A look inside banking profitability: Evidence from a dollarized emerging country

Vera-Gilces, Paúl; Camino‐Mogro, Segundo; Ordeñana, Xavier; Cornejo-Marcos, Gino

doi:10.1016/j.qref.2019.05.002

Cited by 26 publications

(22 citation statements)

References 85 publications

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“…The negative value of the Boone indicator indicates higher competition while a positive value identifies a lower level of competition. Several researchers used this approach to measure competition in the banking industry [53–55].…”

Section: Literature Reviewmentioning

confidence: 99%

Impacts of risk and competition on the profitability of banks: Empirical evidence from Pakistan

Shair

Sun

et al. 2019

PLoS ONE

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The purpose of this paper is to investigate the impact of risk and competition on the profitability of the Pakistani banking industry. Data are retrieved from the annual statements of banks, the Ministry of finance Pakistan and the World Bank covering the period of (2007–2017). Two steps Generalized Method of Moments (GMM) with the collapse command is used as an estimation technique to overcome endogeneity, unobserved heterogeneity and autocorrelation problems. The results of the study showed that the liquidity risk has positive while credit risk, insolvency risk and competition hurt negatively the profitability of Pakistani banks. The results of the study also revealed that capitalization, size, taxation and GDP growth rate positively affect the Banks’ profits while banking sector development and infrastructure negatively affect banking profitability in Pakistan. The operational cost management positively affects net interest margins but negatively affects ROA and PBT in the Pakistani banking industry.

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Section: Literature Reviewmentioning

confidence: 99%

Impacts of risk and competition on the profitability of banks: Empirical evidence from Pakistan

Shair

Sun

et al. 2019

PLoS ONE

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“…Para el caso de Ecuador, Vera et al (2019) determina la inexistencia de la relación entre el riesgo de crédito y la rentabilidad de los bancos. Los autores toman como variable del riesgo de crédito a la provisión por pérdida de préstamos sobre el total de préstamos, y señalan que «este resultado puede sugerir que los bancos ecuatorianos están manteniendo niveles bajos de provisión de préstamos.…”

Section: La Literatura Sobre Los Efectos Del Riesgo De Crédito Sobre unclassified

“…Se precisó en el marco teórico que el incumplimiento del prestatario se mide a través del riesgo de crédito. De esta manera, los trabajos de Vera et al (2019), Xu et al (2019), Saona (2016) y Petria et al (2015) establecieron como riesgo de crédito a la provisión de las carteras de créditos. Para evaluar qué tan prudente o conservadora es la banca privada en Ecuador, primero se medirá el riesgo de crédito bajo un enfoque ex ante, a través de las provisiones generadas.…”

Section: Riesgo De Crédito Ex Ante Y Ex Post: Las Dos Caras De Una MIunclassified

Ecuador: La prudencia financiera de la banca privada en dolarización (2001-2019)

et al. 2020

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El objetivo es evaluar el nivel de prudencia financiera de la banca privada durante la dolarización. El enfoque de la metodología aplicada es cuantitativo, un análisis descriptivo de cuatro ejes: nivel de liquidez, solvencia, el crédito y su riesgo. Se concluye que la banca es profundamente conservadora con base en el histórico de los fondos disponibles, el alto gasto de provisión para créditos incobrables, y la elevada preferencia por la liquidez expresada en el cortoplacismo de los préstamos. Se afirma que este comportamiento ha obstaculizado un crecimiento alto y sostenido porque contribuye a la ineficiencia de la economía ecuatoriana.

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“…The policy is a welcomed development as it has important implications for profitability, competition, and stability. Asides from the Nigerian banking industry, this work documents the threshold level in the nonperforming loans-bank profitability nexus, unlike extant studies that assume linear relationship in the literature (Rajha, 2017;Rosenkranz & Lee, 2019;Shingjergji, 2013;Ugoani, 2016;Vera-Gilces, Camino-Mogro, Ordeñana-Rodríguez, & Cornejo-Marcos, 2020;Yurttadur et al, 2019).…”

mentioning

confidence: 91%

Is there a nonlinear relationship between nonperforming loans and bank profitability? Evidence from dynamic panel threshold

Bolarinwa

Olayeni

2021

Manage Decis Econ

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This study examines the threshold effect in the nonperforming loans–profitability nexus within the Nigerian banking industry. Using the innovative dynamic panel threshold of Seo, Kim, and Kim (2019), the work documents threshold levels of 3.5% and 5.0% of nonperforming loans for return on average assets (ROAA) and return on average equity (ROAE), respectively. These levels of nonperforming loans ensure equilibrium profitability without stability trade‐off in the industry. Similarly, the robust models suggest the threshold of 5.2% and 2.81% of impaired loans for optimal ROAA and ROAE, respectively. The results are important for policy formulations. It is recommended that the Central Bank of Nigeria (CBN) should review the 5% threshold nonperforming loans adopted in the industry in 2019 prudential guidelines to ensure stability in the Nigerian banking industry.

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A look inside banking profitability: Evidence from a dollarized emerging country

Cited by 26 publications

References 85 publications

Impacts of risk and competition on the profitability of banks: Empirical evidence from Pakistan

Impacts of risk and competition on the profitability of banks: Empirical evidence from Pakistan

Ecuador: La prudencia financiera de la banca privada en dolarización (2001-2019)

Is there a nonlinear relationship between nonperforming loans and bank profitability? Evidence from dynamic panel threshold

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