How Do Stock Markets Value Bank Diversification? Evidence from the Eurozone

Shaker Ahmed (), Laura Baselga-Pascual and Timothy King ()
Additional contact information
Shaker Ahmed: University of Surrey
Laura Baselga-Pascual: University of Deusto
Timothy King: University of Vaasa

Chapter Chapter 3 in Corporate Governance in the Banking and Financial Sector, 2025, pp 37-60 from Palgrave Macmillan

Abstract: Abstract We determine whether and how functional diversification affects the market-based long-term performance and risk profile of banks. Using a sample of listed banks from 11 Eurozone countries, we test the effects of revenue and asset diversification on bank franchise values and riskiness. Our results show that revenue diversification does not affect franchise values but does increase riskiness while concentration on loans does not affect riskiness but adversely affects franchise values.

Keywords: Functional diversification; Bank franchise value; Non-Banking activities; Revenue diversification; Idiosyncratic risk (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-031-83353-3_3

Ordering information: This item can be ordered from
http://www.palgrave.com/9783031833533

DOI: 10.1007/978-3-031-83353-3_3

Access Statistics for this chapter

More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().