9th Students' Research Symposium 2020

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Predictability of Stock Return Using Financial Ratios; Evidence from CSE FMCG Sector
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Sanjula, N. H. D.; Herath, H. M. N. P.
Fundamental analysis uses annual reports with macroeconomic data to predict stock returns and buy and sell under-priced and overpriced securities, respectively. The present study aims to predict the stock returns using financial ratios for the FMCG sector in Colombo Stock Exchange. The sample data was collected for the six years from 2014 to 2019 for 30 listed FMCG companies listed in Colombo Stock Exchange. The study uses four financial ratios from multiple areas i.e., profitability, liquidity, solvency and market valuation. The analysis was conducted using a multiple regression model via statistical software to understand the predictability of the stock return. The results indicate that profitability, liquidity and market valuation ratios can predict the stock return in the short term and the long term. The return on assets, current ratio and price-earnings ratio had significant predictability on stock returns, while debt to equity ratio did not show any significant results due to the reasons the companies are in the mature stage of their own product lifecycle. The final results concluded that the model is statistically significant in predicting future stock returns. The selection of the ratios under profitability, liquidity and market valuation will enhance the predicting ability of the financial ratios on stock returns.
The Impact of Intellectual Capital on Firm’s Financial Performance: Special Reference to Listed Banks, Diversified Finance and Insurance Companies in CSE
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Wijewardana, D. J. M.; Perera, L. A. S.
This research study has been carried out to determine the impact of the Intellectual capital on the firm’s financial performance in the listed banks, diversified finance and insurance companies of the Sri Lanka. This study aims to fill the gap of studying the above-mentioned sub sections listed in Colombo Stock Exchange. This study used VAICTM method to determine firms’ intellectual capital, using Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE) and Capital Employed Efficiency (CEE) as Independent Variables and Return on Equity (ROE) as Dependent variable. The research has adopted non- probability sampling method and selected 12 banks, 20 Diversified Finance Companies and 8 Insurance companies as the sample. Also, random effects regression method has initially used to analyse the collected data. Stata package version 16 was used to run the tests and the regression of the model. Based on the analysed results, Banking Sector VAICTM and ROE has a negative relationship and CEE has positive significant impact on ROE. Diversified Finance sector VAICTM has a positive relationship with ROE and HCE, SCE, CEE has a positive impact on ROE. Insurance sector VAICTM has a positive insignificant relationship. The final result emphasizes that the overall models are statistically significant, and researcher conclude that there is a significant positive impact of CEE on Financial performance of Banking Sector and there is a significant positive relationship of VAICTM components and financial performance of Diversified Finance sector.
The Impact of the Performance of Life Insurance Companies on the Growth of Sri Lankan Economy
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Rajapaksha, R. A. D. N.; Gunasekera, A. L.
Introduction - Insurance service and sector is playing a major and important role in an economy and provide significant contribution to the economy through encouraging long term investments, reinvestments of additional funds in public and private sector securities such as corporate and government bonds and debt securities Design/Methodology - The population of the research comprises of all the life insurance companies in Sri Lanka. The collected data has analysed using panel data analysis model combined of cross-sectional data and time series data. Findings - The results of the study have revealed that among three factors that was studied, Penetration rate of insurance industry influences greatly on the economic growth of Sri Lanka while Gross Written Premium and Total Assets of insurance companies are not significantly influence on economic growth. Conclusion - There are more factors effect on life insurance companies; political factors; insurance advisor’s behaviour that may differ in diverse extents. Hence, future researchers can be used more factors and identify relationship among those factors and economic growth of Sri Lanka
Impact of Commodity Prices and Macroeconomic Variables on Stock Market Performance - Evidence from Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Madhushankha, H. K. S.; Weerasinghe, W. D. J. D.
