 An examination of diversification on bank profitability and insolvency risk in 28 financially liberalized marketsJames Nguyen, Richard Parsons and Bronson Argyle Journal of Behavioral and Experimental Finance, 2021, vol. 29, issue C Abstract: We seek to resolve the conflicts in the literature by examining the relationship between traditional and non-traditional banking profits, other determinants of bank profitability and the risk-return relationship of banks’ diversification into off-balance sheet activities for a group of commercial banks in twenty-eight countries for the period before and after the financial crisis. Our main finding is that there is a generally inverse relationship between traditional and nontraditional incomes. While noninterest income share enhances bank profits there is a significant negative effect of diversification into off-balance sheet activities on risk-adjusted profits in the period following the global financial crisis. These results have important implications on regulatory and business policies. Keywords: Net interest margin; Non-interest income; Insolvency risk; Bank profitability (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:29:y:2021:i:c:s2214635020303439 DOI: 10.1016/j.jbef.2020.100416 Access Statistics for this article Journal of Behavioral and Experimental Finance is currently edited by Michael Dowling and Jürgen Huber More articles in Journal of Behavioral and Experimental Finance from Elsevier |
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