05 12月 新西兰论文代写-GDP对经济市场的影响
The use of GDP and CPI as factors impacting the profitability metrics of the banks has been done in several studies. Kanwal & Nadeem (2013) find mixed results in their study of Pakistani banks. They find that GDP has insignificant effect on ROA and ROE but CPI has a negative link with both of them. Adekola (2016) finds that for Nigerian banks GDP has a direct positive link with the profitability of the banks.The GDP of the economy implies the overall health of the economy and is often considered as a sign of growth.
Markets in the economies with higher GDP tend to behave differently than the markets with lower GDP. Therefore, GDP is a variable which captures the health of the economy. When the GDP is high, the market sentiments tend to be high as well and the people of the economy tend to have more faith in the economy. With more faith comes the demand of investment, investment leads to a higher demand of credit which in turn leads to development of the assets of the bank. These are the assets which generate the profit and income of the bank. Thus, for the profitability of the bank, GDP plays an important role albeit indirectly. However, with an increase in GDP, the inflow of credit from alternative sources also increases. An attractive market or an attractive economy attracts new players in the economy. This leads to increased competition in the market which affects the profitability of the banks. Due to higher competition, the limited number of customers gets split up between the newer and older avenues. Thus, increase in GDP can affect the profitability of the banks in multiple ways.
Similarly, the deposits are an indication of the policies of the economy. Higher deposits imply higher security. Thus, when the policies are stringent, the customers have more faith in the banking system. There are lesser chances that a bank would have to file for bankruptcy. Essentially, the customers have faith in the banking system that if they deposit their money in the bank, they won’t lose it. As a result, the banks get more deposits which they can turn easily into assets. However, increased deposit also means that banks have to keep idle money either as reserves or with the central bank. These do not earn interests so they are essentially idle money and affect the profitability of the bank as well.