Open AccessLogit Regression Approach to Rating Banks Using Financial Ratios: A Study of Gulf Cooperation Council Banks
Author(s) -
Y. Sree Rama Murthy
Publication year - 2013
Publication title -
international journal of financial research
Language(s) - English
Resource type - Journals
eISSN - 1923-4031
pISSN - 1923-4023
DOI - 10.5430/ijfr.v4n4p107
Subject(s) - quartile , logistic regression , logit , financial crisis , business , ordered logit , financial ratio , economics , financial system , econometrics , statistics , mathematics , confidence interval , macroeconomics
Using seven ratios representing seven facets of bank financial management practices this paper rates and ranks the 68 commercial banks operating in Gulf Cooperation Council countries. Banks falling in the top quartile are rated higher than those in the next quartile. Logit regression technique is used to identify financial management practices of those banks which managed to remain in the top quartile both before and after the 2008 financial crisis