Diversification in Korean Banking Business: Is Non-interest Income a Financial Saviour?

Seungho Baek, Kwan Yong Lee, Jeong Wan Lee and Sunil Mohanty

Journal of Emerging Market Finance, 2018, vol. 17, issue 3_suppl, S299-S326

Abstract: This article examines whether the diversification of operating income in Korean banks has persistently enhanced the performance of Korean banks. The results show that, despite Korean banks’ efforts to diversify their operating income, these banks do not gain any benefit from the diversification. Thus, bank managers in Korea focus on interest income revenue. The results also show that the increase in non-interest income revenue keeps pace with the growth in expenses, which offsets the diversification effect on the performance of Korean banks. As a result, Korean banks discourage banking diversification and focus on non-interest income revenues. JEL Classification: G21

Keywords: Banking; non-interest income; diversification; risk (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:emffin:v:17:y:2018:i:3_suppl:p:s299-s326

DOI: 10.1177/0972652718798079

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