Impact of CSR on Financial Performance: Canadian Banks Analysis

This report presents a regression analysis examining the relationship between Corporate Social Responsibility (CSR) and financial performance metrics, specifically Return on Equity (ROE) and Return on Assets (ROA), across eight major Canadian banks. The study formulates a hypothesis to assess ...Read More

DATA ANALYSIS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Hypothesis:..................................................................................................................................1
Royal bank of Canada..................................................................................................................1
National Bank of Canada.............................................................................................................3
Bank of Montreal.........................................................................................................................6
Canadian Imperial Bank of Commerce.......................................................................................9
Bank of Nova Scotia..................................................................................................................12
Canadian Western Bank............................................................................................................14
Laurentian Bank of Canada.......................................................................................................17
Toronto- dominion Bank...........................................................................................................20
CONCLUSION..............................................................................................................................23
REFERENCES..............................................................................................................................24

INTRODUCTION
In this chapter of research project will be consist of various measurement which will be used
to analyse the relationship between variables. Thus, the impacts of CSR (Human rights) on the
financial performance of Canadian Banks have been examined through regression analysis.
Thus, this statistical analysis is being accurate to examine the relationship between two variables.
There has been collection financial information of 8 Canadian Banks such as Return on Equity,
Return on assets and their CSR rating.
Hypothesis:
There has been creation of hypothesis which will be used to analyse the data base and
making effective study over the facts such as:
Hypothesis 1
Null Hypothesis: There is no mean significant relationship between return on equity,
return on assets and CSR rating
Alternative Hypothesis: There is a mean significant relationship between return on
equity, return on assets and CSR rating (Yoo and et.al., 2018)
Royal bank of Canada
Descriptive Statistics
Mean Std. Deviation N
Royal bank of Canada CSR 48.5438 5.36493 8
Royal bank of Canada ROE 17.4712 2.13591 8
Royal bank of Canada ROA .9050 .11747 8
Correlations
Royal bank of
Canada CSR
Royal bank of
Canada ROE
Royal bank of
Canada ROA
Pearson Correlation
Royal bank of Canada CSR 1.000 .197 .590
Royal bank of Canada ROE .197 1.000 .906
Royal bank of Canada ROA .590 .906 1.000
Sig. (1-tailed)
Royal bank of Canada CSR . .320 .062
Royal bank of Canada ROE .320 . .001
Royal bank of Canada ROA .062 .001 .
N Royal bank of Canada CSR 8 8 8
1

Royal bank of Canada ROE 8 8 8
Royal bank of Canada ROA 8 8 8
Model Summaryb
Model R R
Square
Adjusted R
Square
Std. Error of
the Estimate
Change Statistics
R Square
Change
F
Change
df1 df2 Sig. F
Change
1 .994a .989 .984 .67590 .989 218.011 2 5 .000
a. Predictors: (Constant), Royal bank of Canada ROA, Royal bank of Canada ROE
b. Dependent Variable: Royal bank of Canada CSR
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 199.193 2 99.596 218.011 .000b
Residual 2.284 5 .457
Total 201.477 7
a. Dependent Variable: Royal bank of Canada CSR
b. Predictors: (Constant), Royal bank of Canada ROA, Royal bank of Canada ROE
Coefficientsa
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig. 95.0% Confidence
Interval for B
B Std. Error Beta Lower
Bound
Upper
Bound
1
(Constant) 36.307 2.111 17.202 .000 30.881 41.732
Royal bank of
Canada ROE -4.753 .283 -1.892 -16.801 .000 -5.480 -4.025
Royal bank of
Canada ROA 105.270 5.143 2.305 20.468 .000 92.049 118.491
a. Dependent Variable: Royal bank of Canada CSR
Charts
2

Interpretation: On the basis of analysing the impacts of ROA and ROE on the CSR rating
on Royal bank of Canada where regression analysis has been conducted by the researcher. Thus,
the outcomes reflected R value as 0.994 which states the data is 99.4% relevant to each other.
Similarly, in relation with analysing the significant value of the data set which determines
outcomes lower than p value of 0.05, therefore, there will be acceptance to the alternative
hypothesis such as, there is a mean significant relationship between return on equity, return on
assets and CSR rating
National Bank of Canada
3

