 Bank diversification, performance and stock market response: Evidence from listed public banks in South Asian countriesPiyadasa Edirisuriya, Abeyratna Gunasekarage and Michael Dempsey Journal of Asian Economics, 2015, vol. 41, issue C, 69-85 Abstract: Our concern in the present paper is with the financial viability of banks in the recently liberalised economies of the South Asian region as they have diversified their revenue and assets bases. To this end, we examine how stock markets have responded to bank diversification in this region over the period start-1999 to end-2012. We find that when banks diversify from interest-only income, they achieve higher market-to-book valuations and improved solvency, but only up to a point, beyond which these performance indicators are negatively associated with higher levels of diversification. It appears that a continued diversification of assets bases away from traditional loan assets does not of itself imply an improved market performance. We explore these issues in the context of four South Asian countries (Bangladesh, India, Pakistan, and Sri Lanka). Keywords: South Asian countries; Financial deregulation; Stock markets; Listed public banks; Bank diversification (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:asieco:v:41:y:2015:i:c:p:69-85 DOI: 10.1016/j.asieco.2015.09.003 Access Statistics for this article Journal of Asian Economics is currently edited by C. Wiemer More articles in Journal of Asian Economics from Elsevier |
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