Fachrudin & Fachrudin conducted a cross-sectional study on 45 real estates and property companies which had securities in Indonesia Stock Exchange with the aim of analyzing the property portfolio and sustainability of property and real estate companies. The study was quantitative and used secondary data from asset enhancement, flats, land lots, shopping centers, deport, shop, houses apartments property return and investment properties. In this study, investment properties were consider as properties and infrastructures that companies owned to earn rentals or capital appreciation or both. Findings showed that property portfolio and sustainability are not statistically significant(r=0.597; p-value=0.000). This implied that there is no association between property portfolio and return on asset. In short, risk do not predict the expected return in property investment with alpha 5%. The regression analysis showed that the model to analyze sustainability property was acceptable and suitable (p-value of 0.004; Exp (B) of 2.958). The model to analyze property portfolio was also acceptable and suitable (p-value of 0.002; Exp (B) of 3.339). It implied that 15 companies create sustainability while 30 companies didn’t in Indonesia. Sustainable property companies are those which were environmentally friendly, saving energy, and reducing running cost including green buildings. In short, the company size predict at 73.3% its sustainability concept. The corporate performance was predicted by the inventory of property and investment properties which generate revenue. Findings showed that the highest return was from the asset enhancement and the lowest expected return was from hospitality services and infrastructure.

Talebi [5] made a theoretical analysis on how managers should adopt the useful managerial tool using an empirical analysis with PROMETHEE technique of qualitative analysis of the information collected from 17 customers of Persian Bank. They were selected using the purposing sampling technique based on their expertise in corporate banking. A semi-structured interview were conducted in 2007 to verify the level of agreement on the proposed model for customers’ business attractiveness, strategic importance of customers, the complexity and difficulty of managing each customer. His objective was to create the model for classifying relationship between corporate banks and their customers in an optimized way with considerations of network approach. He reviewed the literature on the relationship portfolio models, Network Theory and Business Banking Relationship. Talebi [5] concluded that Iranian banking industry was experiencing a more competitive market after the entrance of private banks to the market.

Parlińska & Panchenko [6] conducted the study on the role of portfolio risk management in investment activities in Deutsche Bank. The study was aiming at founding out which method to be used to recognize risk and avoid systematic risk and receive adequate returns. Findings showed that Deutsche Bank investment portfolio was diversified and protected from unsystematic risk. Deutsche Bank profitability of investment portfolio return was superior to the required rare of portfolio return (0.098 > 0.052). Deutsche Bank invested in securities which were directly to risk for a desired income such as government securities, bonds and dividend payment as it was planned in its investment policy. Based on the Financial Theory which holds that the best possible diversification occurs when all conceivable assets are merged into a single portfolio [1]. Findings from only Deutsche Bank cannot predict the role of portfolio risk management in investment activities in banking sector in Germany. Deutsche Bank used short-term investment portfolio securities to increase bank liquidity without considering profitability as a priority target on one hand. Deutsche Bank used to combine short-term acceptance with diversification or use the method “bar” which tries to maintain an appropriate maturity structure of securities to protect itself from risks based on the current economic situation on the other hand [6].

The best methods to be used to recognize systematic risk and avoid it to receive adequate return were not well clarified. Fakir [7] did an evaluation report of the Loan Portfolio Commercial Bank Ceylon Plc in Bangladesh and showed that it is a foreign bank that was oriented in giving loans to SMEs, garments, textile, and spinning, steeling and engineering, paper and paper products, food processing and stuff, wholesale and retail trading. The Commercial Bank of Ceylon contributed in the economic activities by expanding loans and advances. The loan portfolio substantially increased from 3.14% in 2013 to 31.45% in 2017. This theme covered different sectors such as industry, commercial credit, agriculture, import loan, stuff and miscellaneous. A big part was from agriculture sector (86.04%) and in a region called Dhaka in 2017. The only challenge to Commercial Bank of Ceylon Plc credit portfolio was that the nonperforming loan (2.21%) was higher in 2015.