Regression
Descriptive Statistics
Mean Std. Deviation N
National bank of canada CSR 10.6375 3.55529 8
National bank of canada ROE 18.2725 3.71943 8
National bank of canada ROA .7725 .11222 8
Correlations
National bank of
canada CSR
National bank of
canada ROE
National bank of
canada ROA
Pearson Correlation
National bank of canada CSR 1.000 .996 .940
National bank of canada ROE .996 1.000 .916
National bank of canada ROA .940 .916 1.000
Sig. (1-tailed)
National bank of canada CSR . .000 .000
National bank of canada ROE .000 . .001
National bank of canada ROA .000 .001 .
N
National bank of canada CSR 8 8 8
National bank of canada ROE 8 8 8
National bank of canada ROA 8 8 8
Model Summaryb
Model R R
Square
Adjusted R
Square
Std. Error of
the Estimate
Change Statistics
R Square
Change
F
Change
df1 df2 Sig. F
Change
1 .999a .997 .996 .21462 .997 957.949 2 5 .000
a. Predictors: (Constant), National bank of canada ROA, National bank of canada ROE
b. Dependent Variable: National bank of canada CSR
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 88.250 2 44.125 957.949 .000b
Residual .230 5 .046
4

Total 88.481 7
a. Dependent Variable: National bank of canada CSR
b. Predictors: (Constant), National bank of canada ROA, National bank of canada ROE
Coefficientsa
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig. 95.0% Confidence
Interval for B
B Std. Error Beta Lower
Bound
Upper
Bound
1
(Constant) -8.179 .630 -12.978 .000 -9.799 -6.559
National bank of
canada ROE .807 .054 .844 14.822 .000 .667 .946
National bank of
canada ROA 5.281 1.804 .167 2.928 .033 .644 9.917
a. Dependent Variable: National bank of canada CSR
Charts
5

Interpretation: P value is lower than 0.05 therefore, there is a mean significant
relationship between return on equity, return on assets and CSR rating
Bank of Montreal
Regression
Descriptive Statistics
Mean Std. Deviation N
Bank of Montreal CSR 7.1450 .86365 8
Bank of Montreal ROE 13.7125 1.32357 8
Bank of Montreal ROA .7488 .03682 8
6

Correlations
Bank of Montreal
CSR
Bank of Montreal
ROE
Bank of Montreal
ROA
Pearson Correlation
Bank of Montreal CSR 1.000 .886 .953
Bank of Montreal ROE .886 1.000 .873
Bank of Montreal ROA .953 .873 1.000
Sig. (1-tailed)
Bank of Montreal CSR . .002 .000
Bank of Montreal ROE .002 . .002
Bank of Montreal ROA .000 .002 .
N
Bank of Montreal CSR 8 8 8
Bank of Montreal ROE 8 8 8
Bank of Montreal ROA 8 8 8
Model Summaryb
Model R R
Square
Adjusted R
Square
Std. Error of
the Estimate
Change Statistics
R Square
Change
F
Change
df1 df2 Sig. F
Change
1 .959a .920 .889 .28823 .920 28.923 2 5 .002
a. Predictors: (Constant), Bank of Montreal ROA, Bank of Montreal ROE
b. Dependent Variable: Bank of Montreal CSR
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 4.806 2 2.403 28.923 .002b
Residual .415 5 .083
Total 5.221 7
a. Dependent Variable: Bank of Montreal CSR
b. Predictors: (Constant), Bank of Montreal ROA, Bank of Montreal ROE
Coefficientsa
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig. 95.0% Confidence Interval
for B
7

B Std. Error Beta Lower
Bound
Upper
Bound
1
(Constant) -8.168 2.768 -2.950 .032 -15.284 -1.052
Bank of Montreal
ROE .146 .169 .224 .863 .427 -.289 .580
Bank of Montreal
ROA 17.779 6.077 .758 2.925 .033 2.157 33.400
a. Dependent Variable: Bank of Montreal CSR
Charts
Interpretation: On the basis of above analysed regression where Significant value is less
than p level of 0.05. thus, 0.002 reflects acceptance top the alternative hypothesis which states,
8

