Income Structure, Competitiveness, Profitability, and Risk: Evidence from Asian Banks

Pornchai Chunhachinda () and Li Li ()
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Pornchai Chunhachinda: Faculty of Commerce and Accounting, Thammasat University, 2 Prachan road, Bangkok 10200, Thailand
Li Li: School of Business, University of the Thai Chamber of Commerce, 126/1 Vibhavadee-Rangsit Road, Dindaeng, Bangkok 10400, Thailand

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2014, vol. 17, issue 03, 1-23

Abstract: This paper investigates the impact of Asian banks' income structure on competitiveness, profitability, and risk over the period 2005–2011. Exchange-listed commercial banks of eight Asian countries are included in the study sample. The cross-sectional regression results reveal that higher exposure of net non-interest income in Asian banks increases market risk and asset risk but lowers insolvency risk, ROA and ROE. On the other hand, higher exposure of net fees and commissions reduces return volatility, market risk, and asset risk but increases insolvency risk, ROA, and ROE. Further, exposure to trading and derivatives, along with other securities, tends to decrease banks' competitiveness.

Keywords: Income structure; competitiveness; profitability; risk; Asian bank; JEL Classifications: G2; JEL Classifications: G21 (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2014
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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DOI: 10.1142/S0219091514500155

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