Efficiency in private banking: evidence from Switzerland and Liechtenstein

Burgstaller, Johann; Cocca, Teodoro D.

doi:10.1007/s11408-010-0147-5

Cited by 10 publications

(8 citation statements)

References 33 publications

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“…Burgstaller and Cocca (2011) find that banks in Liechtenstein perform better than their Swiss counterparts. In the two financial centers, relatively large technical and scale inefficiency are linked to specialization and investment but not to bank size.…”

Section: Literature On the Banking Industry In Financial Centersmentioning

confidence: 78%

Foreign bank diversification and efficiency prior to and during the financial crisis: Does one business model fit all?

Curi

Lozano‐Vivas

Zelenyuk

2015

Journal of Banking & Finance

115

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Section: Literature On the Banking Industry In Financial Centersmentioning

confidence: 78%

Foreign bank diversification and efficiency prior to and during the financial crisis: Does one business model fit all?

Curi

Lozano‐Vivas

Zelenyuk

2015

Journal of Banking & Finance

115

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“…Multi-country studies in the European Union have focused on either six or seven larger countries (Goddard et al , 2004a, b), two smaller countries (Burgstaller and Cocca, 2010) or a group of seven neighboring countries (Athanasoglou et al , 2006). For example, Goddard et al (2004a) investigated the relationship between profitability and growth in European banks in five countries for the 1992–1998 period and Goddard et al (2004b) focused on determinants of profitability and growth in 665 banks operating in the six largest European countries in the mid-1990s.…”

Section: Theoretical Framework Previous Empirical Studies and Hypothesis Developmentmentioning

confidence: 99%

Organizational-level profitability determinants in commercial banks: Swedish evidence

Yazdanfar

2018

JES

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Purpose The purpose of this paper is to examine organizational-level determinants of commercial bank profitability. Design/methodology/approach Using bank-level longitudinal panel data for the 2005–2014 period, this study conducts univariate and multivariate statistical analyses, i.e. ordinary least squares (OLS), fixed-effects and feasible generalized least-squares (FGLS) regressions, to analyze profitability variables in Swedish commercial banks. Findings The findings indicate that the organizational-level determinants growth, lagged profitability and capital adequacy are positively related to banks’ current profitability. No relationship was found between banks’ size and their profitability. Moreover, no relationship was found between the macroeconomic control variable gross domestic product (GDP) and bank profitability. Practical implications Given that organizational-level determinants explain sustainable bank profitability, the findings can be used by bank managers as a basis for low-risk bank policy formulation, and by regulators in monitoring banks relative to international standards (i.e. the Basel Accords). Originality/value To the best of the authors’ knowledge, this is the first study to investigate determinants of bank profitability in Sweden, a country with a strong tradition of bank-based financing, with previous experience of a domestic bank crisis in the 1990s, and where the recent global financial crisis had relatively little impact on domestic banks.

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“…Although most studies find positive relation of non-interest income and profitability indicators, Burgstaller and Cocca (2011) investigating profitability, efficiency and growth of private banking sector from Switzerland and Liechtenstein do not come to similar conclusions and do not find a significant relation between fee-income and profitability of bank, measured as relation of net income from fees and commissions to assets under management. It is worth mentioning that their study does not include Additionally, the study of Burgstaller and Cocca (2011) examines banks in the period just before the financial crisis, while post-crisis reality created considerable pressure on a reduction of management fees on investments products, which could make wealth management services less profitable (see Fabozzi et al, 2010). Finally, there should be mentioned that non-interest income, apart from fees and commissions, also consists of financial transactions' earnings, current earnings from securities and other ordinary income, which are not result of the core activity of banks specialized in private banking.…”

Section: Resultsmentioning

confidence: 86%

Non-Interest Income and Profitability in Private Banking. Evidence from Liechtenstein

Andrzejuk¹

2018

ijsr

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Purpose-The aim of this article is to present results of research on the relation between noninterest income and bank's profitability for Liechtenstein banks specialized in private banking. Design/Methodology/Approach-The study examines 12 Liechtenstein banks specialized in private banking and wealth management services in the period from 2014 to 2016. Example of Liechtenstein has been chosen as the country is a significant European private banking centre. Data used in the research come from financial statements published by the banks. The relationship between profitability, presented as return on equity (ROE) and return on assets (ROA), and noninterest to interest income ratio has been examined by Pearson correlation coefficient. Findings-Results show a negative correlation between non-interest to interest income ratio and ROA. No relevant correlation had been found between non-interest to interest income ratio and ROE. Originality/Value-Most of the researchers investigating the relation between non-interest income and profitability of banks show opposite results to those presented in this paper. Available studies are concentrated on markets dominated by retail and corporate banking services generating mainly interest income. This paper treats the problem of non-interest income's relation to banks' profitability from the perspective of private banking, a specific branch of financial services focused on services generating earnings which are not based on interest-based products. Article type-Research paper.

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Efficiency in private banking: evidence from Switzerland and Liechtenstein

Abstract: Data envelopment analysis, Technical efficiency, Private banking, D24, G21,

Cited by 10 publications

References 33 publications

Foreign bank diversification and efficiency prior to and during the financial crisis: Does one business model fit all?

Foreign bank diversification and efficiency prior to and during the financial crisis: Does one business model fit all?

Organizational-level profitability determinants in commercial banks: Swedish evidence

Non-Interest Income and Profitability in Private Banking. Evidence from Liechtenstein

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