Banks optimally invest to earn profit as they consider the associated risks with such portfolio management. Portfolio management is a medium by which the banks hold investment due from other banks, purchase Government securities and invest in subsidiaries. This paper investigates the effect of banks’ portfolio management on profitability. Five commercial banks that are listed on the Ghana Stock Exchange were randomly selected for the study. Data on the total market value of Government securities, investment in subsidiaries and due from other banks were collected from the Bank of Ghana and the Ghana Stock Exchange between 2008 and 2017. As panel study, we regress portfolio management on profitability. The findings show that holding of government securities and investing in subsidiaries have a significant positive effect on the profitability of banks in Ghana. The findings also show that non-performing loans have a significant negative effect on the profitability of the banks. Therefore, it is recommended that banks should develop a balance between holding government securities and investing in subsidiaries to improve upon its profitability. The banks should also double their efforts to reduce their non-performing loans by enhancing the skills of its officers, strengthening its due diligence procedures and intensify monitoring activities.
| Published in | Journal of Business and Economic Development (Volume 5, Issue 4) |
| DOI | 10.11648/j.jbed.20200504.17 |
| Page(s) | 244-248 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2020. Published by Science Publishing Group |
Portfolio Management, Performance, Investment, Banks, Profitability
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APA Style
Andrews Doeh Agblobi, Oscar Tornam Yaw Kuhorfah, Prisca Asamoah. (2020). Portfolio Management and Profitability of Commercial Banks. Journal of Business and Economic Development, 5(4), 244-248. https://doi.org/10.11648/j.jbed.20200504.17
ACS Style
Andrews Doeh Agblobi; Oscar Tornam Yaw Kuhorfah; Prisca Asamoah. Portfolio Management and Profitability of Commercial Banks. J. Bus. Econ. Dev. 2020, 5(4), 244-248. doi: 10.11648/j.jbed.20200504.17
AMA Style
Andrews Doeh Agblobi, Oscar Tornam Yaw Kuhorfah, Prisca Asamoah. Portfolio Management and Profitability of Commercial Banks. J Bus Econ Dev. 2020;5(4):244-248. doi: 10.11648/j.jbed.20200504.17
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Download@article{10.11648/j.jbed.20200504.17,
author = {Andrews Doeh Agblobi and Oscar Tornam Yaw Kuhorfah and Prisca Asamoah},
title = {Portfolio Management and Profitability of Commercial Banks},
journal = {Journal of Business and Economic Development},
volume = {5},
number = {4},
pages = {244-248},
doi = {10.11648/j.jbed.20200504.17},
url = {https://doi.org/10.11648/j.jbed.20200504.17},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20200504.17},
abstract = {Banks optimally invest to earn profit as they consider the associated risks with such portfolio management. Portfolio management is a medium by which the banks hold investment due from other banks, purchase Government securities and invest in subsidiaries. This paper investigates the effect of banks’ portfolio management on profitability. Five commercial banks that are listed on the Ghana Stock Exchange were randomly selected for the study. Data on the total market value of Government securities, investment in subsidiaries and due from other banks were collected from the Bank of Ghana and the Ghana Stock Exchange between 2008 and 2017. As panel study, we regress portfolio management on profitability. The findings show that holding of government securities and investing in subsidiaries have a significant positive effect on the profitability of banks in Ghana. The findings also show that non-performing loans have a significant negative effect on the profitability of the banks. Therefore, it is recommended that banks should develop a balance between holding government securities and investing in subsidiaries to improve upon its profitability. The banks should also double their efforts to reduce their non-performing loans by enhancing the skills of its officers, strengthening its due diligence procedures and intensify monitoring activities.},
year = {2020}
}
TY - JOUR T1 - Portfolio Management and Profitability of Commercial Banks AU - Andrews Doeh Agblobi AU - Oscar Tornam Yaw Kuhorfah AU - Prisca Asamoah Y1 - 2020/11/30 PY - 2020 N1 - https://doi.org/10.11648/j.jbed.20200504.17 DO - 10.11648/j.jbed.20200504.17 T2 - Journal of Business and Economic Development JF - Journal of Business and Economic Development JO - Journal of Business and Economic Development SP - 244 EP - 248 PB - Science Publishing Group SN - 2637-3874 UR - https://doi.org/10.11648/j.jbed.20200504.17 AB - Banks optimally invest to earn profit as they consider the associated risks with such portfolio management. Portfolio management is a medium by which the banks hold investment due from other banks, purchase Government securities and invest in subsidiaries. This paper investigates the effect of banks’ portfolio management on profitability. Five commercial banks that are listed on the Ghana Stock Exchange were randomly selected for the study. Data on the total market value of Government securities, investment in subsidiaries and due from other banks were collected from the Bank of Ghana and the Ghana Stock Exchange between 2008 and 2017. As panel study, we regress portfolio management on profitability. The findings show that holding of government securities and investing in subsidiaries have a significant positive effect on the profitability of banks in Ghana. The findings also show that non-performing loans have a significant negative effect on the profitability of the banks. Therefore, it is recommended that banks should develop a balance between holding government securities and investing in subsidiaries to improve upon its profitability. The banks should also double their efforts to reduce their non-performing loans by enhancing the skills of its officers, strengthening its due diligence procedures and intensify monitoring activities. VL - 5 IS - 4 ER -
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