Relationship of Operating Segments (IFRS 8) and Profitability of Universal Banks in the Philippines

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Henry D. Rufino


The study explored the relationship between the operating segments (IFRS 8) and profitability of universal banks in the Philippines. Empirical data were collected from the published annual report or audited financial statements of the twelve universal banks from reporting period 2016 to 2019. The study utilized panel data regression analysis using univariate analysis of variance technique to measure the relationship between the reportable segments to return on asset (ROA) and earnings per share (EPS) of universal banks. The findings of the study revealed that only reportable segment revenue is significantly related to ROA. None of the reportable segment revenue, profit or loss, assets, and external revenue as result of overall test is significantly related to EPS. The results of the study showed that all operating segments, with average of four, are grouped according to the nature of products or services offered. The most disclosed segmental information are information about interest revenue & interest expense, depreciation and amortization, material non-cash items such as credit and impairment losses, income tax expense, measures of revenue, profit or loss, assets and liabilities, revenue from external customer and revenue from transactions with other operating segment of the same entity. Implications to business decisions were made.

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