Cost efficiency of the banking industry in the South Eastern European region

Staikouras, Christos; Mamatzakis, Emmanuel; Koutsomanoli‐Filippaki, Anastasia

doi:10.1016/j.intfin.2007.07.003

Cited by 96 publications

(89 citation statements)

References 24 publications

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“…This can be explained by the fact that a high output level generates a high total cost and an increase in profit. Similar results, especially for the cost function are reported by several recent studies (Lensink et al 2008;Staikouras et al, 2008). The coefficient α 1 of the price of the funds of the cost function is significant which cannot explain that high input prices lead to higher costs.…”

Section: 21-the Estimation Of the Results Of Cost And Profit Frontiersupporting

confidence: 87%

“…The first group calculates scores of cost and profit efficiency using the SFA. Some researches calculate only scores of cost efficiency: Staikouras et al (2008), Koutsomanoli-Filippaki et al (2009) and Fries and Taci (2005). Somme studies calculates both scores of cost and profit efficiency: Berger and Mester (1997) found a positive relationship between the ratio of capital adequacy and cost efficiency.…”

Section: Introductionmentioning

confidence: 99%

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The Determinants of Cost/Profit Efficiency of Islamic Banks Before, During and After the Subprime Crisis Using SFA Approach

Mghaieth

Khanchel

2015

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In this paper we estimate the determinants of cost and profit efficiency of Islamic banks using the stochastic frontier approach SFA. We use 62 Islamic banks in sixteen countries of the MENA and South-East Asia regions during the period [2004][2005][2006][2007][2008][2009][2010]. We compare the efficiency between Islamic banks during the subprime crisis phases. Moreover, we examine the variables specific to the banks which can explain the sources of inefficiency and those let us decline the scores of cost and profit efficiency on a specific number of variables (total assets, capital adequacy, profitability, credit risk, operational costs). Results reveal that, Islamic banks in our study are more efficient in the generation of the profits rather than in the control of the costs. Thus, only the total assets and the operational costs represent the determinants of cost efficiency of the Islamic banks. Finally, for the profit efficiency our results indicate that the Islamic banks with high equities and high ratio of profitability are efficient in terms of profit.

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Section: 21-the Estimation Of the Results Of Cost And Profit Frontiersupporting

confidence: 87%

Section: Introductionmentioning

confidence: 99%

The Determinants of Cost/Profit Efficiency of Islamic Banks Before, During and After the Subprime Crisis Using SFA Approach

Mghaieth

Khanchel

2015

ijafr

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“…We find a negative and significant (at the 5% level) relationship between liquidity and performance for banks within the low regime (high liquidity risk) as λ1 = -0.202. This result is consistent with the findings of Kwan (2003) and Staikouras et al (2008). On the other hand, the impact of liquidity on bank performance for the banks in the high regime is rather inconclusive as it is not significant, yet it takes a positive sign as in Athanasoglou et al (2008).…”

Section: [Insert Table 8 About Here]supporting

confidence: 90%

“…The negative relationship between liquidity and bank performance is supported by empirical evidence (Kwan, 2003;Staikouras et al, 2008;Pasiouras and Kosmidou, 2007). The first result supports the 'bad luck hypothesis' (H2) concerning the positive impact of liquidity on cost efficiency.…”

Section: Does the Impact Of Liquidity Differ For Investment Banks As supporting

confidence: 52%

“…Many studies find a direct positive relationship between a bank's liquidity ratio and its performance (Bourke, 1989;Demirguc-Kunt and Huizinga, 1999;Athanasoglou et al, 2008). Nonetheless, there are counterarguments: excess liquidity is accompanied by high storage costs (Kwan, 2003;Staikouras et al, 2008) and lower returns (Pasiouras and Kosmidou, 2007), suggesting that while liquid assets could decrease liquidity risk they could carry high costs that negatively affect bank performance.…”

Section: H1: Lower Default Risk Asserts a Positive Impact On Performamentioning

confidence: 99%

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What drives investment bank performance? The role of risk, liquidity and fees prior to and during the crisis

Mamatzakis

Bermpei

2014

International Review of Financial Analysis

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This paper examines factors that affect the performance of investment banks in the G7 and Switzerland. In particular, we focus on the role of risk, liquidity and investment banking fees. Panel analysis shows that those variables significantly impact upon performance as derived from stochastic frontier analysis (SFA). Given our sample also comprises the financial crisis, we further test for regimes switches using dynamic panel threshold analysis. Results show different underlying regimes, in particular over the financial crisis. In addition, a strong positive effect of Z-Score on performance for banks in the regime of low default risk is reported, whilst fee-income ratio has also a positive impact for banks with low level of fees. On the other hand, liquidity exerts a negative impact. Notably, there is a clear trend of mobility of banks across the two identified threshold regimes with regards to risk a year before the financial crisis. Our results provide evidence that recent regulation reforms regarding capital adequacy and liquidity requirements are on the right track and could enhance performance.

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Bank efficiency in Vietnam: Do scale expansion strategies and non‐performing loans matter?

Šević

Ngo

2020

Int. J Fin Econ

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In Vietnam, following the process of financial liberalization, the rapid banking expansion has resulted in structural frangibility and bad debt proliferation with negative implication for bank performance. This is the first comprehensive study that evaluates the performance of the Vietnamese banking system at the start of the Global Financial Crisis in 2008 up to 2016. We show that the Vietnamese banking system experienced a downward trend in technical efficiency over the liberalization period. However, there persists an efficiency gap among banks with different ownership structure, suggesting that privatization matters for performance improvement. One of the major contributions is the analysis of the impact of non-performing loans on bank performance. We argue that this category of loans and bank size have nonlinear effects on the estimated efficiency levels. Medium-sized banks are more efficient than big and small banks. This finding implies that the ongoing restructuring scheme pushing banks' scale expansion via capital build-up should be carefully taken into consideration.

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Cost efficiency of the banking industry in the South Eastern European region

Cited by 96 publications

References 24 publications

The Determinants of Cost/Profit Efficiency of Islamic Banks Before, During and After the Subprime Crisis Using SFA Approach

The Determinants of Cost/Profit Efficiency of Islamic Banks Before, During and After the Subprime Crisis Using SFA Approach

What drives investment bank performance? The role of risk, liquidity and fees prior to and during the crisis

Bank efficiency in Vietnam: Do scale expansion strategies and non‐performing loans matter?

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