Using detailed ownership data for a sample of European commercial banks, we analyze the link between ownership structure and risk in both privately owned and publicly held banks. We consider five ...categories of shareholders that are specific to our dataset. We find that ownership structure is significant in explaining risk differences but mainly for privately owned banks. A higher equity stake of either individuals/families or banking institutions is associated with a decrease in asset risk and default risk. In addition, institutional investors and non-financial companies impose the riskiest strategies when they hold higher stakes. For publicly held banks, changes in ownership structure do not affect risk taking. Market forces seem to align the risk-taking behavior of publicly held banks, such that ownership structure is no longer a determinant in explaining risk differences. However, higher stakes of banking institutions in publicly held banks are associated with lower credit and default risk.
Purpose
The issue of mounting non-performing assets (NPAs) in Indian banking industry is serious and attracting attention of academia and policy planners. Thus, the purpose of this paper is to test ...the hypothesis whether NPAs in Indian commercial banking have reached at alarming state where they start affecting the technical efficiency levels adversely or not.
Design/methodology/approach
The efficiency score have been computed using case model (model with NPAs as bad/undesirable output) vs control model (model without NPAs as bad/undesirable output) methodology under meta-frontier data envelopment analysis framework.
Findings
It has been noticed that the effect of NPAs on overall technical efficiency and its various components is insignificant. The comparison of the case models (i.e. model with NPAs as bad output) with the control models (i.e. model without NPAs) reveals insignificant difference in average efficiency scores and rank distribution of commercial banks. The major source of inefficiency is technology gap (i.e. structure, setup and objectives of banking) among public, domestic private and foreign private categories of banks.
Practical implications
Though NPAs are increasing in Indian banking industry and specifically in Indian public sector banks because of their compulsory lending to priority sector yet the banks have huge scope to extend credit to priority sector as the NPAs have not reached at alarming stage where they start affecting adversely the efficiency performance.
Originality/value
Given the fact that the banking penetrations, structure and objectives differ significantly across ownership, separate frontiers for each ownership (public, private and foreign banks) category has been used to evaluate the technical efficiency levels of 81 commercial banks operating in India over the period 2005 to 2013.
•China's banks are more cost efficient than profit efficient.•Efficiency has improved over time.•Adjustment costs may exceed efficiency gains.•Size, market power, ownership, and listing help explain ...efficiency of banks.
This paper examines the cost and profit efficiency of four types of Chinese commercial banks over the period from 2002 to 2013. We find that the cost and profit efficiencies improved across all types of Chinese domestic banks in general and the banks are more profit-efficient than cost efficient. Foreign banks are the most cost efficient but the least profit efficient. The profit efficiency gap between foreign banks and domestic banks has widened after the World Trade Organization transition period (2007–2013). Ownership structure, market competition, bank size, and listing status are the main determinants of the efficiency of Chinese banks. We also find a causal relationship between efficiency and SROE by using the panel auto regression method. The evidence from the shadow return on equity (SROE) suggests that policy makers should be cautious of the adjustment costs imposed by the recapitalization process, which offsets the efficiency gains.
Any type of activity that results in caloric expenditure has the potential to reduce the risk of cardiovascular diseases; nonetheless, most people, especially office workers, are physically inactive. ...This study sought to evaluate the extent of physical inactivity and its determinants among the staff of selected banks in Accra, Ghana.
This was a cross-sectional study involving 219 banking staff randomly selected from five commercial banking institutions in Accra, Ghana. Demographic data was collected with a structured questionnaire. Physical inactivity was assessed using the Global Physical Activity Questionnaire. Study associations were determined using univariate analysis, and multivariate logistic regression models with adjusted odds ratio (AOR) and 95% confidence intervals (CI) estimated.
