The objective of the study:

The study's main objective is to determine the effects of seven bank-specific variables of Kuwaiti
Bank's on the Kuwaiti Bank's capital adequacy ratio. Another objective of the study is to
determine the other influencing factors that affect the capital adequacy ratio.

Methodology of the Study:

The capital adequacy ratio is the dependent variable of the study of five conventional Kuwaiti
Bank's. These independent variables are bank-specific variables consisting of seven variables
such as loans to assets, loans to deposits, nonperforming loan, ROA, ROE, dividend payout and
total liabilities to assets. Now, the model has liked the following form:

CARit = β0 + β 1LARit + β 2LDRit + β 3NPLLRit + β 4ROAit + β 5ROEit + β DIVIDENDit +

β 7SIZEit + eit

Result of the Study:

The study is based on secondary data. The data is accumulated from the 5 conventional Kuwaiti
Banks'. The study is consisting period nine year from 2005 to 2013. The study period has been
made for current and accurate data in the analysis. The descriptive, correlational and causal-
comparative research design was made for data analysis. The two different models have been
used for data analysis: Fixed Effects Model and Random Effects Model. The study results
showed that under the fixed effect model, the five bank-specific variables, DIVIDEND, LAR,
LDR, NPPLLR and ROE, have no statistically significant effects on the capital adequacy ratio of
five conventional Kuwaiti Banks. On the other hand, SIZE has a negative and statistically
significant effect on five conventional Kuwaiti Banks. Also ROA has statistically significant
results but is negatively related to the capital adequacy ratio. The study results showed that under
the random effect model SIZE adversely effect on the capital adequacy ratio. On the other hand,
LDR has a positive and statistically significant effect on five conventional Kuwaiti Banks. Also,
ROA has statistically significant results but are negatively related to the capital adequacy ratio.
Finanlly, we can conclude that the study suggests doing more research to determine the
influencing variables on the capital adequacy ratio of five conventional Kuwaiti Banks.