| |
Determinants of bank profits and its persistence in Indian Banks: a study in a dynamic panel data framework
- 作者:Pankaj Sinha ; Sakshi Sharma
- 关键词:Profitability determinants ; Credit risk ; Operational efficiency ; Persistence ; Market power ; C4 ; G21 ; G28 ; G320
- 刊名:International Journal of Systems Assurance Engineering and Management
- 出版年:2016
- 出版时间:March 2016
- 年:2016
- 卷:7
- 期:1
- 页码:35-46
- 全文大小:538 KB
- 参考文献:Afanasieff TS, Lhacer PM, Nakane MI (2002) The determinants of bank interest spread in Brazil. Money Affairs 15(2):183–207
Akhavein JD, Berger AN, Humphrey DB (1997) The effects of megamergers on efficiency and prices: evidence from a bank profit function. Rev Ind Organ 12(1):95–139CrossRef Allen L (1988) The determinants of bank interest margins: a note. J Financ Quant Anal 23(02):231–235CrossRef Altunbas Y, Liu MH, Molyneux P, Seth R (2000) Efficiency and risk in Japanese banking. J Bank Finance 24(10):1605–1628CrossRef Angbazo L (1997) Commercial bank net interest margins, default risk, interest-rate risk, and off-balance sheet banking. J Bank Finance 21(1):55–87CrossRef Arellano M, Bond S (1991) Some tests of specification for panel data: monte Carlo evidence and an application to employment equations. Rev Econ Stud 58(2):277–297CrossRef MATH Athanasoglou PP, Brissimis SN, Delis MD (2008) Bank-specific, industry-specific and macroeconomic determinants of bank profitability. J Int Financ Mark Inst Money 18(2):121–136CrossRef Baltagi B (2008) Econometric analysis of panel data, vol 1. Wiley, New York Bapat D (2013) Growth, profitability and productivity in public sector banks: an assessment of their interrelationship. IUP J Bank Manag 12(3):49–57 Bashir AHM (2003) Determinants of profitability in Islamic banks: some evidence from the Middle East. Islamic Econ Stud 11(1):31–57MathSciNet Berger AN (1995) The profit-structure relationship in banking—tests of market-power and efficient-structure hypotheses. J Money Credit Bank 7(2):404–431CrossRef Berger AN, Hanweck GA, Humphrey DB (1987) Competitive viability in banking: scale, scope, and product mix economies. J Monet Econ 20(3):501–520CrossRef Berger AN, Bonime SD, Covitz DM, Hancock D (2000) Why are bank profits so persistent? The roles of product market competition, informational opacity, and regional/macroeconomic shocks. J Bank Finance 24(7):1203–1235CrossRef Bhavani TA, Bhanumurthy NR (2012) Financial access in post-reform India. Oxford University Press, OxfordCrossRef Bodla BS, Verma R (2006) Determinants of profitability of banks in India: a multivariate analysis. J Serv Res 6(2):75–89 Bourke P (1989) Concentration and other determinants of bank profitability in Europe, North America and Australia. J Bank Finance 13(1):65–79CrossRef Boyd JH, Graham SL, Hewitt RS (1993) Bank holding company mergers with nonbank financial firms: effects on the risk of failure. J Bank Finance 17(1):43–63CrossRef Chortareas GE, Garza-Garcia JG, Girardone C (2011) Banking sector performance in Latin America: market power versus efficiency. Rev Dev Econ 15(2):307–325CrossRef Claeys S, Vander Vennet R (2008) Determinants of bank interest margins in Central and Eastern Europe: a comparison with the West. Econ Syst 32(2):197–216CrossRef Coffinet J, Pop A, Tiesset M (2013) Monitoring financial distress in a high-stress financial world: the role of option prices as bank risk metrics. J Financ Serv Res 44(3):229–257CrossRef Cooper MJ, Jackson WE, Patterson GA (2003) Evidence of predictability in the cross-section of bank stock returns. J Bank Finance 27(5):817–850CrossRef Curak M, Poposki K, Pepur S (2012) Profitability determinants of the Macedonian banking sector in changing environment. Procedia-Soc Behav Sci 44(1):406–416CrossRef Demirgüç-Kunt A, Huizinga H (1999) Determinants of commercial bank interest margins and profitability: some international evidence. World Bank Econ Rev 13(2):379–408CrossRef Evanoff DD, Fortier DL (1988) Re-evaluation of the structure-conduct-performance paradigm in banking. J Financ Serv Res 1(3):277–294CrossRef Financial Stability Report: June 2013, Reserve Bank of India; Issue 7, 1–92 Flannery MJ (1981) Market interest rates and commercial bank profitability: an empirical investigation. J Finance 36(5):1085–1101CrossRef García-Herrero A, Gavilá S, Santabárbara D (2009) What explains the low profitability of Chinese banks? J Bank Finance 33(11):2080–2092CrossRef Gilbert RA (1984) Bank market structure and competition: a survey. J Money Credit Bank 16(4):617–645CrossRef Girardone C, Molyneux