Cross-sectional determinants of bank performance under deposit dollarization in emerging markets

Kutan, Ali M.; Ozsoz, Emre; Rengifo, Erick W.

doi:10.1016/j.ememar.2012.07.003

Cited by 30 publications

(17 citation statements)

References 18 publications

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“…Their findings are same for both individual as well as aggregate bank data. Kutan, Ozsoz and Rengifo (2012) examine the profitability of 36 dollarized banking systems. Findings reveal that dollarization discourages bank performance and as a result bank profitability will be low.…”

Section: Introductionmentioning

confidence: 99%

Determinants of Bank Profitability: Empirical Evidence from Bangladesh

Rahman

Hamid²,

Khan³

2015

IJBM

103

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This study attempts to investigate capital strength, credit risk, ownership structure, bank size, non-interest income, cost efficiency, off-balance sheet activities, liquidity as potential bank specific determinants as well as growth in gross domestic products, inflation as potential macroeconomic determinants of bank profitability by taking 25 commercial banks from Bangladesh for a period ranges from 2006 to 2013. Three different measures of profitability namely return on assets (ROA), net interest margin over total assets (NIM) and return on equity (ROE) are used in the study. The empirical findings suggest that capital strength (both regulatory capital and equity capital) and loan intensity has positive and significant impact on profitability. Results also show that cost efficiency and off-balance sheet activities have negative and significant impact on bank profitability. The impact of other variables is not uniform in respect of different measures of profitability. Non-interest income, credit risk and GGDP are found as important determinant for NIM. Size has a positive and significant impact on ROA. Finally inflation has a negative and significant impact on ROA and ROE.

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Section: Introductionmentioning

confidence: 99%

Determinants of Bank Profitability: Empirical Evidence from Bangladesh

Rahman

Hamid²,

Khan³

2015

IJBM

103

View full text Add to dashboard Cite

show abstract

“…In addition, Demirgüç-Kunt and Huizinga (1999) demonstrate that bank profitability is associated closely with a variety of structural and institutional elements besides macroeconomic indicators. Using a sample of emerging economies, Kutan et al (2012) also show that not only macroeconomic factors but also institutions have a significant effect on bank profitability.…”

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confidence: 99%

Macroeconomic Impact of Bank Regulation and Supervision: A Cross-Country Investigation

Neyaptı

Dinçer

2014

Emerging Markets Finance and Trade

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Bank regulation and supervision (RS) is a formal institutional mechanism that aims to reduce the adverse selection and moral hazard risks in the banking sector. This paper offers an empirical exploration of the relationship between banking-sector performance and RS using data on the legal quality of bank regulation and supervision. The main channels via which RS affects bank performance are considered to be depositor trust, investment mobilization, and borrower discipline. An event study of up to fifty-three countries provides robust evidence that RS has significant positive effects on bank deposits and investment rate and significant negative effects on nonperforming loans.

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“…Yet, it appears that banks are aware of the transformation of the risk and thus position themselves accordingly by increasing loan loss provisioning which thus decreases their profitability. Ozsoz [12] and Kutan et al [13] have provided evidence of this phenomenon by demonstrating that banks in dollarized economies have lower profitability and behave more risk averse as a consequence of this risk.…”

Section: Introductionmentioning

confidence: 97%

Bank Regulation in Dollarized Economies: The Case of Turkey

Rengifo

Ozsoz²,

Akinkunmi³

et al. 2013

IJFS

Self Cite

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Regulators in emerging markets are increasingly curtailing the practice of foreigncurrency lending. In such a move Turkish regulatory authorities banned foreign currencylending to households in 2009. This paper examines the evolution of financial dollarization inTurkey in the 2002–2009 period by looking the currency composition of loans and deposits inthe banking system and the macroeconomic developments. We find that the Turkish bankingsystem was unhedged against currency fluctuations and the regulators acted preemptively inbanning the practice

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Cross-sectional determinants of bank performance under deposit dollarization in emerging markets

Cited by 30 publications

References 18 publications

Determinants of Bank Profitability: Empirical Evidence from Bangladesh

Determinants of Bank Profitability: Empirical Evidence from Bangladesh

Macroeconomic Impact of Bank Regulation and Supervision: A Cross-Country Investigation

Bank Regulation in Dollarized Economies: The Case of Turkey

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