The Performance of Domestic and Foreign Banks: The Case of Korea and the Asian Financial Crisis

Yongil Jeon and Stephen Miller
Additional contact information
Yongil Jeon: Central Michigan University

No 2002-28, Working papers from University of Connecticut, Department of Economics

Abstract: This paper considers the performance of banks, domestic and foreign, in Korea prior to, during, and immediately after the Asian financial crisis, examining how the profitability of those banks differed and identifying factors that explain why those differences existed. The performance of Korean banks deteriorated dramatically in 1998 with most banks recovering somewhat in 1999. Foreign banks did not experience the same negative effect on their returns on assets and equity as a rule. Several standard findings emerge. For example, equity to assets correlates positively with domestic, but not foreign, bank performance, as measured by the returns on assets and equity, even when the government recapitalized institutions that were performing quite badly. Also, foreign-currency deposits significantly and negatively correlate with domestic Korean bank performance, although only in the post-crisis period for regional banks. In sum, the domestic Korean banks suffered more severely from the Asian financial crisis than foreign banks.

Keywords: Asian financial crisis; Korean commercial banks; profitability (search for similar items in EconPapers)
JEL-codes: E44 G21 O16 O53 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2002-05
New Economics Papers: this item is included in nep-cfn, nep-eff and nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Forthcoming in Global Economic Review

Downloads: (external link)
https://media.economics.uconn.edu/working/2002-28.pdf Full text (application/pdf)

Related works:
Journal Article: Performance of Domestic and Foreign Banks: The Case of Korea and the Asian Financial Crisis (2005)
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:uct:uconnp:2002-28

Access Statistics for this paper

More papers in Working papers from University of Connecticut, Department of Economics University of Connecticut 365 Fairfield Way, Unit 1063 Storrs, CT 06269-1063. Contact information at EDIRC.
Bibliographic data for series maintained by Mark McConnel ().