In Sri Lanka, the stock market performance is impacted by numerous variables. Out of these variables, this research study has been carried out to determine the impact of commodity prices and macroeconomic variables on stock market performance in Sri Lanka. This study incorporated two models by using stock prices generated through ASPI and S&P SL20 index as dependent variables. As the commodity variables, tea, coconut, rubber, gold, silver, aluminium and crude oil were used whilst as macroeconomic variables, real GDP, inflation rate and exchange rate were used. Aforesaid variables are used as independent variables. Vector Error Correction Model is used as the main analysis along with descriptive analysis, correlation analysis along with related tests. The results emphasize that commodity prices of tea, rubber, coconut, gold, silver, aluminium and crude oil have insignificant long run relationship with ASPI and S&P SL 20 & Tea and Rubber prices have a short run impact towards ASPI while only rubber prices impacted to S&P SL20 in short run. Macroeconomic variables of real GDP, exchange rate and inflation rate have insignificant long run relationship with ASPI and S&P SL20 and Exchange rate has a short run impact to both ASPI and S&P SL20 index. It is concluded that there is no relationship between the commodity prices and stock market performance except for tea and rubber prices. Meanwhile, real GDP, exchange rate and inflation rate have an impact on stock market performance.
The Impact of Internal Factors on Financial Performance of Life Insurance Companies in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Uduwana, G. W.; Basnayake, W. B. M. D.
Introduction- The performance of the company plays a leading role towards the growth of the industry which ultimately leads to the overall success of the economy. Therefore, Organizational performance has attracted scholarly attention in corporate finance literature over the several decades. Nevertheless, a little attention has been paid for such when it comes to the insurance sector. Thus, the present study attempts to identify the factors determining the profitability of insurance companies operating in Sri Lanka by taking return on asset as dependent variable. Design/methodology/approach -The sample for this study includes the 10 Life insurance companies in Sri Lanka and it used the data pertaining to five financial years from year 2015. For the purpose of analysing the data, descriptive analysis, correlation analysis and regression analysis were conducted with the aim of testing hypotheses formulated for this research. Therefore, internal factors such as Age of the firm, Size, Liquidity, and leverage were regressed against Return on Assets. Findings-This study led to the conclusion that profitability of insurance companies in Sri Lanka is positively and significantly influenced by liquidity and Leverage while age and Size of the firm have an insignificant effect on the performance of Life insurers in Sri Lanka. Conclusion- Finally, the research recommends life insurance companies in Sri Lanka to perform better in terms of their return on assets where, they need to improve the leverages and liquidity to a certain level based on the results of the study.
Assessing Financial Literacy Among Undergraduates of University of Kelaniya
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Samarasekara, M. A. G. I.; Abeysekera, R.
The purpose of this article is to analyse the level of financial literacy among university students at the University of Kelaniya. The study focuses on how demographic factors such as age, gender, faculty, year of study and income level affect undergraduates' financial literacy levels and whether there is a correlation between financial knowledge and demographic factors. To achieve the research objectives, the researcher collected data from 400 university students representing all faculties and years. This research used a stratified random sampling technique. Questionnaires were used as the primary sources of data collection methodology in this study. Descriptive Statistics, independent sample T-Test, ANOVA test and Probit regression were used for data analysis, and SPSS software was used as statistical software to analyse the survey data. The overall mean percentage of a correct score for the survey is 60.29%, indicating that the level of financial literacy of students at the University of Kelaniya is medium. The hypotheses test revealed that three factors, including gender, faculty, and income level, significantly affect the financial literacy level. According to the findings of the ANOVA test, there is a significant difference between financial literacy and age, gender, faculty and income level. Further, there is no significant difference between the financial literacy and the year of the respondent. This study fills the current research gap in financial literacy. The findings demonstrate the need for financial literacy education. Mainly researcher has concluded the level of financial literacy of students at the University of Kelaniya is moderate. Finally, the researcher recommends some recommendation to increase the level of financial literacy of undergraduates and recommends future researchers to overcome existing limitations and expand these studies to a variety of areas.