The study conducted in Kenya by Charles [8], aiming at establishing the portfolio management strategies at Centum Investments and determining and determining the effects of portfolio management strategies on financial performance of Centum Investments showed that there is a significance between individual security selection and yield curve strategies(r=0.349; p-value=0.001) on one hand. There is also a significance between yield curve strategies and yield spread strategies (r=0.783; p-value=0.001) on the other hand. The regression analysis indicated that the a unit changes in Leverage strategies results in 29.4% increase in financial performance as measured by the Return on Equity (ROE). A unit changes in Yield Spread Strategies results in 23% increase in financial performance as measured by the Return on Equity (ROE). A unit changes in Interest Rates expectation strategies results in 13% increase in financial performance as measured by the Return on Equity (ROE). A unit changes in individual security selection strategies results in 42.1% increase in financial performance as measured by the ROE. A unit changes in yield curve strategies results in 32.5% increase in financial performance as measured by the ROE [8].

The study was conducted by Amayo [9] on 139 respondents from 215 Assets and Liability Committee (ALCO) members, portfolio manager, strategy teams, credit teams, finance teams, risk management teams, and credit committee members who were improved from 2016 so that they can give the real information on portfolio optimization. The fact that scholars and practitioners were concerned with the problem of poor performance of commercial banks in Kenya on one hand. There was no study that was conducted on the portfolio optimization and its effects on performance of banks in Kenya on the other hand. The reason why this study was need to be done. The study used mixed research design were both the questionnaire and the interview guide were used as instruments for Tata gathering. The data analysis used both IBM SPSS 23.0 version for quantitative data analysis and ATLAS.ti for qualitative data analysis [9]. The findings from the quantitative analysis showed that portfolio diversification(r=0.554, p-value=0.010), asset allocation (r=0.743, p-value=0.009) and portfolio risk management (r=0.674, p-value=0.010) significantly correlate with the financial performance of Commercial Banks in Kenya.

Findings showed that the portfolio diversification had the least influence in the performance of commercial banks in Kenya (β=0.192; p-value=0.000). This meant that a unit increase in portfolio diversification index led to an increase in performance of commercial banks’ index in Kenya by 19.2%. The asset allocation use had the greatest influence in the performance of commercial banks in Kenya (β=0.253; p-value=0.000). In other words, a unit increase in asset allocation index use led to an increase in performance of commercial banks’ index in Kenya by 25.3%. There is a positive significant relationship between portfolio risk management and performance of commercial banks in Kenya (β=0.251; p-value=0.000). Therefore, a unit increase in use of portfolio risk management index led to an increase in performance of commercial banks’ index by 25.1%. The qualitative analysis showed that commercial banks’ high performance is composed with the market share, increased return, improved competitiveness, new market and enhanced resource utilization. The portfolio risk management use involved internal control, risk monitoring, risk motivation and risk measurement. The use of portfolio diversification involved the cannel diversification, allocation diversification and investment diversification. The use of asset allocation involved strategic asset allocation and tactical asset allocation by dividing investment into different asset classes such as stocks, bonds, and money market securities. The gap analysis showed that the study luck the generalizability of findings from data collected form the Head Offices of Commercial banks in Nairobi to all branches located in all corners of Kenya [9].

Bandorayingwe [10] conducted a study on 130 employees of cog bank and found that loan portfolio management activities have a high positive collimation with the financial performance of Cog bank(r=0.921, p-value=0.000). The analysis of variance showed that there is a significant relationship between loan portfolio management and the financial performance of cog bank (F=11.084, p-value=0.029). The regression analysis showed that a unit increase in loan portfolio management index led to an increase in net profit index by 2.4%. The research gap analysis indicate that the study of Bandorayingwe [10] have not analyzed well the regression analysis. The reliability analysis was not well done because Bandorayingwe [10] has not described where the pilot study took place and the reliability analysis was not well done and interpreted. Here there is no proof that the questionnaire was able to measure what it is supposed to measure. Bandorayingwe [10] did not specify how the sample size was calculated and how 130 employees were selected among 299 employees of Cog bank.

Rop, Kibet, & Bokongo [11] conducted an explanatory study on 40 commercial banks in Kenya aiming at investigating the effect of portfolio diversification on the financial performance of commercial banks in Kenya. The empirical study dealt with analyzing critically other related studies conducted on the effect of insurance investment, government securities, real estate, buying shares and financial performance. Rop, Kibet, & Bokongo [11] were motivated by the fact that other scholars and practitioners were concerned with the problem of poor performance of banks in Kenya. Findings showed that there was a significant relationship between insurance investment (β=0.389; p-value=0.002), government securities (β=0.161; p-value=0.001), real estate investment (β=0.116; p-value=0.037), buying shares (β=0.374; p-value=0.000) and the financial performance of Commercial banks in Kenya.