Ownership concentration of three large Belgian banks during the crisis

Deudon, Jean Charles; Marques, Ana; Sarens, Gerrit

doi:10.1108/cg-09-2014-0104

Cited by 4 publications

(2 citation statements)

References 20 publications

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“…Moreover, the influence is increased after the crisis. Furthermore, the impact of SA on the CG is widely accepted in both firms (Fabrizio et al, 2019; Souha & Anis, 2016) and among banks (Deudon et al, 2015; Dube & Mkumbiri, 2014). Since SA impacts the CG (in banks too) and CG impacts the CFP in banks, it can be postulated easily using the deduction that SA would impact the CFP in the banks too.…”

Section: Theoretical Framework Literature Review and Hypotheses Formu...mentioning

confidence: 99%

Impact of Shareholders’ Activism on the Performance of Banks in India: A Panel Data Application

Rastogi

Singh

Kanoujiya

2023

Business Perspectives and Research

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There is a widespread uncertainty regarding the usefulness of shareholder activism (SA) as a part of corporate governance for firms and banks. SA has wide acceptance across the board among all the stakeholders’ participation. Since banks are the backbone of any economy, any endeavor (support to SA) creating difficulty may boomerang. Such actions do more harm than good; therefore, it is imperative to determine whether SA is beneficial to the banks or not. In this study, the SA index is built for Indian banks. The data relating to bank performance and valuation is gathered for 2016–2019. Panel data econometrics is applied to determine the impact of SA on banks performance. Results reveal that SA impacts bank performance. Furthermore, transparency and disclosure significantly moderates the association of SA with the performance. However, SA is not impacting bank valuation. It is a unique study of its kind to provide insights on SA for the banking sector.

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Section: Theoretical Framework Literature Review and Hypotheses Formu...mentioning

confidence: 99%

Impact of Shareholders’ Activism on the Performance of Banks in India: A Panel Data Application

Rastogi

Singh

Kanoujiya

2023

Business Perspectives and Research

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“…A concentrated structure can be useful in case of financial distress. This is because governments will be more likely to participate in a rescue strategy when the ownership structure is stable and concentrated (Deudon et al, 2015).…”

Section: Type Of Ownershipmentioning

confidence: 99%

Corporate Governance: An Overview. From Creation of Value for Shareholders by the Board to the Duality Role of Its Chairperson

Sayumwe¹

2019

JBAR

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Do promoters cause financial distress in a bank?

Rastogi,

Kanoujiya

2024

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Purpose The study aims to explore the impact of ownership concentration (OC) on bank financial distress (FD). Furthermore, the bank’s financial stability levels determine the association between the two. Design/methodology/approach Bank data of 33 Indian commercial banks are procured for ten years (2013–2022). The panel data econometrics is applied for empirical estimations. The quantile regression approach is used to determine the association between OC and FD at different quantiles of the FD. Non-normalcy of the data is checked and ensured before applying the quantile regression. Findings Surprisingly, it is found that promoters have a nonlinear impact on the firm’s stability. The inverted U-shape result implies that as promoters cross a threshold level, the benefit of increasing promoters’ stake takes a beating and a further increase in promoters’ stakes adversely impacts the stability of the banks. Moreover, this threshold value increases while moving from low to high levels of stability in a quantile regression application. Research limitations/implications This study uses promoters as the proxy for OC. Other existing definitions of OC are not used in the study, which can further improve the robustness of the results. Additionally, the use of the type of ownership (private, public or foreign) is also not adopted in the present study. Both the limitations can be the study’s future scope on the topic. Practical implications The high OC is supposed to influence corporate governance adversely. Therefore, policymakers recommend low OC for better governance. However, the present study finds evidence that a higher OC (high threshold of OC as the stability increases) would be better for financial stability. This situation demands a trade-off between governance and financial stability regarding OC. Originality/value The authors do not observe any study having the nonlinear impact of OC on financial stability (opposite of FD). Moreover, the threshold of OC for the optimum level of financial stability increases as stability goes high. This evidence using quantile regression and finding the turning point using a quadratic equation is also not seen in the literature.

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Ownership concentration of three large Belgian banks during the crisis

Cited by 4 publications

References 20 publications

Impact of Shareholders’ Activism on the Performance of Banks in India: A Panel Data Application

Impact of Shareholders’ Activism on the Performance of Banks in India: A Panel Data Application

Corporate Governance: An Overview. From Creation of Value for Shareholders by the Board to the Duality Role of Its Chairperson

Do promoters cause financial distress in a bank?

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