Electronic Banking and Banks’ Performance a Study on Sri Lankan Commercial Banks
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Madusinghe, M. N. M.; Piyananda, S. D. P.
Introduction - Numerous studies have investigated the impact of Electronic banking on the performance of banks in many countries over the world. Some studies have found the positive impact of E-banking on the bank performance while some studies have revealed the negative impact. So, the purpose of this study is fulfilling this empirical gap in the literatures. Methodology - Automatic teller machine (ATM), internet and mobile banking and Credit & Debit cards are used as key independent variable as components of Electronic banking. Return on Assets (ROA) and Cost to Income Ratio are used as key dependent variables. Furthermore, bank size is used as the control variable. Ten commercial banks listed in Colombo Stock Exchange are used as sample of the study. Secondary data collected through the financial statement and the annual reports of the banks for ten years’ period from 2010/11 to 2018/19. Ordinary least square regression model is used to analyse the data collected. Findings -The current study found statistically significant impact of Electronic banking on banks’ performance. According to that, there is a positive significance impact of ATM on Cost to income and negative significant impact on ROA and credit cards and credit cards has a negative significant impact on ROA and positive significant impact on Cost to income. Although, there is no impact of internet and mobile banking on bank performance based on ROA but there is a significant negative impact of internet and mobile banking on Cost to income. Conclusion – The research study recommends to the management of commercial banks which are slow in electronic innovation adoption, to move in and adopt various innovations in their operation in order to shore up their performance. This study recommends to policy makers to develop appropriate strategies and policies to boost the performance in the Sri Lankan Banking System by considering electronic innovations.
Factors Affecting Internet Banking on Customer Satisfaction: A Case Study Based on a Commercial Bank, Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Dankumbura, S. H.; Gunasekera, A. L.
Introduction - Internet banking is a major role in banking industry and the regulatory body. The purpose of this study is to determine the factors affecting internet banking on customer satisfaction by considering customer awareness, security and privacy, and service quality. Design/Methodology/Approach - A survey was conducted for data collection through a pre-tested questionnaire distributed a one of Commercial Bank, Head office branch, Sri Lanka. The study follows the Simple random sampling method to collect data, the researcher has distributed 300 questionnaires and 284 responses have been received. Descriptive Statistics, Cronbach's alpha, Test of homogeneity of variance and Multiple Regression were used for data analysis and SPSS has been used as statistical software to analyse the survey data. Findings – According to the research findings majority of internet banking users belongs to the age group of 18-25 years. And also findings revealed that, customer awareness, security and privacy, and service quality affect internet banking customer satisfaction positively and significantly. Conclusion - The study fulfils the existing research gap in the area of service quality and other factors which are affecting to the internet banking. This research can help internet banking providers to know internet banking users’ opinion and also find the solutions through customers’ perspective. These findings will help for future studies relating to internet banking and customer satisfaction.
The Impact of Cash Conversion Cycle on Firms’ Profitability: A Comparative Study of Food, Beverage and Tobacco Companies and Consumer Services Companies Listed in CSE
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Mihirangi, H. H. N.; Ranjani, R. P. C.
Based on the working capital management principle, the concepts of the cash conversion cycle can be identified as a powerful performance measure for assisting how well a company is managing its working capital. The study attempts to examine the Impact of Cash Conversion Cycle on Firms’ Profitability via two different industrial sectors. The impact of the firm’s cash conversion cycle on the profitability is examined using 35 Food, Beverage and Tobacco Companies and 25 Consumer Services Companies Listed in CSE for the period of 2015 to 2019. Descriptive Statistical Analysis, Correlation analysis and regression analysis are the data analytic tools used to analyse data in this study. The study revealed a significant negative impact on the Profitability of the Food, Beverage and Tobacco Companies by the length of the Cash Conversion Cycle. However, the Cash Conversion Cycle of the Consumer Services Companies has no significant impact on the profitability. The findings will help for future studies to generalization of the findings beyond the Food, Beverage & Tobacco Industry and the Consumer Services Industry by using different industries, institutes and countries with different institutional characteristics and financial systems.
