Corporate Social Performance and Financial Performance Relationship in Banks: Sub-Industry and Cross-Cultural Perspective

Daszyńska-Żygadło, Karolina; Słoński, Tomasz; Dziadkowiec, Anna

doi:10.3846/jbem.2020.13892

Cited by 8 publications

(5 citation statements)

References 67 publications

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“…Further research can be aimed at identifying possible imbalances of interests of various participants in relations with the banking sector and developing proposals for eliminating imbalances, which should be reflected in the banking policy of [72]. In this regard, banks should develop corporate governance, since corporate governance has a positive effect on bank profitability [73], good corporate governance practices improve financial results [74]. The implementation of the principles of responsible banking in the policy of each individual bank will contribute to the sustainable development of the economy and society.…”

Section: Discussionmentioning

confidence: 99%

Banking Sector Profitability: Does Household Income Matter?

2022

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Household incomes, their level and dynamics are one of the factors that ensure the achievement of the Sustainable Development Goals. At the same time, stable development of the banking sector, which is impossible without steady earnings, determines economic growth, which also positively affects reaching the Sustainable Development Goals. The paper examines the impact of household income on the return on assets of the banking sector in Russia using annual time series from 2003 to 2019. The study was conducted using formalized economic and mathematical methods of analysis by linear regression with least squares tests on the significance of the model, with tests for redundancy of insignificant variables (Wald test), Ramsey test on the functionality of the model, White and Breusch Pagan test for heteroscedasticity (heterogeneity of observations) and multicollinearity by method of inflation factors, graphic method. The Multiple Linear Regression (MLR) model was used. The results show that (1) an increase in the growth rate of household income and deposits in the non-financial sector has a positive effect on the return on assets of the banking sector; (2) an increase in the growth rate of the price of Brent crude oil and non-performing loans negatively affect the dependent variable; and (3) the regions that have the greatest (positive and negative) impact on profitability of whole bank sector in Russia were identified. Increasing household incomes and eliminating inequality in the incomes of the population of different regions will have a positive impact not only on social well-being but will also provide the banking sector with the opportunity for profitable operation and create conditions for sustainable growth. Our conclusions are useful for the regulator and individual banks and can be taken into account when developing and implementing policies aimed at sustainable development.

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Section: Discussionmentioning

confidence: 99%

Banking Sector Profitability: Does Household Income Matter?

2022

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“…While the topic is widely described with regard to CSR issues, it is still rarely addressed in the area of ESG issues and has not yet been developed in the relatively new Green Deal approach. However, it is still possible to identify a relatively small number of publications addressing the links between the financial efficiency of institutions and the implementation of ESG measures, in which the environmental dimension is one of many analysed in the banking sector (Soana, 2011;Paulík et al, 2015;Huang et al, 2017;Daszyńska-Żygadło et al, 2021;Klimontowicz et al, 2021;Bose et al, 2021).…”

Section: Literature Reviewmentioning

confidence: 99%

Environmental responsibility of banks versus their financial efficiency. Evidence from the Warsaw Stock Exchange

Zabawa,

Łosiewicz-Dniestrzańska

2024

EiS

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The significance of our research is connected with the many regulations in the European Union concerning ESG issues. These documents are very often related to environmental aspects and concern banks as public trust entities. We focus on banks on the Warsaw Stock Exchange (WSE), which constitute the main part of the Polish banking sector. We examine the relationship between financial efficiency and environmental responsibility in the banking sector. We identified three objectives for our research: first: to assess financial efficiency in the banks under study, second: to assess eco-management in banks listed on the WSE, third: to investigate whether there is a relationship between environmental responsibility as an ESG element of banks and their financial efficiency. The above objectives correspond with the research hypothesis adopted: Among the banks analysed, there is a correlation between a bank's financial performance and the Bank Ecologisation Index (BEI-2). This study refers to the period 2019-2021 to show the influence of the Covid-19 pandemic. We adopt various research methods to measure the environmental responsibility of banks and to examine the relationship between ecological engagement and banks’ financial ratios. In our research, we use descriptive statistics, linear ordering methods, standardised sum methods, synthetic measures of development, box plots, and analysis of the financial and non-financial reports of the entities analysed. The paper consists of five parts: introduction, literature review and research goals, materials and methods, results and discussion, and conclusions. Our results show that among the banks analysed, there is no statistically significant correlation between financial results and the Bank Ecologisation Index (BEI-2). This may be due to the fact that, as a result of the economic instability caused by the COVID-19 pandemic, banks in Poland have slowed down their growth potential and investments in greening have shifted to the longer-term perspective.

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“…The results are surprisingly mixed. In certain cases, governance positively influences financial performance (Daszyńska-Żygadło et al, 2021;Esteban-Sanchez et al, 2017;Khattak, 2021) while in other instances, governance did not affect financial performance (Dragomir et al, 2022;La Torre et al, 2021;Shakil et al, 2019). Further, four studies found that governance only influenced certain aspects of bank financial performance, or paradoxically, was negatively associated with financial performance (Azmi et al, 2021;El Khoury et al, 2023;Menicucci & Paolucci, 2023;Rahi et al, 2021).…”

Section: Research On the Governance Quality -Financial Performance Ne...mentioning

confidence: 99%

“…This literature affirms a positive association between ALM and financial performance. Other studies have documented the relationship between bank governance quality and financial performance measures such as ROA or ROE, with mixed outcomes (Azmi et al, 2021;Daszyńska-Żygadło et al, 2021;Dragomir et al, 2022;El Khoury et al, 2023;Esteban-Sanchez et al, 2017;Khattak, 2021;La Torre et al, 2021;Rahi et al, 2021;Shakil et al, 2019). However, Fernandes et al (2018) observed that empirical research related to the nexus of bank governance quality and financial performance has ignored ALM.…”

Section: Introductionmentioning

confidence: 99%

The Relationship Between Asset-Liability Management and Governance Quality in the Banking Industry

Kaufinger,

Neuenschwander

2024

JAF

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This study investigates whether governance quality is associated with asset-liability management (ALM) within the US banking industry. Based on stewardship theory, we hypothesize that there ought to be a significant, positive association between bank governance quality and a strong balance sheet due to inherent fiduciary responsibility and internal controls associated with an ALM governance process. Due to endogeneity concerns, we employ two-stage least squares regression and examine the relationship between 10 ALM metrics and governance risk scores (a component of ESG quality scores) for a cross-sectional sample of 251 US publicly traded banks in 2022. The results suggest that corporate governance influences ALM, not vice-versa. However, contrary to our hypothesized direction, favorable governance quality is associated with weaker ALM metrics as the results indicate that there is an inverse relationship between governance quality and ALM. Even so, the results provide evidence that bank governance quality is associated with balance sheet management. The results should be of interest to bank executives, regulators, investors, and other stakeholders in the banking industry.

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Corporate Social Performance and Financial Performance Relationship in Banks: Sub-Industry and Cross-Cultural Perspective

Cited by 8 publications

References 67 publications

Banking Sector Profitability: Does Household Income Matter?

Banking Sector Profitability: Does Household Income Matter?

Environmental responsibility of banks versus their financial efficiency. Evidence from the Warsaw Stock Exchange

The Relationship Between Asset-Liability Management and Governance Quality in the Banking Industry

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