Income Diversification and Bank Performance: Does Bank Size Matter? Empirical Evidence from African Banking Sector

Benjakik, Sofia; Habba, Badr

doi:10.7176/rjfa/12-16-03

Cited by 4 publications

(1 citation statement)

References 44 publications

(86 reference statements)

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“…Size refers to the size of a specific bank in relation to the entire banking industry (Hamdi et al, 2017). Large banks have a competitive edge in terms of better information technology, market power, human capital, capital market access and lower intermediation and funding costs (Benjakik and Habba, 2021). They are characterized by economies of scale and scope (Adusei, 2015).…”

Section: Empirical Literature and Hypothesis Developmentmentioning

confidence: 99%

Determinants of income diversification: empirical evidence from Indian banks

Thakur,

Arora

2023

IJLMA

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Purpose This study aims to explore the determinants (bank-specific, industry-specific and macroeconomic) of income diversification across interest income and non-interest income as well as for non-traditional income sources (non-interest income) from 2004–2005 to 2021–2022. Design/methodology/approach An unbalanced data set comprising 110 Indian commercial banks with 1480 observations is sampled in this study. Because of the bounded nature of the dependent variables (proxies of income diversification), the panel Tobit regression model is used. Findings The findings reveal that income diversification is positively influenced by bank size, technological advancements, cost–income ratio, return on assets, market competition and inflation in the economy. However, the decision to diversify income sources is adversely impacted by the capital ratio, GDP and financial intermediation ratio. Moreover, factors such as asset quality (loan loss provisions) and liquidity ratio do not directly influence the diversification strategies in the Indian banking industry. Practical implications The present study uses an extensive set of variables to provide insights into key factors for bank managers, regulators and policymakers to consider before developing diversification strategies. Originality/value To the best of the authors’ knowledge, this is the first study to examine the various bank-specific and macroeconomic determinants that affect income diversification in the Indian banking sector. The current study also investigates new variables such as technological advancements and a market concentration index for measuring competition, which have not been investigated in existing literature concerning bank income diversification in the Indian context.

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Section: Empirical Literature and Hypothesis Developmentmentioning

confidence: 99%

Determinants of income diversification: empirical evidence from Indian banks

Thakur,

Arora

2023

IJLMA

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Risk governance and financial stability of Islamic banks: A systematic literature review

Marnouch,

El Khamlichi

2024

CBSR

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The objective of this study is to identify studies that have addressed the impact of risk governance on the financial stability of Islamic banks. This study applied the preferred reporting items for systematic reviews and meta-analyses (PRISMA) method to identify and collect all studies that have addressed the impact of risk governance on the financial stability of Islamic banks. We worked only on articles published between 2000 and 2022. We found a wealth of literature on risk governance and financial stability. Our results identified 80 articles out of a total of 301 considered relevant to our analysis. Our results show that risk governance and financial stability are analyzed separately by researchers, and most researchers have analyzed the impact of risk governance on the performance of conventional, and Islamic banks. Battaglia et al. (2014), Jallali and Zoghlami (2022), and Raouf and Ahmed (2022) are among the researchers who have analyzed the impact of risk governance on financial stability. This study is the first to carry out a systematic review of the literature on the impact of risk governance on the financial stability of Islamic banks. It could be useful for future academic studies and researchers in this field.

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Impact of risk governance on performance and capital requirements: Evidence from Egyptian banks

Ismail

Ahmed

2022

COC

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This study aims to examine the impact of banks’ risk governance (RG) on Egyptian listed banks’ performance and capital requirements as prescribed in Basel regulations. Secondary data from annual reports of all twelve banks listed on the Egyptian Stock Market (EGX) over eleven years (2010–2020) are analyzed using the dynamic ordinary least squares method; where the RG framework is presented by the proxy of the presence of chief risk officer (CRO), risk committee (RC), and audit committee (AC) characteristics. Secondary data from annual reports of all twelve banks listed on the EGX over eleven years are analyzed using the dynamic ordinary least squares method. The results support the role of banks’ RG in improving banks’ both market-based and accounting-based performance. These findings support the importance of having an independent risk committee and a powerful CRO because they can regulate banks’ increasing risk and acquire the advantages of capital requirements by investing assets in more profitable ways with low risk. This paper is one of the few empirical attempts in emerging economics to link bank RG, risk-taking behavior, performance, and capital adequacy ratio (CAR) as defined by Basel III.

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Income Diversification and Bank Performance: Does Bank Size Matter? Empirical Evidence from African Banking Sector

Cited by 4 publications

References 44 publications

Determinants of income diversification: empirical evidence from Indian banks

Determinants of income diversification: empirical evidence from Indian banks

Risk governance and financial stability of Islamic banks: A systematic literature review

Impact of risk governance on performance and capital requirements: Evidence from Egyptian banks

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