Profit, Cost and Scale Efficiency for Latin American Banks: Concentration-Performance Relationship

Tabak, Benjamin Miranda; Fazio, Dimas M.; Cajueiro, Daniel O.

doi:10.2139/ssrn.1864688

Cited by 8 publications

(8 citation statements)

References 33 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…However, discussing which banks are more effective, whether private or public, national or foreign, is a controversial subject and it is far from being exhausted. Ruiz Tabak and Cajueiro (2008) have listed several papers with conclusions similar to those by Tabak et al (2011), but also others with opposite conclusions. By way of example, the studies by Silva and Jorge Neto (2002) and Nakane and Weintraub (2005) point out the greater efficiency of private banks; in turn, according to Sensarma (2006) and Altunbas, Liub, Molyneuxc and Seth (2000), public banks are the most efficient.…”

Section: Empirical Studies On the Potential Effectsmentioning

confidence: 92%

“…The Basel Committee on Banking Supervision (2012) associates management gains with the stability of returns on capital. Tabak, Fazio and Cajueiro (2011), studying banks in Latin America, have concluded that they work at higher levels regarding cost efficiency than profit efficiency. Better cost management does not necessarily mean that they are getting the appropriate return.…”

Section: Empirical Studies On the Potential Effectsmentioning

confidence: 99%

See 1 more Smart Citation

Basileia III: Impacto para os Bancos no Brasil

Pinheiro

Savóia

Securato

2015

Rev. contab. finanç.

View full text Add to dashboard Cite

This article evaluates the potential impacts deriving from the change in required capital of banks in Brazil, with the implementation of Basel III. To do this, a sample of 58 banks was used, which accounts for 80% of the assets in the Brazilian National Financial System, according to the balance sheets of December 2012. The methodology adopted has simulated the need for regulatory capital that will be mandatory in the end of the transition period, in 2019, considering the continuity of risk-weighted assets (RWAs) contained in these balance sheets. Assuming that some banks will resort to the capital market to raise their capitalization level, the return on equity (ROE) for the previous three years was analyzed, compared to the cost of equity, estimated by the International Capital Asset Pricing Model (ICAPM). It was found that 23 institutions had some kind of noncompliance with the new regulatory capital, among them the 3 largest federal public banks. It was also observed that 39 banks have a ROE insufficient to attract new investors. The joint analysis of the adequacy of capital structure and the return level may identify occasional vulnerabilities. It is concluded that implementing Basel III in Brazil may increase the search for greater efficiency and profitability. In a future scenario, the Brazilian banking system may observe a wave of mergers and acquisitions and an increased number of initial public offerings (IPOs).

show abstract

Section: Empirical Studies On the Potential Effectsmentioning

confidence: 92%

Section: Empirical Studies On the Potential Effectsmentioning

confidence: 99%

Basileia III: Impacto para os Bancos no Brasil

Pinheiro

Savóia

Securato

2015

Rev. contab. finanç.

View full text Add to dashboard Cite

show abstract

“…In this way, the dependent variable is assigned a value of 1 when PBT ≤ 0; then, the additional independent variable (NPI) equals 1 when PBT ≥ 0 and equals the absolute value of PBT for banks with negative profits. A similar transformation is used by Tabak et al (2011) and Gaganis and Pasiouras (2013) to estimate bank efficiency. 6 6 Some early studies (e.g., Berger and Mester, 1997;Pasiouras et al, 2009) add a constant value to convert the non-positive value of profit before tax, the absolute value of minimum profit before tax plus one and add to original value: PBT+ (| PBT min |+1).…”

Section: Empirical Sfa Modelmentioning

confidence: 99%

Financial openness, risk and bank efficiency: Cross-country evidence

Luo

Tanna

Vita

2016

Journal of Financial Stability

109

View full text Add to dashboard Cite

This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. ABSTRACTThis paper assesses the interrelationship between financial openness, bank risk and bank profit efficiency using a cross-country sample of 2,007 commercial banks covering 140 countries over the period 1999-2011. To establish whether the impact of financial openness on both bank risk and profit efficiency occurs directly or through each one of the two bank characteristics (efficiency and risk, respectively), we begin our analysis by investigating the potential reverse Granger causality between profit efficiency and risk using a dynamic simultaneous model via system GMM estimation. We then account explicitly for the role of bank risk in the estimation of bank profit efficiency using stochastic frontier analysis, allowing for the influence of different measures of financial openness and risk alongside other control variables. Our results indicate that financial openness reduces bank profit efficiency directly, not through changes in bank risk. We also find that financial openness increases bank risk indirectly, through the decreased bank profit efficiency channel. JEL Classification: G21; F36; C23; C24

show abstract

“…If anything, standard measures of market power show that, at least in some countries, market power in loan and deposit markets has fallen over time (Williams, 2012). On the other hand, concentration in the banking industry does appear to impair cost-efficiency (Tabak, Fazio, and Cajueiro, 2011). Such inefficiencies can persist only if various factors prevent additional suppliers from entering the market.…”

mentioning

confidence: 99%

Ahorrar para desarrollarse: Cómo América Latina y el Caribe puede ahorrar más y mejor

Cavallo¹,

Serebrisky²,

Frisancho³

et al. 2016

View full text Add to dashboard Cite

Inter-American Development BankThis book is distributed under the terms of the Creative Commons AttributionNonCommercial-NoDerivatives 3.0 IGO license (http://creativecommons.org/ licenses/by-nc-nd/3.0/igo/) and may be reproduced with attribution to the Inter-American Development Bank (IDB) and for any non-commercial purpose. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license. Note that the link provided above includes additional terms and conditions of the license.The images or other third party material in this book are included in the work's Creative Commons license, unless indicated otherwise in the credit line; if such material is not included in the work's Creative Commons license and the respective action is not permitted by statutory regulation, users will need to obtain permission from the license holder to duplicate, adapt or reproduce the material. Open Access This work is distributed under a Creative Commons AttributionNonCommercial-NoDerivatives 3.0 IGO license (http://creativecommons.org/ licenses/by-nc-nd/3.0/igo/) and may be reproduced with attribution to the InterAmerican Development Bank (IDB) and for any non-commercial purpose. No derivative work is allowed. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license. Note that the link provided above includes additional terms and conditions of the license. The images or other third party material in this book are included in the work's Creative Commons license, unless indicated otherwise in the credit line; if such material is not included in the work's Creative Commons license and the respective action is not permitted by statutory regulation, users will need to obtain permission from the license holder to duplicate, adapt or reproduce the material. This work is subject to copyright. All commercial rights are reserved by the Inter-American Development Bank, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, ev...

show abstract

Profit, Cost and Scale Efficiency for Latin American Banks: Concentration-Performance Relationship

Cited by 8 publications

References 33 publications

Basileia III: Impacto para os Bancos no Brasil

Basileia III: Impacto para os Bancos no Brasil

Financial openness, risk and bank efficiency: Cross-country evidence

Ahorrar para desarrollarse: Cómo América Latina y el Caribe puede ahorrar más y mejor

Contact Info

Product

Resources

About