The Determinants of Net Interest Margin of Licensed Commercial Banks of Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Gunasekara, D.A.C.A.; Perera, L. A. S.
Introduction – Banking sector plays an essential role in the economy provide smooth infrastructure to financial sector, while transferring the risk characteristics of assets and channelling of funds from surplus parties to deficit parties, that allows entrepreneurs to make their investment without financial difficulties. Therefore, with the higher efficiency, banks would able to maintain the Net Interest Margin (NIM) at a lower level. The banks need to maintain a balance between the profitability and the liquidity. Therefore, to achieve higher profitability banks should maintain higher interest rate margins. To maintain the balance between high and lower NIM the banks should be well aware of the main factors that affect the NIM. Purpose of this paper is to investigate the impact of Bank Specific Factors (BSF) on NIM of LCB’s in Sri Lanka over the period of 2009-2018. Design/Methodology/Approach – The sample in this study includes top 10 license commercial banks which cover the period of 2009-2018. Secondly data obtained from financial statements of individual license commercial banks, central bank annual report and other journals. Findings – This research provide results found that there is a Liquid position in the bank also positive correlation with Leverage level they are maintaining, furthermore non-interest bearing reserves showing negative relationship with management quality relating to bank. Implicit payments relating to bank also shows positive relationship with management quality. On the other hand, non-performing loans and the interest rate risk in the banking sector negative correlated with liquidity requirement in the banking sector. Furthermore, implicit payments negatively correlated with leverage. Conclusion - The results derived from this study may serve to policymakers for orienting towards issues that are more related to NIM determinants. Greater attention must be paid to capital adequacy, implicit interest payments and management quality.
International Portfolio Diversification and Implications for Investors: Empirical Study of South Asian Emerging Markets and Developed Stock Markets
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Sandeepani, M.A.U.; Herath, H. M. N. P.
International investment is proliferating among private and institutional investors due to the benefits of global portfolio diversification, if an investor could diversify more optimally by investing in different countries' stock markets, then investors do have opportunities to reduce economy specific risk. This research will add extra value to different stakeholders to utilize their wealth across the world better. This research study has been tested the linkages between stock exchanges of developed and emerging markets of Sri Lanka, India, Pakistan, Bangladesh, Nepal, France, Japan, UK and US. Monthly closing levels of the benchmark indices are taken for period February 2013 to January 2020. Data has been analysed through ARDL bound test, Vector Error Correction Model, Wald test, Granger Causality Test and Variance Decomposition Test. Breusch-Godfrey Serial Correlation LM Test, Breusch-Pagan-Godfrey Heteroscedasticity Test & Jarque-Bera Statistic have been used as the diagnostic checks in VECM. ARDL Bound test indicated a long-run relationship between variables in south Asian Emerging Markets, developed, and both South Asian Emerging & Developed countries. The researcher identified short run relationship with some countries and Variance Decomposition Analysis to identify impact on CSE from South Asian Emerging Markets and Developed Markets. Investors may have to re-think diversification benefits in the future as the study implies diminishing diversification benefits among international emerging and developed markets.
Factors Influence in Low Income Level Farmers’ perception Towards Micro- Insurance in Sri Lanka; Study Based on North-Western Province
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Wijesiri, M. G. S. S.; Buddhika, H. J. R.
