Professional Documents
Culture Documents
Marylet H. Ilagan
Master in Business Administration
Lyceum of the Philippines University-Batangas
of credit risk management on the profitability of Nigerian banks using the default
rate, cost per loan asset and capital adequacy ratio for the period of ten years to
evaluate the relationship between the two variables.
It is deemed important to undertake the research on the effectiveness of
Credit Risk Management (CRM) on the financial performance in this critical time
when most of the banks from Asia Pacific region recorded to have slower pace of
growth over the years. The subject of the analysis is to determine the variation in
performance brought about by changing CRM approaches among the banks and
how such practices affected the financial health of the sector as a whole. It also
attempts to unfold the use of some risk management, evaluation and assessment
tools, models, and techniques.
Objectives of the research
The study will determine the Effectiveness of Credit Risk Management on
the Financial Performance of Philippine Universal Banks.
More specifically, it will present profile of the various Philippine universal
banks, number of years of operation, capital adequacy, asset quality,
management soundness, banks earning, liquidity, bank size, and different risk
management in banking. It will also identify the benefits of credit risk
management strategy and characteristics of credit risk management of Philippine
universal banks through a quantitative research design survey method. It will also
investigate the challenges on the effectiveness of credit risk management on the
financial performance of these universal banks. Moreover, it will identify the
Dependent Variable
Liquidity refers to a situation where institutions can obtain sufficient funds, either
by increasing liabilities or by converting its assets quickly to cash at a reasonable
cost; and (6) Bank Size is measured in term of value of total assets. (Abdelrahim,
2013).
Respondents of the Study
Due to some limitations on the published lists of bank managers and credit
officers and due to limited time and resources, the researcher will select a
purposive sample of 50 respondents to have their points of views on the
challenges and developing methods of credit risk management of Philippine
universal banks. The purposive samplings will include bank managers and
credit/lending officers of the top five largest banks in the country based from the
records of Bangko Sentral ng Pilipinas. These are BDO Unibank, Bank of the
Philippine Islands, Metropolitan Bank, Landbank of the Philippines and Philippine
National Bank. Other universal banks are excluded because of the lack of time
and resources and they are left for other researchers future study.
Data Gathering Instrument
The questionnaire is adopted from the research survey conducted by the
students of Heriot Watt University and from the study of Abdelrahim (2013). It will
be used to collect the primary data on the awareness of credit risk management
and on the challenges and developing methods on the effectiveness of credit risk
management practiced by the bank managers and credit officers of Philippine
Universal banks.