Two hundred and nineteen (219) participants were recruited, out of which 56.6% were males and 43.4% were females. The mean age (± SD) of the participants was 40.0±7.9 years. Physical inactivity was observed in 179 (81.7%) participants. The following were independently associated with physical inactivity: travel-related activities (AOR, 0.151; 95% CI, 0.059-0.384; p<0.001); working in the bank for 6-10 years (AOR, 4.617; 95% CI, 1.590-13.405; p = 0.005); and working in the bank for 11 years and above (AOR, 2.816; 95% CI, 1.076-7.368; p = 0.035).
Physical inactivity was very high among bankers. Travel-related activities reduced physical inactivity whiles working at the bank for more than six years increased physical inactivity. Thus, promoting regular physical activity, frequent monitoring, and implementation of other appropriate healthy lifestyle intervention strategies are vital to reduce risk of early onset disease conditions associated with physical inactivity in this population.
In recent years, with the continuous improvement of the financial system and the rapid development of the banking industry, the competition of the banking industry itself has intensified. At the same ...time, with the rapid development of information technology and Internet technology, customers' choice of financial products is becoming more and more diversified, and customers' dependence and loyalty to banking institutions is becoming less and less, and the problem of customer churn in commercial banks is becoming more and more prominent. How to predict customer behavior and retain existing customers has become a major challenge for banks to solve. Therefore, this study takes a bank's business data on Kaggle platform as the research object, uses multiple sampling methods to compare the data for balancing, constructs a bank customer churn prediction model for churn identification by GA-XGBoost, and conducts interpretability analysis on the GA-XGBoost model to provide decision support and suggestions for the banking industry to prevent customer churn. The results show that: (1) The applied SMOTEENN is more effective than SMOTE and ADASYN in dealing with the imbalance of banking data. (2) The F1 and AUC values of the model improved and optimized by XGBoost using genetic algorithm can reach 90% and 99%, respectively, which are optimal compared to other six machine learning models. The GA-XGBoost classifier was identified as the best solution for the customer churn problem. (3) Using Shapley values, we explain how each feature affects the model results, and analyze the features that have a high impact on the model prediction, such as the total number of transactions in the past year, the amount of transactions in the past year, the number of products owned by customers, and the total sales balance. The contribution of this paper is mainly in two aspects: (1) this study can provide useful information from the black box model based on the accurate identification of churned customers, which can provide reference for commercial banks to improve their service quality and retain customers; (2) it can provide reference for customer churn early warning models of other related industries, which can help the banking industry to maintain customer stability, maintain market position and reduce corporate losses.
China’s banking system has a relatively high level of state control, while an important task in regulating the banking system is to manage the profitability of banks. Using the stochastic frontier ...approach to assess the profitability of commercial banks not only allows for the bank’s ability to generate profits relative to the leading banks in the industry to be assessed but also takes into account the specifics of the management technologies used and the influence of the market environment. This article analyzes the profitability of the Chinese banking system for the period 2012–2020 using the stochastic frontier approach from the position of the central bank. The specifics of the analysis from the bank’s perspective imply a focus on the position of most banks regarding the level of best practices and trends in changing the overall level of profitability. Analysis may be of interest to banking regulators and researchers. In general, the Chinese banking system demonstrates a high level of profit efficiency and cost efficiency, although the dynamics of these indicators are negative. The reason for the negative dynamics is a decrease in the economic growth rate of the economy, the instability of the financial market and ongoing reforms. State-owned commercial banks are becoming highly profitable, while national joint-stock commercial banks are facing increasing competition and reducing efficiency of profitability. City and rural commercial banks maintain a high level of profitability due to state support.
Since May 2015 several U.S. Bank Holding Companies (BHCs) have been newly classified as small banks by regulators, thus benefiting from a friendlier regulatory capital environment. Using a ...difference-in-differences setting, we show that less regulation on small BHCs boosts small business lending of the affiliated commercial banks. We employ various tests to demonstrate that these findings are attributable to a capital channel where increases in lending are driven by the preferential capital treatment granted to the small BHC. The regulatory capital relief also has some positive effects for the local economy. Overall, the effects of the regulatory capital relief for small BHCs are consistent with its desired policy objectives.