Introduction – The study contributed towards the factors influence on low-income level farmers on micro-insurance in Sri Lanka. Micro Insurance is the provision of insurance to poor and low-income people. Micro Insurance covers numerous risks such as illness, accidental injuries, credits, death, natural disasters (earthquake, drought) and property loss (theft, fire). Design/Methodology - The study based on a survey model approach; data gathered on primary mode. The information collected through printed questionnaires distribution. The total numbers of farmers in the paddy sector in Galgamuwa area considered as the population, where 250 farmers selected for the sample study with the convenience sampling technique. Findings - The three variables (accessibility, knowledge and Behaviour of agent) have a positive relationship with farmers' perception toward micro insurance concept in Sri Lanka where agent’s ability does not have a positive relationship. Further, there is a positive relationship between the ability to pay and the farmers perception, but there is no significant relationship between them. Conclusion – The micro insurance concept is an essential significant contribution element in developing countries. That is most successful in several countries, but that is not a positive symptom condition in Sri Lanka. The findings can conclude as the reason for that is the poor knowledge and wrong opinions in the society. According to the presented data sample, the majority is low educated people.
Relationship Between Macro Economics Variables and Stock Market Performance: with Special Reference to Colombo Stock
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Bandara, R. M. K.; Weerasinghe, W. D. J. D.
There has been an extensive debate on the relationship between economic variables and stock market performance especially in the context of emerging markets. However, there is mix results obtained multiple times. The primary objective of this study is to examine the impact of macroeconomic variables on stock market performance with special reference to the Colombo Stock Exchange. This research is based on secondary data. Exchange rate, Balance of Trade, Money Supply, and Inflation rate are categorized into macro-economic variables as independent variables and both ASPI and S&P SL20 index return are considered as dependent variables. Descriptive Statistics, Correlation Analysis, Multiple Linear Regression are the analysis tools used for data analysis. All macroeconomic variables show a week negative correlation with both ASPI and S&P SL20 returns. During the sample period, all variables indicate low volatility relating to correlation of variation and all independent variables show insignificant relationships other than the balance of trade with ASPI. Only M2b shows the insignificant relationship with S&P SL20 whilst other independent variables were significant with S&P SL 20 based on the analysis. It is understood that most of the macro economic variables affect the changes in the stock market’s performance. At the same time, it is suggested to direction of the relationship between macroeconomic variables and stock market performance as the further research areas.
The Impact of Debt Financing on Firms’ Financial Performance: Evidence from Listed Manufacturing Companies in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Suraweera, M. H. B. N.; Ranjani, R. P. C.
Every company face a common issue whether to use equity financing, debt financing or some hybrid of these in deciding their capital structure. Because, it is a managerial decision that affect to the shareholders’ risk and return. The purpose of this study is to examine the relationship between debt financing and financial performance of listed manufacturing companies in Sri Lanka. This study uses Ordinary Least Square approach and random effect model to analyse panel data sample of 16 manufacturing companies listed under the Colombo Stock Exchange during the 2013-2019 period. This study follows the random sampling method to collect the data. Descriptive Analysis, Correlation Analysis, Multicollinearity, Normality Test, Regression Analysis and Hausman Test were used to analyse and interpret the results by using E- views as the statistical software. The results shows that there is a significant negative impact of debt financing on firms’ financial performance because, long term debt financing and short-term debt financing have significant negative impact on financial performance of manufacturing companies in Sri Lanka. Furthermore, long term debt is the highly impacted debt financing method on financial performance. There is no any significant impact of firm size and firm age on financial performance of manufacturing companies in Sri Lanka. Final results of this study concludes that the overall model is statistically significant as well as fulfils the existing research gap. Researchers conclude that there is a relationship between debt financing and financial performance of manufacturing companies in Sri Lanka.
Factors Affecting to Customer’s Adoption of Mobile Banking in Sri Lanka: Special Reference to People’s Bank
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Madushan, S. J. S; Piyananda, S. D. P.
