Effects of branch expansion on bank efficiency: evidence from Japanese regional banks

Harimaya, Kozo; Kondo, Kazumine

doi:10.1108/mf-11-2014-0278

Cited by 17 publications

(12 citation statements)

References 46 publications

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“…This approach will provide a comprehensive overview of the efficiency level of a bank as well as determine the determinants of efficiency (Subandi & Ghozali, 2013). Research on efficiency determination has been conducted in various countries, one of which is the one by Harimaya and Kondo (2016) which addresses the impact of branch opening on bank efficiency in Japan. The results reveal that regional banks can lower cost inefficiencies by expanding branch networks to a certain level.…”

Section: Introductionmentioning

confidence: 99%

Measuring The Efficiency of Indonesian Sharia Rural Banks: Two Stage Approach

Nugrohowati

2019

JEP

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This paper aims to measure the efficiency level of Sharia Credit Banks in Indonesia over the period of 2012 to 2015. In the first stage, this study uses a Two Stage Approach to measure the level of efficiency with Data Envelopment Analysis (DEA) using the Banxia Frontier Analysis (BFA) software. Then, the second stage involves the analysis of factors that influence the efficiency level of a bank by panel data regression method. On the basis of the test, it is revealed that the Sharia Rural Banks in Indonesia during the study period are not been fully efficient. Some internal factors of the bank, namely BOPO ratios, have a significant adverse impact on the efficiency, while KPPM has a positive and significant influence on the efficiency of BPRS in Indonesia. Meanwhile the total asset, NPF and ROA variables have no significant effect on the efficiency, while the interest rate or BI Rate and inflation have a positive and significant influence on the efficiency of the BPRS.

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Section: Introductionmentioning

confidence: 99%

Measuring The Efficiency of Indonesian Sharia Rural Banks: Two Stage Approach

Nugrohowati

2019

JEP

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“…As researched by previous scholars adequate levels of branch expansion have positive impacts on both cost and profit efficiencies of banks for example see Reference [11].…”

Section: Determinants Specific To the Bankmentioning

confidence: 99%

The Determinants of Private Commercial Banks Profitability: In the Case of Selected Ethiopian Private Banks

Yigermal¹

2017

IJEBO

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Abstract:The main objective of the paper is to analyze the impact of bank specific and macro-economic factors on the profitability of selected Ethiopian private commercial banks over the period of 2005 to 2014. To meet the objective, both descriptive and random effect panel econometrics method of data analysis has been employed. The study uses both return on asset (ROA) and return on equity (ROE) as a measurement for banks profitability. Private Banks profit after tax gets increasing year after year and their ROA is found to be three percent on average. The deposit share of private commercial banks reached above 30 percent in 2014, while it was only 10 percent in 2000. The panel econometrics result shows that, the variable bank size and GDP growth rate has a positive and significant impact on private commercial banks ROA and ROE. While, interest rate spread has a negative and significant impact. The variable Loan to deposit ratio has negative and significant impact on banks ROA while, it has no effect on their ROE. Inflation also an important variable in explaining ROA at 10% significant level but, it has no effect on ROE. The other important variable in explaining ROE is loan concentration index it has positive and significant impact on banks ROE. But, it does not significantly explain ROA. As a recommendation the significant and positive impact of Bank size can be taken as a good signal for commercial banks to merge and to have scale advantage. The significant impact of macro-economic variables in explaining banks profit is an indicator to designed policies that promote sustainable output growth and controlling inflation to have stable banking sector.

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“…It is used as a proxy for bank's location (Bukhair, 2013). According Harimaya and Kondo (2011), expansion of branch network at sufficient level will provide positive effect on bank cost and profit. H5 : Number of branches affect significantly positive on profitability of Islamic banking According to Smaoui and Salah (2012), Bukhair (2013) bank size is a very important factor affecting the profitability level of Islamic banks because an increase in bank's size would lead to a reduction in information gathering cost, and consequently, maximize profitability.…”

Section: Development Of Hypothesesmentioning

confidence: 99%

Analysis the Effect of Macroeconomic Indicators and Specific-Firm Characteristic as Determinant Profitability of Islamic Banks in Asia

Widyaningrum

Siswantoro

2015

GReviewIEB

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:The purpose of this study is to examine the effect of macroeconomic indicators and specific-firm characteristics on the profitability of Islamic banks in Asia for period [2008][2009][2010][2011][2012]. Macroeconomic indicators using variables GDP growth and inflation, while the firm-specific characteristics using variables leverage, capitalization, operating expense, asset quality, number of branches, and firm size. Bank profitability measured by ROA and ROE. Research method using Ordinary Least Squares regression (OLS) to process the data types unbalanced panels and balanced panel. Unbalanced panel using sample of 42 Islamic banks with 188 observations, while on balanced panel using sample of 28 Islamic banks with 140 observations. The result of this research shows that capitalization, firm size, GDP growth, and inflation are determinants affecting ROA with positive and significant influence, while operating expense and leverage are significantly negative determinants that affect ROA. Asset quality and number of branches had no significant influence to ROA. The research also shows that determinant factors that affect ROE with positive and significant influence are captalization, number of branch, GDP growth, and inflation, while operating expense, and asset quality are determinants that affect significantly negative to ROE. Leverage and firm size don't have significant influence to ROE. These results expected to be useful as a consideration material to improve the performance of Islamic banking, especially in Indonesia in order to compete with Islamic banking in Asia.

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Effects of branch expansion on bank efficiency: evidence from Japanese regional banks

Cited by 17 publications

References 46 publications

Measuring The Efficiency of Indonesian Sharia Rural Banks: Two Stage Approach

Measuring The Efficiency of Indonesian Sharia Rural Banks: Two Stage Approach

The Determinants of Private Commercial Banks Profitability: In the Case of Selected Ethiopian Private Banks

Analysis the Effect of Macroeconomic Indicators and Specific-Firm Characteristic as Determinant Profitability of Islamic Banks in Asia

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