Publication Details
Abstract
General Background: The capital structure of commercial banks plays a crucial role in ensuring financial stability, risk management, and sustainable economic growth. Adequate capital levels are essential for banks to absorb potential losses and maintain confidence in the financial system. Specific Background: Regulatory authorities impose capital adequacy requirements to mitigate financial risks and enhance banking sector resilience. However, optimizing capital efficiency while ensuring compliance remains a key challenge for commercial banks. The relationship between capital elements and income-generating assets requires in-depth analysis to improve profitability and financial performance. Knowledge Gap: While numerous studies examine capital adequacy regulations, there is a lack of econometric analysis focusing on the efficiency of capital allocation and its impact on income-generating assets in commercial banks. Addressing this gap can provide insights into optimizing capital utilization. Aims: This study aims to analyze the elements of commercial bank capital, assess regulatory requirements for capital adequacy through econometric methods, and evaluate the impact of capital structure on the efficiency of income-generating assets.Results: The findings highlight disparities in capital adequacy across banks, identifying areas where regulatory compliance and profitability optimization can be balanced. Efficient capital allocation enhances income-generating asset performance, contributing to overall financial stability. Novelty: The study presents an econometric approach to evaluating capital adequacy and asset efficiency, offering data-driven insights into optimizing capital structures in commercial banks. Implications: The research provides practical recommendations for policymakers and banking institutions to enhance capital efficiency, strengthen regulatory compliance, and improve the profitability of income-generating assets, ultimately supporting financial sector stability and growth.