Purpose: In the modern world, mobile banking concept is most important thing in the banking industry. But in Sri Lankan context, mobile banking usage is low. To avoid this situation bank must identify what are the factors affected to customers adapting to mobile banking and bank must address directly to these factors. This study examined the effect of perceived usefulness, perceived trust, social influence, convenience, awareness and perceived risk to customer adoption of mobile banking based on People’s Bank. Methodology: This study was conducted in customer perspective by using people’s bank customers in Colombo and Gampaha district. The study observed perceived usefulness, perceived trust, social influence, convenience, awareness and perceived risk as independent variables and mobile banking adoption as the dependent variable. This is a quantitative research study where a structured questionnaire was disseminated among more than 300 banking customers’ users under convenience sampling method and 249 respondents were responding correctly. Findings: The results of the study show that there is no significant influence from social influence and perceived risk on mobile banking adoption in the Sri Lanka. But according to the findings, perceived usefulness, perceived trust, convenience and awareness have significant impact of mobile banking adoption in Sri Lanka Conclusion: Perceived usefulness, perceived trust, convenience and awareness have significant impact of mobile banking adoption in Sri Lanka. Further, the study has revealed that there are some limitations in the study and provided suggestions to future researchers to make an effective and reliable result from the study.
Impact of Macro Economic Variables on Corporate Capital Structure: Evidence from Colombo Stock Exchange
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Kalpana, M. L. A. W.; Ranjani, R. P. C.
Capital structure decisions are very important for a firm because it helps to determine the value of a firm. This study focusing on analysing capital structure, aiming to identify how listed entities of Colombo stock exchange behave in terms of sensitivity to different types of macroeconomic factors in Sri Lanka. Probability sampling method of quota sampling technique is used in drawing 50 companies from 5 non-financial subsectors including Consumer Durable & Apparels, Consumer Services, Healthcare & Equipment, Food & Beverage and Tobacco, and Material. Cross sectional data series for the period from 2010 to 2019 and Generalized Method of Moment Estimate is used to analyse the data. Independent variables are GDP growth Rate, Government Debt, Money Supply, Exchange Rate and Price Index. Tangibility is used as a control Variable. Debt Ratio represents the capital structure which is dependent variable in this research. GDP growth Rate, Government Debt and Price index have significant positive impact on Debt Ratio and Money Supply and Exchange Rate have significant Negative Impact on Debt Ratio, GDP growth Rate, Government Debt and Price index have significant positive impact on Debt Ratio and Money Supply and Exchange Rate have significant negative impact on Debt Ratio. Outcome of this study suggest that there is a significant impact of macro-economic factors on corporate capital structure. The findings of the study will help corporate managers in making financing decisions while considering the potential impact that these macroeconomic variables can have on their financing decisions as well as economic policy makers to manage fiscal and monetary policy in line with long term objectives.
Perception of Online Banking Customers in Sri Lanka: With Special Reference to the Commercial Banks in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Appuhamy, K. H. I. S. M.; Abeysekera, R.
In the past few decades, technology has shown rapid growth, and consequently, the internet has become a significant technology component. Most individuals and businesses are paying attention to the technology and internet to make competitive advantages. Banking can be considered as a significant sector that uses this ever-advancing technology for its operations. Banks use internet banking to provide different services to their customers. As a result, internet banking has become a major channel that banks use to serve the customers via websites of the banks. The study aims to explore the factors that affect the customers' perception on internet banking in Sri Lanka and to determine the magnitudes of those factors. A well-structured questionnaire was used to collect the data which was considered as primary data. The researcher selected 212 customers with particular reference to the commercial banks in Sri Lanka using the convenience sampling method. To test the hypothetical relationships between dependent and independent variables, correlation and multiple regression were used using the SPSS software application. According to the study, results provided sufficient pieces of evidence that there is a significant positive impact on the customer perception towards internet banking by the independent variables of Accessibility, Bank Functions, and Cost Ease and of Use, while Awareness depicts a negative impact on customer perception on internet banking in Sri Lanka. Compared to the globe, in Sri Lanka, internet banking is at the primary stage performing only main banking activities such as checking account balances and transferring funds between accounts. Thus, improving the Awareness of the customers can be considered as a main target to be achieved by banks. The results of the study will be influential for banks to design their strategic marketing and promotional plans in order to expand their internet banking customer base. The study fulfils the existing research gap in the area of perception of internet banking customers in Sri Lanka. These findings will help for future studies relating to factors that affect customer perception towards internet banking in Sri Lanka
Impact of Promotion Mix and Demographic Factors on Customer Buying Behaviour on Life Insurance Policies in Galle District
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Punsara, E. D. B. S.; Gunasekera, A. L.
