Bank profitability and inflation: the case of China

Tan, Yong; Floros, Christos

doi:10.1108/01443581211274610

Cited by 195 publications

(172 citation statements)

References 57 publications

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“…For macro-economic determinants, a real gross domestic product (RGDP) has a negative and insignificant impact on return on assets (ROA). This result supports previous studies of Masood et al (2012) whereas inflation have a positive and insignificant effect on return on assets (ROA) supporting (Guru et al, 2002;Jiang, Tang, Law, & Sze, 2003;Pasiouras & Kosmidou, 2007;Sufian, 2009;García-Herrero, Gavilá, & Santabárbara, 2009;Tan & Floros, 2012) findings.…”

Section: Loans To Total Asset (Aqlt)supporting

confidence: 90%

“…They further concluded that Lebanese commercial banks have an insignificant impact on profitability. Tan and Floros (2012) identified the profitability of commercial banks in China over the sample period of 2003 to 2009 by using econometric techniques. Results presented by their investigation suggest that the bank size, non-traditional activity and taxation are negatively associated with banks' profitability, while Chinese banks are positively associated with high cost and high inflation rates.…”

Section: Literature Reviewmentioning

confidence: 99%

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Bank Profitability and its Determinants in Pakistan: A Panel Data Analysis after Financial Crisis

Ali¹

2016

JFER

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This study seeks to investigate the internal and external determinants of the Pakistani banking sector, specifically after the recent financial crisis of 2008. The sample data comprises total 26 banks, which include 17 conventional, 5 Islamic and 4 public banks. The selected sample covers the period of five years from 2009 to 2013. A balanced panel data regression model has been used and considered return on assets (ROA) and return on equity (ROE) as an alternative of bank's profitability. The results of the study suggest that bank's profitability is significantly affected by its internal determinants while external determinants are insignificant. The study found that operating efficiency, liquidity, non-performing loans to total assets and real GDP have a negative impact, whereas financial risk, gearing ratio, asset management, bank size, deposits, loans to total assets and inflation show positive impact on the asset side . On the other side, operating efficiency, gearing ratio, asset management, liquidity, deposits and real GDP have a positive impact, while financial risk, bank size, asset quality and inflation exert negative impact on the equity side. During the study period, our findings suggest that the Pakistan banking industry has managed well to avoid significant impact of external factors like inflation and GDP over profitability, however, efficient management is required to improve internal factors to be more profitable.

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Section: Loans To Total Asset (Aqlt)supporting

confidence: 90%

Section: Literature Reviewmentioning

confidence: 99%

Bank Profitability and its Determinants in Pakistan: A Panel Data Analysis after Financial Crisis

Ali¹

2016

JFER

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“…Perry (1992) observed that the extent to which inflation affects bank profitability depends on whether the inflation expectations are fully anticipated. More recently, Yong and Floros (2012) examined the effects of inflation on bank profitability, while controlling for comprehensive bank-specific and industry-specific variables. The positive relationship found between inflation and profitability in the Chinese banking sector reflects the fact that the inflation in China can be fully anticipated and the interest rates adjusted accordingly.…”

Section: Macroeconomic Factorsmentioning

confidence: 99%

Competitiveness and Determinants of Bank Profitability in Sub-Saharan Africa

Oino¹

2015

IJEF

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We analyse how competitive the banks in sub-Saharan Africa are and what determines their profitability. We use a panel data of 97 sub-Saharan African banks for the period from 2000 to 2012. Using recursive regression, there is no strong evidence to suggest a structural break. The findings indicate that on average banks have a 40% return on equity. The fixed effects indicate that both internal and external factors are influential in determining the profitability of the banks. Specifically, the cost-income ratio and capital ratio negatively and significantly influence profitability. Measuring revenue diversification with the Herfindahl-Hirschman index (HHI), the results indicate that the more diversified the bank is, the more profitable it is. On the other hand, we find that the coefficient of cyclical output almost doubles when the output exceeds its trend value. In contrast, when the output is below its trend, the coefficient of cyclical output is insignificant.

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“…It reflects how efficient the bank management is in operating at a low cost, thus a negative relationship is expected. However, others find a positive relationship which could be due to higher salaries paid to personnel which is reflected in improvements in productivity and therefore higher profitability (Tan & Floros, 2012b).…”

Section: Bank-specific Determinantsmentioning

confidence: 99%

“…Diversification leads to economies of scope which results in lower costs and higher profits (Tan & Floros, 2012b). …”

Section: Bank-specific Determinantsmentioning

confidence: 99%

Profitability of commercial banks revisited: new evidence from oil and non-oil exporting countries in the MENA region

Abdullah¹,

Tan

2017

Investment Management and Financial Innovations

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This paper investigates the determinants of commercial bank profitability in oil and non-oil countries of the Middle East and North Africa (MENA) region using data from 11 countries over the period [2004][2005][2006][2007][2008][2009][2010][2011][2012][2013][2014]. Since banks are under no obligation to fill reports to Bankscope database, irregular reporting banks are omitted from the sample and the model is re-estimated using only regular reporting banks, and a comparative analysis between total banks' sample and regular reporting banks' sample is provided. Using the two-step system GMM and fixed effects models, the results indicate that credit risk is negative and highly significant when irregular reporting banks are omitted from the sample, particularly in the non

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Bank profitability and inflation: the case of China

Cited by 195 publications

References 57 publications

Bank Profitability and its Determinants in Pakistan: A Panel Data Analysis after Financial Crisis

Bank Profitability and its Determinants in Pakistan: A Panel Data Analysis after Financial Crisis

Competitiveness and Determinants of Bank Profitability in Sub-Saharan Africa

Profitability of commercial banks revisited: new evidence from oil and non-oil exporting countries in the MENA region

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