The linkage between bank net interest margins and non-interest income: The case of the Cambodian Banking industry

Vithyea You

MPRA Paper from University Library of Munich, Germany

Abstract: This research paper studies the relationship between bank net interest margin (NIM) and non-interest income (NII) using Cambodian banking data. The research focuses on the contribution of the NII, which is the non-traditional banking activity, to the banking profitability. The analysis runs a three-stage least square system to handle the NIM and NII employing 28 banks data from 2004-2010. For the growing period, there is a trade-off between interest margin and non-interest income. It is argued that banks increase non-traditional activities associates with the reduction in net interest margin and vice-versa. This paper also finds that the non-traditional activities have positive causal effect on net interest margin in the post financial crisis period.

Keywords: Bank interest margin; non-interest income; Cambodian banking; bank risk (search for similar items in EconPapers)
JEL-codes: G2 G21 (search for similar items in EconPapers)
Date: 2014-06
New Economics Papers: this item is included in nep-ban, nep-eff and nep-sea
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https://mpra.ub.uni-muenchen.de/58230/1/MPRA_paper_58230.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/58521/3/MPRA_paper_58521.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:58230

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