Introduction – This study investigates the impact of Promotion Mix and Demographic Factors On Customer Buying Behavior On Life Insurance Policies in Galle District. Design/Methodology - The study based on a quantitative approach used primary data for the simple linear regression model. Entire life insurance policy holders are considered for the population, where 100 of policy holders are used as sample for the study. Findings - The promotion mix variables such as advertising, personal selling, sales promotion, direct selling has positive impact and demographic factors such as gender, age, level of education and monthly income has not impact to the customer buying behavior. Conclusion – Based on the finding of this study promotion mix, life insurance companies in Sri Lankan Insurance industry should focus on the sales promotion, advertising, personal selling and direct selling of promotion mix. These four factors have significant relationship with customer purchase intention on life insurance services in Galle district and also demographic factors has not any relationship with customer purchase intention on life insurance services in Galle district.
The Impact of Financial Inclusion on Performance of Listed Commercial Banks in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Rasika, W. A.; Basnayake, W. B. M. D.
Introduction – Financial inclusion is recognized as a vehicle to economic growth and reduce the poverty. The disparity in financial inclusion in different countries within Asia is highly significant. Financial inclusion is the usage and accessibility of the affordable financial services and products to the deprived, low income and disadvantage sector of the population. The primary objective of this study is to investigate the impact of financial inclusion on the performance of listed commercial banks in Sri Lanka. Design/Methodology/Approach – the study used annual data of 10 commercial banks from year 2015 to year 2019. Performance of commercial banks measured by ROA and financial inclusion measured by number of ATMs, number of bank branches, loans to deposit ratio and credit cards. This study follows a quantitative analysis. With the use of STATA statistical software, the collected data will be analysed using regression analysis method. Findings – The study found there is a significant impact of financial inclusion on financial performance of listed commercial banks in Sri Lanka. When considering the impact of financial inclusion indicators individually, it shows different results on financial performance of commercial banks. Bank embranchment, use of credit cards have significantly impacted the performance of the banks while impact of number of ATMs, loans to deposit ratios on financial performance were insignificant. Conclusion - It is suggested to develop the infrastructure of financial services that allows individual and corporate bodies to take advantage of financial services, hence banks can improve their performance. Moreover, it is recommended banks to continue to embrace the use of mobile banking in their operations as the access to a mobile equipment of the people increases every day. The banks can give options for the people to get the access for the banks through the mobile and technical appliance rather than opening up a branch which would be cost worthy compared to the opening up a bank branch.
Board of Directors and Insurers Profitability: Evidence from Life Insurance Industry in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Arachchi, W. A. N. U. K. W.; Gunasekera, A. L.
Introduction – This study investigates the relationship of board of directors’ indicators and life insurers profitability in Sri Lanka for the period of 2015 to 2018. Design/ Methodology - The study is based on secondary quantitative data and descriptive statistics, correlation, regression analyse to analysed the data. All life insurance companies (13) in Sri Lanka was the population and sample compromising in 10 companies. Findings – The board of directors’ indicators such as board size, board meeting and board independence has a relationship with ROE and board size and board independence has relationship with ROA and no relationship with board meeting and ROA. Conclusions – Based on findings of this study board size, board meeting and board independence has a significant relationship with return on equity and board size, board meeting and board independence do not have a significant relationship with return on assets in life insurance companies in Sri Lanka.