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Comparative analysis of the performance of Chinese Owned Banks’ in Hong Kong 2004–2010

Kevin Daly and Xiaoxi Zhang

Journal of Multinational Financial Management, 2014, vol. 27, issue C, 1-10

Abstract: This paper constructs a model of the performance of Chinese (Mainland) owned banks operating in Hong Kong, compared to Hong Kong (SAR) owned banks and Foreign owned banks. In general the proposed model performs well under diagnostic tests for net interest margin, non-interest expense, impaired loans ratio, equity multiplier and ownership structures. Profitability, as measured by return on assets (ROA) and return on equity (ROE) for Chinese owned banks increased over the period 2004–2010. Chinese owned banks recorded increased performance in terms of net interest margin and equity multiplier but decreased with respect to non-interest expense and impaired loans ratio. Banks having a license also appears to be a major contributor to banks profitability across HKSAR. Compared to foreign banks and local banks (Hong Kong SAR), we found that in general Chinese (Mainland) banks tend to perform poorly across a number of key banking performance indicators.

Keywords: Bank performance; China's financial outward investment; Chinese banks in Hong Kong (search for similar items in EconPapers)
JEL-codes: C33 C50 C80 F20 G21 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:27:y:2014:i:c:p:1-10

DOI: 10.1016/j.mulfin.2014.06.006

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