The impact of management and board ownership on profitability in banks with different strategies

Westman, Hanna

doi:10.1016/j.jbankfin.2011.05.013

Cited by 66 publications

(51 citation statements)

References 102 publications

(130 reference statements)

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“…A potential explanation for the rather diverging results of the studies examining the impact of management and directors ownership on banks’ performance and risk‐taking is the interaction between ownership structure and banks’ strategies. Westman () finds that management ownership has a positive impact on profitability of nontraditional banks (i.e., main activities are securities trading, wealth management, and underwriting), whereas directors’ ownership has a similar effect in traditional banks (i.e., main activities are deposit taking and loan granting). Her sample includes 867 bank‐years for 477 European banks over 2000–2006.…”

Section: Ownershipmentioning

confidence: 99%

Corporate Governance of Banks: A Survey

Haan

Vlahu

2015

Journal of Economic Surveys

199

105

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This paper reviews the empirical literature on the corporate governance of banks. We start by highlighting the main differences between banks and nonfinancial firms and focus on three characteristics that make banks special: (i) regulation, (ii) the capital structure of banks, and (iii) the complexity and opacity of their business and structure. Next, we discuss the characteristics of corporate governance in banks and how they differ from the governance of nonfinancial firms. We then review the evidence on three governance mechanisms: (i) boards, (ii) ownership structures, and (iii) executive compensation. Our review suggests that some of the empirical regularities found in the literature on corporate governance of nonfinancial institutions, such as the positive (negative) association between board independence (size) and performance, do not hold for banks. Also, existing work provides no conclusive results regarding the relationship between different governance mechanisms and various measures for banks’ performance. We discuss potential explanations for these mixed results.

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Section: Ownershipmentioning

confidence: 99%

Corporate Governance of Banks: A Survey

Haan

Vlahu

2015

Journal of Economic Surveys

199

105

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“…Institutional and regulatory variables are found to have significant effect on performance of banks. Westman (2011) investigate the impact of ownership structure on banks' profitability in Europe. Results show that there is a positive association between profitability and management ownership for non-traditional banks, whereas positive association between profitability and board ownership is found in traditional banks.…”

Section: Introductionmentioning

confidence: 99%

Determinants of Bank Profitability: Empirical Evidence from Bangladesh

Rahman

Hamid²,

Khan³

2015

IJBM

103

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This study attempts to investigate capital strength, credit risk, ownership structure, bank size, non-interest income, cost efficiency, off-balance sheet activities, liquidity as potential bank specific determinants as well as growth in gross domestic products, inflation as potential macroeconomic determinants of bank profitability by taking 25 commercial banks from Bangladesh for a period ranges from 2006 to 2013. Three different measures of profitability namely return on assets (ROA), net interest margin over total assets (NIM) and return on equity (ROE) are used in the study. The empirical findings suggest that capital strength (both regulatory capital and equity capital) and loan intensity has positive and significant impact on profitability. Results also show that cost efficiency and off-balance sheet activities have negative and significant impact on bank profitability. The impact of other variables is not uniform in respect of different measures of profitability. Non-interest income, credit risk and GGDP are found as important determinant for NIM. Size has a positive and significant impact on ROA. Finally inflation has a negative and significant impact on ROA and ROE.

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“…Numerous studies show the importance of a coherent business strategy because of the key role such a strategy plays in all organisations (Huarng and Mas-Tur, 2015). Theories of market power and strategic management suggest that market structure and bank strategic The choice of strategy has implications for the market value of a bank (Westman, 2011). Numerous studies show the importance of a coherent business strategy because of the key role such a strategy plays in all organisations (Huarng and Mas-Tur, 2015).…”

Section: Introductionmentioning

confidence: 99%

Selection and comparison the most suitable strategy in the public and private banks with BSC approach

Parhizgar

Moghadam

2017

IJPQM

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Abstract:The banking crises, which have occurred both in transition economies and developing countries in the last ten years, have strengthened conviction about the importance of a stable and well regulated banking system. Therefore, choosing the right and suitable strategy is crucial for the performance improvement of the banks. The balanced scorecard (BSC) provides an enterprise view of an organisation's overall performance. The model of this study is tested on a sample of experts in a private bank, a semi-private bank and a state-owned bank in Iran. In this study, used for strategy and BSC measuring indexes were ranked in banking industry by using fuzzy analytic hierarchy process and fuzzy TOPSIS. Results show that among strategy banks in Iran, the brand reputation is more important. The results obtained from both methods indicate that private bank is more significant than semi-private bank and state-owned bank in banking.

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The impact of management and board ownership on profitability in banks with different strategies

Cited by 66 publications

References 102 publications

Corporate Governance of Banks: A Survey

Corporate Governance of Banks: A Survey

Determinants of Bank Profitability: Empirical Evidence from Bangladesh

Selection and comparison the most suitable strategy in the public and private banks with BSC approach

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