there is a mean significant relationship between return on equity, return on assets and CSR
rating.
Canadian Imperial Bank of Commerce
Regression
Descriptive Statistics
Mean Std. Deviation N
Canadian Imperial bank of
commerce CSR 51.1813 3.00451 8
Canadian Imperial bank of
commerce ROE 19.3663 1.71601 8
Canadian Imperial bank of
commerce ROA .8388 .04155 8
Correlations
Canadian
Imperial bank of
commerce CSR
Canadian
Imperial bank of
commerce ROE
Canadian
Imperial bank of
commerce ROA
Pearson Correlation
Canadian Imperial bank of
commerce CSR 1.000 -.810 .625
Canadian Imperial bank of
commerce ROE -.810 1.000 -.181
Canadian Imperial bank of
commerce ROA .625 -.181 1.000
Sig. (1-tailed)
Canadian Imperial bank of
commerce CSR . .007 .049
Canadian Imperial bank of
commerce ROE .007 . .334
Canadian Imperial bank of
commerce ROA .049 .334 .
N Canadian Imperial bank of
commerce CSR
8 8 8
9

Canadian Imperial bank of
commerce ROE 8 8 8
Canadian Imperial bank of
commerce ROA 8 8 8
Model Summaryb
Model R R
Square
Adjusted R
Square
Std. Error of
the Estimate
Change Statistics
R Square
Change
F
Change
df1 df2 Sig. F
Change
1 .945a .893 .851 1.16137 .893 20.925 2 5 .004
a. Predictors: (Constant), Canadian Imperial bank of commerce ROA, Canadian Imperial bank of commerce ROE
b. Dependent Variable: Canadian Imperial bank of commerce CSR
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 56.446 2 28.223 20.925 .004b
Residual 6.744 5 1.349
Total 63.190 7
a. Dependent Variable: Canadian Imperial bank of commerce CSR
b. Predictors: (Constant), Canadian Imperial bank of commerce ROA, Canadian Imperial bank of
commerce ROE
Coefficientsa
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig. 95.0% Confidence
Interval for B
B Std. Error Beta Lower
Bound
Upper
Bound
1 (Constant) 45.624 11.096 4.112 .009 17.101 74.148
Canadian Imperial
bank of commerce
ROE
-1.262 .260 -.721 -4.852 .005 -1.931 -.593
10

Canadian Imperial
bank of commerce
ROA
35.765 10.741 .495 3.330 .021 8.155 63.375
a. Dependent Variable: Canadian Imperial bank of commerce CSR
Charts
Interpretation: In analysing the outcomes based on above listed regression measurement
which states that the P value as 0.004 as lower than 0.05. thus, there will be acceptance to
alternative hypothesis. It states that, there is a mean significant relationship between return on
equity, return on assets and CSR rating.
11

Bank of Nova Scotia
Regression
Descriptive Statistics
Mean Std. Deviation N
Bank of Nova Scotia CSR 39.4163 8.74857 8
Bank of Nova Scotia ROE 15.9813 2.06331 8
Bank of Nova Scotia ROA .8763 .05012 8
Correlations
Bank of Nova
Scotia CSR
Bank of Nova
Scotia ROE
Bank of Nova
Scotia ROA
Pearson Correlation
Bank of Nova Scotia CSR 1.000 -.753 -.512
Bank of Nova Scotia ROE -.753 1.000 .836
Bank of Nova Scotia ROA -.512 .836 1.000
Sig. (1-tailed)
Bank of Nova Scotia CSR . .016 .097
Bank of Nova Scotia ROE .016 . .005
Bank of Nova Scotia ROA .097 .005 .
N
Bank of Nova Scotia CSR 8 8 8
Bank of Nova Scotia ROE 8 8 8
Bank of Nova Scotia ROA 8 8 8
Model Summaryb
Model R R
Square
Adjusted R
Square
Std. Error of
the Estimate
Change Statistics
R Square
Change
F
Change
df1 df2 Sig. F
Change
1 .782a .612 .457 6.44889 .612 3.941 2 5 .094
a. Predictors: (Constant), Bank of Nova Scotia ROA, Bank of Nova Scotia ROE
b. Dependent Variable: Bank of Nova Scotia CSR
12

ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 327.822 2 163.911 3.941 .094b
Residual 207.941 5 41.588
Total 535.763 7
a. Dependent Variable: Bank of Nova Scotia CSR
b. Predictors: (Constant), Bank of Nova Scotia ROA, Bank of Nova Scotia ROE
Coefficientsa
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig. 95.0% Confidence
Interval for B
B Std. Error Beta Lower
Bound
Upper
Bound
1
(Constant) 53.035 52.419 1.012 .358 -81.713 187.782
Bank of Nova Scotia
ROE -4.566 2.150 -1.077 -2.123 .087 -10.094 .962
Bank of Nova Scotia
ROA 67.737 88.519 .388 .765 .479 -159.808 295.282
a. Dependent Variable: Bank of Nova Scotia CSR
Charts
13

