........................................................................................11Correlation Matrix: ..............................................................................................................11Regression analysis:.............................................................................................................12CHAPTER: 5 CONCLUSION .....................................................................................................17REFERENCES..............................................................................................................................19
EXECUTIVE SUMMARY This project summary report is providing crucial information about various aspects thoseare related with determinant of profitability in banking sectors in UK. In order to determineoverall growth and performance of all those implication those are related with UK banks areanalyse under this report. Evaluation of HSBC bank financial condition and its overallprofitability can be determine by using various data which are collected in this project. Theprimary motive is take into consideration about all those specific characteristics which arehelping banks to increase their overall performance as compare to other banks. The aim of thisproject is to evaluate necessary aspects those are associated with banks in order to determinetheir future profitability. However, there are certain research methodologies is being used that can assist in properanalysis of financial position of the various banks those are operating in UK. On the basis of datacollected from various customers those are local residence of UK to know about some specificaspects that are related with banks. Further, this report is analyse by determine by evaluatingcrucial finding and on that basis certain recommendation is being made. This will assist in futuregrowth and sustainability for banks in UK.
TITLE: “Determines Bank Profitability in U.K. Emerging Market”.CHAPTER 1: INTRODUCTIONOverview of the Research The current study provide complete study to determine variable that would make impacton the profitability of UK banks. This particular research will provide proper evidence of crucialbank specific, macroeconomic and industry specific variables. The financial markets of UK arein transition because of deregulation and liberalization measures. Some aspects would have to befacilitate greater competition and improve the operations transparency. It has been seen thatservice sectors have shown a remarkable presence in business in internal market (Al-Jafari andAlchami, 2014). The banking sector has been continuously subject to effective change from so manyyears. The primary aspect to be investigated under this reports is to determine interest rate whichwould lead to maximising profitability in UK banks. In common terms, as interest rates reducedmaximum people are able to borrow maximum funds from banks. Because of this, consumershave more amount to spend that cause economy to grow and at the same time inflation willincrease (Tucker, Hall and Pattani, 2013). Background of the studyThe management of bank is more appropriately associated with evaluating profitability ofbanks is an essential aspect for analysing overall impacts and gains those are being seen over thepast few year. It has been seen direct impacts on productivity of banks which is possible todevelop competitive edge in banking sectors at the marketplace. Under this study some crucialissues would be related with HSBC banks are being discuss. It is one of the British multinationalbanking as well as financial service company. HSBC Bank plc offers various banking productsand services across worldwide (Al-Najjar, 2013). The company agreed to accept various depositssuch as current, savings and business bank accounts. It has been operated through Retail Bankingand wealth management, global banking and markets. This seems to have one of the seventhlargest bank in terms of total assets with maximum of US$2.374 trillion. It is started theiroperations from London in 1991. they are having maximum number of offices with 3900 in 67countries and other territories across other nations (Company Overview of HSBC Bank plc,2018). The profitability will be determine in banking sector have been explore and observed inthis particular segment.1
Significance of the researchThe motive behind selecting this particular research topic is to know about all thoseimpacts and growth those are being associated with HSBC and other banking services in UK.Some studies will taken into consideration only the characteristics of banks itself as todeterminants of profitability during entire research by considering macroeconomics factors. Withthe privatization of public sector banks have modified the ownership background of the banks. Research aimThe main aim of this research is to determine all those factors which are present inbanking sectors and make proper solution to increase their overall growth and profitability. As aresearcher, it would be primary role to make analysis of factors those are affecting the businessand provide valuable outcomes to the company (Alessandri and Nelson, 2015).Research objectivesThe primary purpose behind this topic is to analyse :To identify the implication which are being faced by HSBC and other banks those areoperating in London. To analyse the measure which are used by banking sectors in order to attainingprofitability.To evaluate management operations of banks so that they would attain maximum growthin near future.To understand customers perception about banks interest rates. Research QuestionsQ1: Does market structure matters on Banking sector ?Q2: Do You agree that valuable management in the banking sectors which would contribute toincrease profitability of HSBC ?Q3: How does client react in respect to operational aspects of banking sector ?2
CHAPTER: 2 LITERATURE REVIEWAccording to Bhaumik, Dang and Kutan, (2011) European banks earning will beincreasing by the average of 5-6 percentage in case Eurozone rates get increase by 10 normalpoints. Literature would provide plenty of other evidences which would determine major aspectsof banks profitability. The research has conducted on UK banks which is more profitable in thatparticular country. Although, the research is mainly focused on HSBC specific variables thoseare major determinants of banks profitability in UK. The factors being analyse entirely on banksrelated matters and to present their overall management performances. In the opinion of Chortareas, Garza-García and Girardone, (2012), it is necessary tounderstand all those crucial measure and those are making huge impacts on overall profitabilityand growth of HSBC banks. The proper knowledge about increase or decrease in interest rateswould be analyse in more specific manner. Management of capital is utmost important to anorganisation to gain profitability for maximum period of time. This will be reduce opportunitycosts connected with total investment of inventories and account receivable and valuable aspectsthose are with daily business operations of Banks.In the view point of Claessens and Van Horen, (2013), acknowledgement of thisparticular statements will indicate that maximum interest rates is more likely to be organise thatwill be profitable for the banking sectors. It will be helpful for them to get maximumopportunities in every years as interest rate gets fluctuating. With the eminence administrationleads to make superior performance in HSBC. However, it is difficult to evaluate performance ofbanks directly. For this purpose, a researchers needs to make evaluation of various types offinancial statements. By using balance sheet of HSBC present time will ensure that financialposition of a particular banks, firms or organisation can deliver important data regarding properallocation of resources. On the other hand Claessens and Yurtoglu, (2013), balance sheet items are more worthyindicators of a potential and capabilities of HSBC banks in relation to determine stability andtotal earning in the market. It would provide more crucial information about the company lastand current year financial position through analysing variety of variables that would makeinfluence on banks overall performance. Some variable would taken into consideration in theliterature review about deposits, assets, debt obligations, capital ratios, credit risk assessment andproductivity of the company. By capital adequacy ratio would make impacts on entire3
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