The Determinants of Bank Performance in China

Heffernan, Shelagh; Fung, K. C.

doi:10.2139/ssrn.1247713

Cited by 44 publications

(52 citation statements)

References 46 publications

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“…Studies finding a negative relationship include: Ali et al (2011), Chronopoulos et al (2012, Goddard et al (2004), Guru et al (2002). In other studies, this relationship was not significant (Al-Jafari & Alchami, 2014;Almumani, 2013;Alper & Anbar, 2011;Heffernan & Fu, 2008;Sufian & Noor, 2012;Tan & Floros, 2012;Tregenna, 2009;Turgutlu, 2014).…”

Section: Bank-specific Determinantsmentioning

confidence: 77%

“…A significantly negative relationship was also reported (Sufian & Habibullah, 2009). A nonsignificant relationship has been reported (Chantapong, 2005;Heffernan & Fu, 2008).…”

Section: Bank-specific Determinantsmentioning

confidence: 86%

“…In other studies, this relationship failed to reach significance (Almumani, 2013;Alp et al, 2010;Athanasoglou et al, 2006;Ayadi & Boujelbene, 2012;Ayaydin & Karakaya, 2014;Ben Naceur & Goaied, 2008;Chantapong, 2005;Javaid et al, 2011;Lee, 2012;Liu & Wilson, 2010;Rachdi, 2013;Saeed, 2014;Tan & Floros, 2012). In other studies, the relationship of the size of the credit portfolio and profitability was negative (Aburime, 2008;Chronopoulos et al, 2012;Demirguc-Kunt & Huizinga, 1999;Heffernan & Fu, 2008;Lee & Hsieh, 2013;Mirzaei & Mirzaei, 2011;Naseem et al, 2012;Raza et al, 2013;Staikouras & Wood, 2004;Sufian & Noor, 2012;Vong & Chan, 2009;Wall, 1985). The widespread nonperformance of bank loans, typical in the country in which the study was performed, was cited in one study.…”

Section: Bank-specific Determinantsmentioning

confidence: 96%

“…During the crisis years of 2007À2009, they increased and did have a significantly negative relationship with profitability (Dietrich & Wanzenried, 2011). Some studies reported a positive relationship between this ratio and profitability (Heffernan & Fu, 2008;Olson & Zoubi, 2011;Riaz, 2013;Sufian & Habibullah, 2009). One explanation, referred to as the "skimping hypothesis," is that a bank may rationally reduce loan underwriting and monitoring costs as doing so may offset higher nonperformance costs (Berger & DeYoung, 1997).…”

Section: Bank-specific Determinantsmentioning

confidence: 97%

“…Higher numbers indicate a bank is operating less efficiently. Its relationship with profitability is almost uniformly negative (Alexiou & Sofoklis, 2009;Almumani, 2013;Ameur & Mhiri, 2013;Bhatia et al, 2012;Bourke, 1989;Cerci et al, 2012;Dietrich & Wanzenried, 2011;Francis, 2013;Heffernan & Fu, 2008;Kosmidou et al, 2005;Liu & Wilson, 2010;Olson & Zoubi, 2011;Pasiouras & Kosmidou, 2007;Rachdi, 2013;Sastrosuwito & Suzuki, 2012;Trujillo-Ponce, 2013;Turgutlu, 2014;van Ommeren, 2011). Failure of this variable to significantly relate to profitability was found in the work by Ali et al (2011), Flamini et al (2009), and Vong and Chan (2009.…”

Section: Bank-specific Determinantsmentioning

confidence: 99%

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The Profitability and Performance Measurement of U.S. Regional Banks Using the Predictive Focus of the “Fundamental Analysis Research”

Growe¹,

DeBruine²,

Maldonado³

2014

Advances in Management Accounting

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Purpose À This paper examines the profitability and performance measurement of U.S. regional banks during the period 1994À2011, using the GMM estimator technique. Our study extends prior research by including several factors not previously considered using U.S. data.Approach À We use bank-specific, industry-specific, and macroeconomic determinants of profitability contemporaneous with our performance indicators. We follow the accounting fundamental analysis path in explaining the bank performance.Findings À Among the performance measures, the efficiency ratio and provisions for credit losses are negatively and equity scaled by assets is positively related to profitability. However, these relationships either reverse (efficiency ratio and provisions for credit losses) or become insignificant (equity scaled by assets) when the target becomes change in profitability. The level of nonperforming assets is negatively related to profitability across all measures of profitability used. Macroeconomic variables are largely unrelated to profitability during the year they are measured. However, they have a significant relationship with earnings change measures, suggesting they have a lagged effect on profitability. The slope of the yield curve is especially strong in this regard.Originality À We use our determinants to model changes in bank profitability one year ahead, in addition to including several factors not previously considered, using the predictive focus of the fundamental analysis research.Keywords: Banking profitability; return on assets (ROA); return on equity (ROE); efficiency ratio; macroeconomic factors; fundamental analysis research LITERATURE REVIEWWe review the literature on the determinants of bank profitability. Because of its widespread acceptance, for the sake of conciseness, and to facilitate comparisons across studies, we cite ROA results unless otherwise specified. We will also describe the approach of fundamental analysis to earnings prediction. Geographic Scope of Banking Profitability StudiesSeveral studies have focused on bank profitability in individual countries. Single country studies are of

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Section: Bank-specific Determinantsmentioning

confidence: 77%

“…A significantly negative relationship was also reported (Sufian & Habibullah, 2009). A nonsignificant relationship has been reported (Chantapong, 2005;Heffernan & Fu, 2008).…”

Section: Bank-specific Determinantsmentioning

confidence: 86%

Section: Bank-specific Determinantsmentioning

confidence: 96%

Section: Bank-specific Determinantsmentioning

confidence: 97%

Section: Bank-specific Determinantsmentioning

confidence: 99%

See 3 more Smart Citations

The Profitability and Performance Measurement of U.S. Regional Banks Using the Predictive Focus of the “Fundamental Analysis Research”

Growe¹,

DeBruine²,

Maldonado³

2014

Advances in Management Accounting

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Electronic Financial Disclosure: Islamic Banking vs Conventional Banking in GCC

Sarea

Al-Sartawi

Khalid

2018

Lecture Notes in Computer Science

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This paper examines electronic financial disclosure in Islamic banking vs conventional banking in Gulf cooperation council (GCC). A checklist was adopted to measure the level of electronic financial disclosure in Islamic banking vs conventional banking in GCC. The sample size consisted of total 90 banks in GCC (44 Islamic and 46 conventional) for the year 2017. The statistical analysis indicated that the overall level of of electronic financial disclosure (EFD) was 73 %, and 78.6% by Islamic banks and conventional banks respectively. The results also report a significant and positive relationship with firm size, and an insignificant relationship with profitability, and age. This paper should be particularly relevant to central banking authorities considering in banking sector in GCC for strategizing policies in the future of EFD as well as to serve as a guide for academic EFD in banking sector in GCC.

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