Profitability on Corporation Banks in ASEAN - Focusing Overseas Characteristics

Sang Soo Chae (), Jae Youn Lee () and Choong Lyol Lee ()

Asian Economic and Financial Review, 2020, vol. 10, issue 3, 352-366

Abstract: The economic role of the ASEAN region, which has high potential for growth is becoming important. In addition, financial asset inflow is increasing. Performance factors are influenced by corporate banks in ASEAN. We examined the factors that affect profitability. Institutions operate in various forms such as subsidiaries, branches, representative offices, and offices. In this case, banks below the branch were excluded for the form of corporations. Foreign banks in ASEAN need more investment than management of banking operation by result of LRGL in NIM. But this is not adopted in domestic banks, only in ROA. This means that domestic banks have a smaller impact of investment relative to foreign banks. The GDP of foreign banks in ASEAN have a positive effect in NIM instead of negative effect in ROA. The GDP of domestic banks in ASEAN have a positive effect in NIM with a weak effect in ROA. Therefore, the financial market of ASEAN is expanding as the difference between NIM and ROA increases according to the growth of economy in ASEAN. The financial market has expanded although transaction cost has increased with the global economy contraction.

Keywords: Foreign bank; Corporation; ASEAN; Profitability; NIM; ROA; Financial market. (search for similar items in EconPapers)
Date: 2020
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