The impact of economic policy uncertainty on banks' non-interest income activities

Boungou, Whelsy; Mawusi, Charles

doi:10.1016/j.inteco.2021.12.003

Cited by 13 publications

(6 citation statements)

References 13 publications

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“…The study did not extend the analysis to multiple countries, and the study analyzed only one indicator of bank profitability. Boungou and Mawusi (2022) analyzed the effect of EPU on banks' non-interest income activities. They analyzed 3,913 banks operating in 9 countries from 2009 to 2018.…”

Section: Banks and Economic Policy Uncertainty: Empirical Evidencementioning

confidence: 99%

“…They did not find a significant effect of EPU on banks' non-interest income. However, Boungou and Mawusi (2022)'s study analyzed few countries, and the study did not examine how EPU affect several indicators of bank profitability.…”

Section: Banks and Economic Policy Uncertainty: Empirical Evidencementioning

confidence: 99%

“…We focus on the banking sector because the recent debate in the literature suggests that EPU has some depressive effects on bank performance (Tran and Houston, 2021;Kim and Yasuda, 2021;Wang et al, 2022;Boungou and Mawusi, 2022). Existing studies show that bank profitability is affected by external economic factors such as monetary policy (Borio et al, 2017;Altavilla et al, 2018), the low interest rate environment (Bikker and Vervliet, Economic policy uncertainty and bank profit 803 JEL Classification -G21, G28, C53, E43, E52 2018), inflation (Tan and Floros, 2012), market structure (Mirzaei et al, 2013), bank credit supply (Ryoo, 2013), gross domestic product (GDP) growth (Bonaccorsi di Patti and Palazzo, 2020) and productivity (Batten and Vo, 2019), among others.…”

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Does economic policy uncertainty affect bank profitability?

Ozili¹,

Arun

2022

IJMF

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PurposeManagers are concerned about how the macroeconomic environment affects business profit. Focusing on banks, this study aims to investigate the effect of economic policy uncertainty (EPU) on bank profitability in 22 advanced countries.Design/methodology/approachThe study used the panel fixed effect regression methodology to assess the effect of EPU on several measures of bank profitability for 22 advanced countries from 1998 to 2017. The measures of bank profitability are net interest margin, lending-deposit spread, non-interest income (NII) ratio, after-tax return on asset, before-tax return on asset, after-tax return on equity and before-tax return on equity.FindingsThe findings reveal that high EPU negatively affects bank NII. Real gross domestic product growth rate, nonperforming loans and regulatory capital ratio are negatively related to profitability in times of high EPU. The findings also reveal that high EPU has a positive effect on bank profitability in Asia and the region of the Americas, as these regions witnessed high return on equity in times of high EPU.Practical implicationsThe implication of the findings is that, although EPU has a depressive effect on some indicators of bank profitability, regional characteristics can ameliorate the depressive effects of EPU on bank profitability.Originality/valueThis study contributes to the literature that examine the economic consequences of EPU on firms. To the best of the authors’ knowledge, this study is among the first to examine how regional characteristics affect the relationship between EPU and bank profitability using cross-country data.

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Section: Banks and Economic Policy Uncertainty: Empirical Evidencementioning

confidence: 99%

Section: Banks and Economic Policy Uncertainty: Empirical Evidencementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Does economic policy uncertainty affect bank profitability?

Ozili¹,

Arun

2022

IJMF

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“…memiliki strategi perusahaan yang cukup baik sehingga perusahaan tersebut dapat menjaga perusahaan dalam kondisi yang sehat dan tetap menciptakan kinerja yang terbaik serta mempertahankan gelarnya sebagai perusahaan pelat merah atas penanganan operasionalnya walaupun kondisi global dan iklim investasi yang unfavorable sekalipun. Hal ini menjadi salah satu kajian yang menarik karena strategi yang digunakan berdasarkan indikator pengukuran antara Financial cost (Nguyen, 2012) dan Comprehensive Income (Boungou & Mawusi, 2022) yang dihasilkannya menjadi asumsi yang baik untuk diterapkan di seluruh perusahaan untuk mempertahankan kinerja terbaiknya atau untuk membuat kinerja Financial cost menggambarkan sejauh mana besaran komponen pengurang dari beberapa akun deduksi dari segmentasi pos kinerja perusahaan (Sekine, 2022).…”

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Pengaruh Financial Cost dan Comprehensive Income terhadap Non-Interest Bearing Debt Perusahaan Badan Usaha Milik Negara (BUMN) Jasa Perbankan PT Bank Rakyat Indonesia (Persero) Tbk.

Kurniawan,

Tambunan,

Simarmata

2023

JAPRI

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The research was conducted to comprehensively determine the effect of non-interest bearing debt on financial cost and Comprehensive Income. This study uses a quantitative descriptive approach, with a population of SOEs engaged in financial services represented by PT Bank Rakyat Indonesia (Persero) Tbk. from several banks in Indonesia. The sampling technique uses a probability sample with a purposive sampling method. In addition, the sample data from this company were 20 from the last five years of PT Bank Rakyat Indonesia (Persero) Tbk's financial reporting. which includes Q1, Q2, Q3, and Q4 (Audited). Data analysis using SmartPLS4 software with the study results showed that the non-interest bearing debt variable significantly affects Comprehensive Income, and financial cost significantly affect Comprehensive Income. However, other factors affect the value of Comprehensive Income, which tends to increase, like pro forma profit. Thus H1, H2, and H3 are accepted, which means that there is a significant influence between non-interest bearing debt, earnings before tax, and Comprehensive Income.

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The Impact of Economic Policy Uncertainty on Bank Stability

2023

Applied Economics and Policy Studies

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The impact of economic policy uncertainty on banks' non-interest income activities

Cited by 13 publications

References 13 publications

Does economic policy uncertainty affect bank profitability?

Does economic policy uncertainty affect bank profitability?

Pengaruh Financial Cost dan Comprehensive Income terhadap Non-Interest Bearing Debt Perusahaan Badan Usaha Milik Negara (BUMN) Jasa Perbankan PT Bank Rakyat Indonesia (Persero) Tbk.

The Impact of Economic Policy Uncertainty on Bank Stability

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