Abstract

LAPO-MAZA, María del Carmen; TELLO-SANCHEZ, Michelle Gioconda  and  MOSQUERA-CAMACAS, Sandra Carolina. Profitability, Capital and Credit Risk in ecuadorians banks. Investig. adm. [online]. 2021, vol.50, n.127, 12702.  Epub Mar 02, 2021. ISSN 2448-7678.  https://doi.org/10.35426/iav50n127.02.

Aim: To determine the influence of the capital structure and credit risk on the profitability of Ecuadorian private banks through path modeling. Method: 504 observations from seven Ecuadorian banks between 2012-2017 were analyzed. A PLS-SEM path model was estimated. Results: The capital structure in Ecuadorian banks was significantly influenced by credit risk, and has no significant impact on profitability. Credit risk had a significant negative effect on profitability. Limitations: The macroeconomic and institutional environment or potential effects derived from the size or other characteristics of the bank were not incorporated. Conclusions: The findings encourage bank leaders to improve risk management practices and to make capital structure decisions that increase their profitability. Originality: PLS-SEM has begun to being used in finance and banking, this study shows its applicability and the advantages of its use.

Keywords : Private banks; capital structure; PLS path model; bank profitability; credit risk.

        · abstract in Spanish     · text in Spanish     · Spanish ( pdf )