The Impact of Revenue Diversification on Bank Profitability and Stability: Empirical Evidence from South Asian Countries

Nisar, Shoaib; Peng, Ke; Wang, Susheng; Ashraf, Badar Nadeem

doi:10.3390/ijfs6020040

Cited by 83 publications

(90 citation statements)

References 49 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Arising from the empirical result, we therefore accept the null hypothesis (H02) that foreign exchange income has no significant positive effect on liquidity of Nigerian deposit money banks. This finding is in contrast with that of Nisar et al(2018) which found that other noninterest income exerts positive influence on performance of Asian Banks.…”

Section: Journal Of Accounting Finance and Auditing Studies 5/2 (201contrasting

confidence: 99%

“…The implication of the findings is that banks in Nigeria do not derive sufficient income from commission and any attempt by them to increase the revenue from this source may shift banks attention away from other veritable sources of income generation which will reduce the overall income of the bank and thus reduce the liquidity. This finding is in line with that of Nisar et al (2018)which found…”

Section: Journal Of Accounting Finance and Auditing Studies 5/2 (201supporting

confidence: 93%

See 1 more Smart Citation

Income Mix and Liquidity of Nigerian Deposit Money Banks: Evidence from Dynamic Panel Models

Sanyaolu¹,

Akintaro²,

Adebayo³

2019

jafas

View full text Add to dashboard Cite

Liquidity crunch is one of the greatest challenges that deposit money banks are confronted with which negatively affect their strength and stability and ultimately leading to collapse of some. Arising from this, the study focused on the "effect of income mix on liquidity of Nigerian deposit money banks."The study adopted an ex post facto research design, while ten out of all the listed banks were purposefully selected. The study obtained secondary data from the annual reports and accounts of the sampled banks from 2008 to 2017. Series of preliminary analyses involving descriptive and correlation analyses were conducted while generalized method of moment was employed in testing the hypotheses. The study found that all the variables of interest on income mix individually exhibit no significant effect on liquidity (P > 0.05), in effect, ratio of interest income, fee and commission income, foreign exchange income and other income were found to influence liquidity negatively while investment income was found to exert positive effect on liquidity. The study's conclusion arising from the findings is that income mix has significant positive joint effect on liquidity management. Arising from the conclusion, the study recommends that bank should keep diversifying their income base as such strategy significantly improves liquidity, while also improving on the interest income, fee and commission income, foreign exchange income and other income.

show abstract

Section: Journal Of Accounting Finance and Auditing Studies 5/2 (201contrasting

confidence: 99%

Section: Journal Of Accounting Finance and Auditing Studies 5/2 (201supporting

confidence: 93%

Income Mix and Liquidity of Nigerian Deposit Money Banks: Evidence from Dynamic Panel Models

Sanyaolu¹,

Akintaro²,

Adebayo³

2019

jafas

View full text Add to dashboard Cite

show abstract

“…Trading income (TRAD) has shown a negative relationship with risk, which is not consistent with [4,9,14]. Other non-interest income shows a positive relationship with risk, which is not consistent with [4,14,19].…”

Section: Resultsmentioning

confidence: 87%

“…The most recent research is conducted by Moudud-Ul-Huq, et al [16] support that the diversification of income benefits the bank by improving performance and reducing risks. The study [19] shows that non-interest income as a whole is reducing bank risk in South Asia. Diversification is important because it increases bank income and also decreases the possibility of such pressure as the bank crisis [7].…”

Section: Literature Reviewmentioning

confidence: 92%

Do service activity impact on the risk of Indonesian banking industry?

Friantina¹,

Ruhadi²,

Syarief³

2018

MATEC Web Conf.

View full text Add to dashboard Cite

The Indonesian banking industry has developed technology innovation will provide financial services to generate income. The purpose of this paper is to compare the service activity and to explore the effect of the service activity on risk in Islamic and conventional banks. By analyzing 12 Islamic banks and 38 conventional banks in Indonesia during the period from 2015 to 2017, we use Structural Equation Modelling (SEM) with path analysis and multiple group analysis. The result shows that the service activity of Islamic banks appears to be more variable than conventional banks. The risk level of Islamic banks is more stable than conventional banks. For Islamic banks, non-financing income has a significant negative effect on risk, commission income and trading income have a significant positive effect on risk, and other non-financing income has no effect on risk. However, no significant effect has been observed between non-interest income, commission income, trading income, other non-interest income and risk level in conventional banks. This finding indicates that the combination of funding activities, lending activities, and service activities allows Islamic banks to obtain the diversification income till reduce risks. For conventional banks, diversification in activities contributes to the higher volatility of bank revenue.

show abstract

“…Haidary and Abbey (2018) found that there was no influence between liquidity and ROA which indicated the number of bad loans illustrating that loans provided had less impact on bank income. Different results found by Nisar, Peng, Wang, and Ashraf (2018) and Al-Tamimi (2010), states that there is a positive and significant effect between liquidity and ROA which indicates the higher the amount of the loan, the higher the bank gets a profit in the form of credit interest. When banks have a lot of capital customers, they tend to make loans, thereby increasing bank profits.…”

Section: Liquiditymentioning

confidence: 79%

Determinants of Bank Performance in Indonesia

Usman

Lestari

2019

Minds

View full text Add to dashboard Cite

This study aims to examine the determinants of commercial banks’ performances in Indonesia in the period 2008-2017 by their return on assets. Capital adequacy, asset quality, management efficiency and liquidity, and gross domestic product functioned as the predictors. The sample of this study was 25 conventional banks meeting the criteria of the purposive sampling method. The panel data with Eviews shows that asset quality has a negative effect and management efficiency has a positive impact on bank performance. Capital adequacy, liquidity, and gross domestic product growth rate do not affect the bank's performance. Managers need to tighten lending, carry out credit restructuring and manage the balance between assets and liabilities and, supervise credit.

show abstract

The Impact of Revenue Diversification on Bank Profitability and Stability: Empirical Evidence from South Asian Countries

Cited by 83 publications

References 49 publications

Income Mix and Liquidity of Nigerian Deposit Money Banks: Evidence from Dynamic Panel Models

Income Mix and Liquidity of Nigerian Deposit Money Banks: Evidence from Dynamic Panel Models

Do service activity impact on the risk of Indonesian banking industry?

Determinants of Bank Performance in Indonesia

Contact Info

Product

Resources

About