Interpretation: P value is more than 0.05 which is 0.94. Thus, it states evidences against
alternative hypothesis and acceptance to the null hypothesis. Thus, it can be said that, there is no
mean significant relationship between return on equity, return on assets and CSR rating.
Canadian Western Bank
Regression
Descriptive Statistics
Mean Std. Deviation N
Canadian Western Bank CSR 20.6275 1.76810 8
Canadian Western Bank ROE 13.6288 3.33034 8
Canadian Western Bank ROA 1.0500 .22978 8
14

Correlations
Canadian
Western Bank
CSR
Canadian
Western Bank
ROE
Canadian
Western Bank
ROA
Pearson Correlation
Canadian Western Bank CSR 1.000 -.253 -.158
Canadian Western Bank ROE -.253 1.000 .991
Canadian Western Bank ROA -.158 .991 1.000
Sig. (1-tailed)
Canadian Western Bank CSR . .273 .354
Canadian Western Bank ROE .273 . .000
Canadian Western Bank ROA .354 .000 .
N
Canadian Western Bank CSR 8 8 8
Canadian Western Bank ROE 8 8 8
Canadian Western Bank ROA 8 8 8
Variables Entered/Removeda
Model Variables Entered Variables
Removed
Method
1
Canadian
Western Bank
ROA, Canadian
Western Bank
ROEb
. Enter
a. Dependent Variable: Canadian Western Bank CSR
b. All requested variables entered.
Model Summaryb
Model R R
Square
Adjusted R
Square
Std. Error of
the Estimate
Change Statistics
R Square
Change
F
Change
df1 df2 Sig. F
Change
1 .741a .548 .368 1.40576 .548 3.037 2 5 .137
a. Predictors: (Constant), Canadian Western Bank ROA, Canadian Western Bank ROE
b. Dependent Variable: Canadian Western Bank CSR
15

ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 12.003 2 6.001 3.037 .137b
Residual 9.881 5 1.976
Total 21.883 7
a. Dependent Variable: Canadian Western Bank CSR
b. Predictors: (Constant), Canadian Western Bank ROA, Canadian Western Bank ROE
Coefficientsa
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig. 95.0% Confidence
Interval for B
B Std. Error Beta Lower
Bound
Upper
Bound
1
(Constant) 17.707 3.031 5.843 .002 9.917 25.498
Canadian Western
Bank ROE -2.888 1.200 -5.440 -2.407 .061 -5.972 .196
Canadian Western
Bank ROA 40.268 17.387 5.233 2.316 .068 -4.427 84.963
a. Dependent Variable: Canadian Western Bank CSR
Charts
16

Interpretation: P value is 0.137 which is more than the P value of 0.05. hence states,
acceptance to null hypothesis such as, there is no mean significant relationship between return on
equity, return on assets and CSR rating
Laurentian Bank of Canada
Regression
Descriptive Statistics
Mean Std. Deviation N
Laurentian Bank of Canada
CSR 5.1800 1.60950 8
17

Laurentian Bank of Canada
ROE 9.7063 1.36785 8
Laurentian Bank of Canada
ROA .4163 .08245 8
Correlations
Laurentian Bank
of Canada CSR
Laurentian Bank
of Canada ROE
Laurentian Bank
of Canada ROA
Pearson Correlation
Laurentian Bank of Canada
CSR 1.000 .968 .847
Laurentian Bank of Canada
ROE .968 1.000 .849
Laurentian Bank of Canada
ROA .847 .849 1.000
Sig. (1-tailed)
Laurentian Bank of Canada
CSR . .000 .004
Laurentian Bank of Canada
ROE .000 . .004
Laurentian Bank of Canada
ROA .004 .004 .
N
Laurentian Bank of Canada
CSR 8 8 8
Laurentian Bank of Canada
ROE 8 8 8
Laurentian Bank of Canada
ROA 8 8 8
Model Summaryb
Model R R
Square
Adjusted R
Square
Std. Error of
the Estimate
Change Statistics
R Square
Change
F
Change
df1 df2 Sig. F
Change
1 .969a .939 .914 .47208 .939 38.183 2 5 .001
a. Predictors: (Constant), Laurentian Bank of Canada ROA, Laurentian Bank of Canada ROE
b. Dependent Variable: Laurentian Bank of Canada CSR
18

ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 17.019 2 8.510 38.183 .001b
Residual 1.114 5 .223
Total 18.133 7
a. Dependent Variable: Laurentian Bank of Canada CSR
b. Predictors: (Constant), Laurentian Bank of Canada ROA, Laurentian Bank of Canada ROE
Coefficientsa
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig. 95.0% Confidence
Interval for B
B Std. Error Beta Lower
Bound
Upper
Bound
1
(Constant) -5.732 1.319 -4.345 .007 -9.124 -2.341
Laurentian Bank of
Canada ROE 1.050 .247 .893 4.249 .008 .415 1.686
Laurentian Bank of
Canada ROA 1.725 4.101 .088 .421 .691 -8.816 12.266
a. Dependent Variable: Laurentian Bank of Canada CSR
Charts
19

Interpretation: P value is 0.001 which is less than 0.05 therefore, states acceptance to
alternative hypothesis. Thus, there is a mean significant relationship between return on equity,
return on assets and CSR rating
Toronto- dominion Bank
Regression
Descriptive Statistics
Mean Std. Deviation N
Toronto- Dominion Bank CSR 8.0425 .67926 8
Toronto- Dominion Bank ROE 14.2875 .80413 8
20

Toronto- Dominion Bank ROA .8112 .04486 8
Correlations
Toronto-
Dominion Bank
CSR
Toronto-
Dominion Bank
ROE
Toronto-
Dominion Bank
ROA
Pearson Correlation
Toronto- Dominion Bank CSR 1.000 .829 .888
Toronto- Dominion Bank ROE .829 1.000 .644
Toronto- Dominion Bank ROA .888 .644 1.000
Sig. (1-tailed)
Toronto- Dominion Bank CSR . .005 .002
Toronto- Dominion Bank ROE .005 . .042
Toronto- Dominion Bank ROA .002 .042 .
N
Toronto- Dominion Bank CSR 8 8 8
Toronto- Dominion Bank ROE 8 8 8
Toronto- Dominion Bank ROA 8 8 8
Model Summaryb
Model R R
Square
Adjusted R
Square
Std. Error of
the Estimate
Change Statistics
R Square
Change
F
Change
df1 df2 Sig. F
Change
1 .949a .901 .862 .25236 .901 22.857 2 5 .003
a. Predictors: (Constant), Toronto- Dominion Bank ROA, Toronto- Dominion Bank ROE
b. Dependent Variable: Toronto- Dominion Bank CSR
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 2.911 2 1.456 22.857 .003b
Residual .318 5 .064
Total 3.230 7
a. Dependent Variable: Toronto- Dominion Bank CSR
b. Predictors: (Constant), Toronto- Dominion Bank ROA, Toronto- Dominion Bank ROE
21

Coefficientsa
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig. 95.0% Confidence
Interval for B
B Std. Error Beta Lower
Bound
Upper
Bound
1
(Constant) -4.692 1.888 -2.485 .056 -9.546 .162
Toronto- Dominion
Bank ROE .372 .155 .440 2.396 .062 -.027 .770
Toronto- Dominion
Bank ROA 9.154 2.779 .605 3.294 .022 2.010 16.299
a. Dependent Variable: Toronto- Dominion Bank CSR
Charts
22

Interpretation: Significant value is 0.03 which is less than 0.05 states acceptance to
alternative hypothesis. Moreover, there is a mean significant relationship between return on
equity, return on assets and CSR rating
CONCLUSION
On the basis of above anlsyed outcomes through regression test on various measurement.
There were majority of Banks’s data base have reflected acceptance to the alternative hypothesis.
It states, there is a mean significant relationship between return on equity, return on assets and
CSR rating. Henceforth, it can be said that the changes incurred in ROA and ROE of a bank
makes changes in its CSR rating.
23

REFERENCES
Books and Journals
Yoo, K. and et.al., 2018. Connectome-based predictive modeling of attention: Comparing
different functional connectivity features and prediction methods across
datasets. NeuroImage. 167. pp.11-22.
Online
Royal bank of Canada. 2019. [Online]. Available through :<
https://www.csrhub.com/CSR_and_sustainability_information/Royal-Bank-of-Canada>.
24