How loan portfolio diversification affects risk, efficiency and capitalization: A managerial behavior model for Austrian banks

Rossi, Stefania Patrizia Sonia; Schwaiger, Markus S.; Winkler, Gerhard

doi:10.1016/j.jbankfin.2009.05.022

Cited by 176 publications

(123 citation statements)

References 41 publications

(40 reference statements)

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“…Besides, it is confirmed that retail-oriented banks having an increase in share of non-interest income are more profitable and sustainable in the banking sector picture of the EU [33] because it helps them lower their dependence on traditional income and enlarge risk diversification. Although Rossi, Schwaiger and Winkler [34] find that diversification influences negatively on cost efficiency due to an increase in monitoring costs for individual client management by analyzing Austrian commercial banks over the 1997-2003 period, they also confirm its positive impact on reduction of realized risk because the monitor intensification in turn allows banks to choose a well-qualified loan portfolio to decrease risk. Moreover, it is found that banks having a rise in share of feebased revenue show better performance and stability in the banking sector picture of the GCC region [35], emerging economies [6,10,36] argue that together with cross border banking, income diversification benefits banks in Africa by enhancing their performance and leading to a decrease in insolvency risk.…”

Section: A Revenue Diversification and Financial Fragility Of Banksmentioning

confidence: 94%

Financial Fragility of Banks In Vietnam: The Role of Revenue Diversification and National Governance Quality

2018

EEHSS-18 June 10-11, 2018 Ho Chi Minh City (Vietnam)

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Abstract-This paper investigates the effects of revenue diversification and national governance quality on the financial fragility of 31 commercial banks in Vietnam over the period 2005 -2016. By using an unbalanced panel data and employing GMM estimator, this study"s empirical findings show that an increase in revenue diversification is associated with a rise in bank financial fragility. Meanwhile, a higher in national governance quality drives to lower in financial fragility of Vietnam banks. This study analyses further from the interaction between diversification and national governance quality indicators show that most indicators of Vietnam governance quality tend to play an important role in relationship between diversification and bank financial fragility.

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Section: A Revenue Diversification and Financial Fragility Of Banksmentioning

confidence: 94%

Financial Fragility of Banks In Vietnam: The Role of Revenue Diversification and National Governance Quality

2018

EEHSS-18 June 10-11, 2018 Ho Chi Minh City (Vietnam)

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“…Moreover, diversification of loan portfolio might be used as loans default risk mitigation strategies for MFIs as recommended by Moti et al (2012). Rossi et al (2009) found that despite the loan portfolio diversification strategy for the large Australian banks negatively affected the cost efficiency; it increased the profit efficiency, reduced the banks' risk and hence increased the banks' capital. David and Dionne (2005) found ISSN 2162-4860 2014 that due to practical complexities in diversifying loan portfolio in geographical locations and industries, the banks in Sweden didn't diversify the loan portfolio because it occurred naturally.…”

Section: Factors Influencing the Loan Portfolio Management In Bank Anmentioning

confidence: 99%

Effectiveness of Loan Portfolio Management in Rural SACCOS: Evidence from Tanzania

Magali

2014

Business and Economic Research

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This article uses 496 loans from ABC rural SACCOS located in the Northern zone of Tanzania to describe the effectiveness of loan's portfolio management. The data analysis is done by using the multivariate regression, descriptive and qualitative methods. The data for this study was collected at the end of May 2013. The findings reveal that women constituted 52.6% of the loan portfolio. Also the doubtful and bad loans were 51 and 31 million TZS which was more than 10% of the loan portfolio. The findings show loans were aged into 4 classes and the loans aging was not very effective because loans of different ages were classified in a single class. The results from the regression analysis reveal that the quality of loan portfolio was positively influenced by the loan size while the influence of gender and location of the borrowers were not significant. Moreover, ABC rural SACCOS used portfolio diversification, collateral, guarantors, letter from the village/ward government offices and the affidavit from the lawyer as credits risk mitigation techniques. The findings also revealed that fluctuation of the price of agricultural produce threatened the quality of loan portfolio. This article recommends that ABC rural SACCOS should seek the effective insurance services, use the effective software for loan portfolio management, search the market for agriculture produce, write off non repaid loans, enhance the repayment of overdue loans and revise the loan classes and maturity in order to improve the quality of the loan portfolio in the SACCOS.

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“…Existujú mnohé štúdie, ktoré sa snažia kvantifikovať podiel jednotlivých typov rizík na celkovom rizikovom profile bánk. Najvýznamnejšie riziko v bankovníctve je riziko úverové, kreditné, ktorého podiel na rizikovej expozícii slovenských a českých bánk je odhadované na 60-70 % (Půlpánová, 2007), s tendenciou zvyšovania podielu, nakoľko aktívne obchody (úvery) tvoria podstatnú časť portfólia aktív bánk (Rossi et al, 2009). Významný priestor prináleží aj riziku operačnému vo výške 20-30 %, do 10 % podľa týchto odhadov prislúcha pre trhové riziko (Půlpánová, 2007).…”

Section: úVodunclassified

“…Dohoda Bazilej II stanovila dva prístupy na meranie kreditného rizika: štandardizovaný prístup (využi-tie externých hodnotení externými ratingovými agentúrami) a prístup na základe interných ratingov (zá-kladný prístup IRB, pokročilý prístup IRB). Riadenie a meranie kreditného rizika prostredníctvom interného úverového ratingového alebo scoringového modelu banky je vždy nevyhnutným procesom pri poskytovaní úverov (Ross, 2008). Hodnotenie bonity klientov sa zameriava napr.…”

Section: Regulačný Rámec Rizika a Vplyv Implementácie Dohody Bazilej unclassified

Manažment kreditného rizika bánk v SR a riziká v kontexte globálnej krízy

Kiseľáková¹

2011

ER-CEREI

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This paper focuses on management and analysis of selected risks in bank sector in Slovakia in the context of global crisis. It provides us the analysis of implications of global crisis on bank sector and observes changes in bank behavior at the market from aspect of increase of credit risk. The first part of the paper is devoted to regulatory framework of risk and to effects of implementation of Basel II on changes in credit risk management. The main attention is paid to analysis of indicators of credit risk in Slovakia, dependence on selected risk factors and quantification of impacts through models of regression analysis. At the end of this paper we discuss the possibilities to improvement of the efficiency of risk management, reduction of risk and rules for regulation in the bank sector in EU.

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How loan portfolio diversification affects risk, efficiency and capitalization: A managerial behavior model for Austrian banks

Cited by 176 publications

References 41 publications

Financial Fragility of Banks In Vietnam: The Role of Revenue Diversification and National Governance Quality

Financial Fragility of Banks In Vietnam: The Role of Revenue Diversification and National Governance Quality

Effectiveness of Loan Portfolio Management in Rural SACCOS: Evidence from Tanzania

Manažment kreditného rizika bánk v SR a riziká v kontexte globálnej krízy

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