This paper was accepted by Tomasz Piskorski, finance.
Aim/Purpose: This study aimed to examine the effect of marketing knowledge management (MKM) on bank performance via the mediating role of the Fintech innovation in Jordanian commercial banks.
...Background: An extensive number of studies found a significant relationship between Marketing knowledge management and bank performance (e.g., Akroush & Al-Mohammad, 2010; Hou & Chien 2010; Rezaee & Jafari, 2015; Veismoradi et al., 2013). However, there remains a lack of clarity regarding the relationship between marketing knowledge management (MKM) and bank performance (BP). Furthermore, the linkage between MKM and BP is not straightforward but, instead, includes a more complicated relationship. Therefore, it is argued that managing marketing knowledge management assets and capabilities can enhance performance via the role of financial innovation as a mediating factor on commercial banks; to date, however, there is no empirical evidence.
Methodology: Based on a literature review, knowledge-based theory, and financial innovation theory, an integrated conceptual framework has been developed to guide the study. A quantitative approach was used, and the data was collected from 336 managers and employees in all 13 Jordanian commercial banks using online and in hand instruments. Structural equation modeling (SEM) was used to analyze and verify the study variables.
Contribution: This article contributes to theory by filling a gap in the literature regarding the role of marketing knowledge management assets and capabilities in commercial banks operating in a developing country like Jordan. It empirically examined and validated the role of Fintech innovation as mediators between marketing knowledge management and bank performance
Findings: The main findings revealed that marketing knowledge management had a significant favorable influence on bank performance. Fintech innovation acted as partial mediators in this relationship.
Recommendations for Practitioners: Commercial banks should be fully aware of the importance of knowledge management practices to enhance their financial innovation and bank performance. They should also consider promoting a culture of practicing knowledge management processes among their managers and employees by motivating and training to promote innovations.
Recommendation for Researchers: The result endorsed Fintech innovation’s mediating effect on the relationship between the independent variable, marketing knowledge management (assets and capabilities), and the dependent variable bank performance, which was not addressed before; thus, it needs further validation.
Future Research: The current designed research model can be applied and assessed further in other sectors, including banking and industrial sectors across developed and developing countries. It would also be of interest to introduce other variables in the study model that can act as consequences of MKM capabilities, such as financial and non-financial performance measures
Why do middle-income country governments use costlier sovereign debt markets when cheaper finance is available from official creditors? This research note argues that left-leaning governments with ...labor and the poor as core constituencies are likely to prioritize markets in their annual foreign borrowings. This is because markets provide an exit option from official creditor conditions that have disproportionately negative effects on working classes. This finding puts limits on disciplinary assumptions that left-leaning governments should have relatively less access to sovereign debt markets and thus use them less. Instead, left-leaning middle-income countries are likely to use proportionally more market finance as they fulfill annual foreign borrowing needs. This, in turn, shapes which middle-income countries are likely to become relatively more exposed to global debt market costs and pressures as they accumulate external debt over time.
Amongst major economies, China has been taking a lead in the development of central bank digital currency (CBDC), which has generated widespread interest and impact around the globe. China's CBDC, ...commonly known as e-CNY, is designed with several distinctive features, enabling it to compare favorably to other payment methods such as credit cards, mobile payment, unbacked cryptocurrency, and stablecoins. A variety ofsocial, economic, political, and regulatory reasons can be identified to help explain China's active pursuit of CBDC. However, the prospect of success will be affected by many factors and may vary between the domestic and international markets. This article argues that the adoption of e-CNY will likely succeed domestically, but may face more challenges in the international markets. The development of e-CNY seems to have created a catfish effect on other major economies in the race for CBDC. It is not fully clear, however, that the CBDC race will be better explained by the first-mover or the late-mover advantage theory. The CBDC project will have both public and private law implications, and several legal issues warrant particular attention in relation to the legal status of CBCD, the role and responsibility of the central bank, legal remedies for losses suffered by CBDC users from cybersecurity issues and operational problems, and the issue of data privacy and protection.
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