P, Gardener EP (2004) Analysing the determinants of bank efficiency: the case of Italian banks. Appl Econ 36(3):215–227CrossRef Goddard J, Molyneux P, Wilson JO (2004) Dynamics of growth and profitability in banking. J Money Credit Bank 36(6):1069–1090CrossRef Golin J (2001) The bank credit analysis handbook: a guide for analysts, bankers and investors. Wiley, New York Guru BK, Staunton J, Balashanmugam B (2002) Determinants of commercial bank profitability in Malaysia. J Money Credit Bank 17:69–82 Ho TS, Saunders A (1981) The determinants of bank interest margins: theory and empirical evidence. J Financ Quant Anal 16(04):581–600CrossRef Mamatzakis EC, Remoundos PC (2003) Determinants of Greek commercial banks profitability, 1989–2000. Spoudai 53(1):84–94 Miller SM, Noulas AG (1997) Portfolio mix and large-bank profitability in the USA. Appl Econ 29(4):505–512CrossRef Molyneux P, Thornton J (1992) Determinants of European bank profitability: a note. J Bank Finance 16(6):1173–1178CrossRef Naceur SB, Goaied M (2001) The determinants of the Tunisian deposit banks’ performance. Appl Financ Econ 11(3):317–319CrossRef Neely MC, Wheelock DC (1997) Why does bank performance vary across states? Review 79(2):27–40 Pasiouras F, Kosmidou K (2007) Factors influencing the profitability of domestic and foreign commercial banks in the European Union. Res Int Bus Finance 21(2):222–237CrossRef Repullo R (2004) Capital requirements, market power, and risk-taking in banking. J Financ Intermed 13(2):156–182CrossRef Sharma MK, Bal HK (2010) Bank market concentration: a case study of India. Int Rev Bus Res Pap 6(6):95–107 Smirlock M (1985) Evidence on the (non) relationship between concentration and profitability in banking. J Money Credit Bank 17(1):69–83CrossRef Stiroh KJ, Rumble A (2006) The dark side of diversification: the case of US financial holding companies. J Bank Finance 30(8):2131–2161CrossRef
- 作者单位:Pankaj Sinha (1)
Sakshi Sharma (1)
1. Faculty of Management Studies, University of Delhi, Delhi, 110007, India
- 刊物类别:Engineering
- 刊物主题:Operating Procedures and Materials Treatment
Quality Control, Reliability, Safety and Risk
- 出版者:Springer India
文摘
The paper examines the impact of bank-specific, industry-specific and macroeconomic factors affecting the profitability of Indian Banks in a dynamic model framework. The persistence of bank profits and endogeneity of the factors had been accounted for using Generalised Method of Moments as suggested in Arellano and Bond (Rev Econ Stud 58(2):277–297, 1991). The panel data for the study have been obtained from 42 Indian Scheduled Commercial Banks for the period from 2000 to 2013. The lag of bank profit variable ROA has been found to be significantly indicating a moderate degree of persistence of profits in Indian Banking Industry. The study finds that the product markets of Indian Banks are moderately competitive, and less opaque due to asymmetry in information. The adjustment towards equilibrium is partial and not instantaneous, implying that the elimination of abnormal profits through competition is by no means instant, and banks can continue to retain a significant percentage profits from 1 year to another. The Indian banking sector is not far away from becoming a perfectly competitive industry. Bank-specific variables; capital to assets ratio, operating efficiency and diversification have been found to be significantly and positively affecting the bank profits. Credit risk, measured by provisions for bad debts, negatively impacts the bank profitability. The study also tests the Structure Conduct Hypothesis by using Herfindahl–Hirschman Index and finds evidence in its support. Bank profits respond positively to GDP growth, indicating that bank profits are pro-cyclical to the growth of economy whereas the increase in inflation rate affects bank profits negatively. It is observed that the crisis period did not make any significant impact on the profitability of banks. The study concludes that there is a moderate degree of persistence of bank profits, and most of the determinants of profits have a positive and significant impact on profitability of banks, which implies that Indian Banks in the last decade have been moving towards efficiency and dynamism. Keywords Profitability determinants Credit risk Operational efficiency Persistence Market power
| |
NGLC 2004-2010.National Geological Library of China All Rights Reserved.
Add:29 Xueyuan Rd,Haidian District,Beijing,PRC. Mail Add: 8324 mailbox 100083
For exchange or info please contact us via email.
| |