Bank performance in China: A Perspective from Bank efficiency, risk-taking and market competition

Fang, Jianchun; Lau, Chi Keung Marco; Lu, Zhou; Tan, Yong; Zhang, Hua

doi:10.1016/j.pacfin.2019.06.011

Cited by 91 publications

(81 citation statements)

References 32 publications

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“…With the process of the reform and opening-up, banks' operation mode has transferred from unification to diversification [30,31]. However, the banking industry was still monopolized by the government.…”

Section: Review Of the Chinese Banking Systemmentioning

confidence: 99%

Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

Haris

Yao

2019

Sustainability

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The purpose of this study is to determine and compare the relationship between intellectual capital (IC) and banks' performance in China and Pakistan. The data are acquired from listed banks in these two countries during 2010-2018. The Value Added Intellectual Coefficient (VAIC ™ ) method is applied as a measure of IC. The results show that capital employed efficiency (CEE) makes the highest contribution to bank performance in both countries. In addition, the profitability of listed Chinese banks is driven by structural capital efficiency (SCE), while human capital efficiency (HCE) positively affects bank profitability and productivity in Pakistan. In addition, we find that the lagged effect of IC has a positive impact on future bank profitability. This study supports greater investment in IC in order to further improve bank performance in emerging Asian markets.Sustainability 2019, 11, 6582 2 of 23 infrastructure, which can bring great facility for companies. Following this, for the ease of channelizing the business transactions, the Bank of China (BOC) commenced its first branch in 2017 in Karachi, the financial capital city of Pakistan. However, before this only the Industrial and Commercial Bank of China (ICBC) operated in Pakistan. Both ICBC and BOC are listed Chinese banks. China and Pakistan are emerging Asian financial markets with good neighborly relations and close cooperation [24]. In emerging markets, the financing and lending role of the banking sector is utmost important for ensuring a sustained economy [17].According to the World Bank, bank capital to assets ratio in China grows from 6.60% to 8.56%, while Pakistan witnesses a downward trend (see Figure 1). Although the nonperforming loans to total gross loans in Pakistan gradually declines over the period 2014-2017, this ratio in China is much lower than that in Pakistan (See Figure 2). Haneef et al. [25] concluded that nonperforming loans have an adverse effect on the performance of banks in Pakistan. These indicate that the Chinese banking industry is much healthier than the Pakistani banking industry, and Pakistani banks operate with relatively higher risk exposure. However, the Pakistani banking system is more open as many foreign banks operating in Pakistan compared to the Chinese banking system [26]. Recently, China has revised the Regulations on the Administration of Foreign-funded Banks to lower the threshold of establishing foreign branches in China, which can stimulate the vitality of banking sector and improve the competitiveness of Chinese and foreign financial institutions. The opening up of the Chinese banking sector will provide opportunities for Pakistani banks to establish their branches in China. Considering that the competition among banks will become severer with financial liberalization, banks will expand their operation in the international market [27]. It will require that banks fully utilize local resources to improve the competitiveness under different business environment. We choose these two countries for comparison, not ...

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Section: Review Of the Chinese Banking Systemmentioning

confidence: 99%

Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

Haris

Yao

2019

Sustainability

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“…Larger banks may also suffer from diseconomies of scale due to agency costs, administrative costs, and excessive overhead expenses [14]. Large size could negatively impact bank profitability: The large size is difficult to manage, it needs greater effort, and the resultant increase in the cost is likely to reduce bank profitability [18]. The coefficient of bank size was found to be negative and significant, suggesting a negative impact of bank size on profitability measures.…”

Section: Total Assets Earnings Growth Rate and Waccmentioning

confidence: 99%

The Impact of the Debt Ratio, Total Assets, and Earning Growth Rate on WACC: Evidence from Nepalese Commercial Banks

Budhathoki

Rai

2020

AJEBA

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This study examined the impact of the debt ratio, total assets, and earnings growth rate on banks’ WACC. This study employed bank scope data of twenty-eight commercial banks during the single period of 2018. Altogether, there were 28 observations were made in the study. The ordinary least squares model was used to analyze the data. The results indicated that two predictor variables debt ratio and total assets significantly affected the bank’s WACC. But the predictor variable earnings growth rate did not significantly affect banks’ WACC. The results of this study could help bankers and policymakers to take effective action to reduce banks’ WACC.

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“…Menurut (Abiola & Olausi, 2014) hal tersebut dapat terjadi akibat bank mengalihkan biaya gagal bayar kredit dalam bentuk bunga yang tinggi pada pinjaman ke nasabah yang lainnya. Sedangkan untuk hasil yang tidak signifikan sejalan dengan beberapa penelitian oleh Fang, Lau, Lu, Tan & Zhang (2019); Safitri* & Sudarsono (2018) dan Mokni & Rachdi (2014). Fang, Lau, Lu, Tan & Zhang (2019) memberikan hasil yang kontras di mana terdapat hubungan tidak signifikan antara risiko kredit dengan ROA dan NIM.…”

Section: Pengaruh Credit Risk Terhadap Kinerja Keuanganunclassified

Pengaruh Struktur Dan Konsentrasi Kepemilikan, Model Bank Pada Kinerja Perbankan

Dianitasari

Hersugondo

2020

Benefita

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This study aims to analyze the effect of banks model, the different types of ownership, and ownership concentration on bank financial performance. State ownership, domestic ownership and foreign ownersip were used as the ownership indicators and Return On Asset (ROA) ratio were used as the proxied of financial performance. The Population that was used in this research consisted of all conventional and islamic commercial banks which is listed in Directory of Indonesian Banking 2018 and published the financial statements during 2014-2019. After passed the purposive sampling method there were 94 banks obtained as samples. The data analysis technique used is descriptive statistic, classical assumption test and panel regression test with random effect model. The result of this research showed that banks model and state ownership have positively significant impact on ROA and foreign ownership has negatively significant impact while domestic ownership and ownership concentration have insignificantly impact on bank financial performance Penelitian ini memiliki tujuan yaitu untuk menganalisis pengaruh struktur kepemilikan bank yang terdiri dari kepemilikan pemerintah, domestik dan asing, lalu model bank dan konsentrasi kepemilikan terhadap kinerja keuangan perbankan. Kinerja keuangan tersebut diukur dengan rasio profitabilitas yang diproksikan dengan Return On Assets (ROA). Populasi penelitian yang digunakan adalah bank umum syariah dan konvensional di Indonesia yang terdapat pada daftar Direktori Perbankan tahun 2018. Penelitian ini menggunakan sejumlah 94 sampel dengan metode purposive sampling. Metode analisis yang digunakan pada penelitian ini adalah statistik deskriptif, uji asumsi klasik dan regresi data panel dengan model efek random. Hasil yang didapat pada penelitian ini menunjukkan bahwa model bank dan kepemilikan pemerintah berpengaruh positif signifikan terhadap ROA dan kepemilikan asing berpengaruh negatif signifikan, sedangkan kepemilikan domestik dan konsentrasi kepemilikan tidak berpengaruh signifikan terhadap kinerja bank.

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Bank performance in China: A Perspective from Bank efficiency, risk-taking and market competition

Cited by 91 publications

References 32 publications

Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

The Impact of the Debt Ratio, Total Assets, and Earning Growth Rate on WACC: Evidence from Nepalese Commercial Banks

Pengaruh Struktur Dan Konsentrasi Kepemilikan, Model Bank Pada Kinerja Perbankan

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