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

Mamatzakis, Emmanuel; Bermpei, Theodora

doi:10.1016/j.irfa.2014.07.012

Cited by 30 publications

(24 citation statements)

References 110 publications

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“…This disproportionate evolution between loans and deposits can lead to the deterioration of banks' liquidity. Our findings are in line with Cuong Ly (2015), Marozva (2015), Mamatzakis and Bermpei (2014).…”

Section: Non-interest Income and Risksupporting

confidence: 91%

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Diversification, bank performance and risk: have Tunisian banks adopted the new business model?

2017

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Background: The objective of this paper is threefold. First, we test the most important factors that determine the level of non-interest income for Tunisian banks. Second, we study the impact of non-interest income on banks' profitability measured by both return on assets (ROA) and return on equity (ROE). Finally, we investigate the relationship between non-interest income and the level of risk taking. Methods: To achieve this goal, we used annual data of 20 Tunisian banks during the period 2005-2012. In the empirical section we performed a Dynamic Panel Data model. Results: Empirical results indicate that the main determinants of non-interest income are: relative performance (RROA and RROE), bank size, loan specialization and new epayments channels, automatic teller machine (ATM) and credit cards). We also find that diversification increases bank performance for both ROA and ROE measures. Eventually, non-interest income appears to be negatively and significantly correlated with the effect on the level of risk. Conclusions: Tunisian banks are invited to more diversify their activities and do not focus only on the traditional activity. The noninterest income seems to be associated with a higher level of profitability and a lower risk.

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Section: Non-interest Income and Risksupporting

confidence: 91%

“…Consequently, the interest revenues decreased which leads to a decrease in the bank performance. Our results are in line with Cuong Ly (2015), Marozva (2015), Mamatzakis and Bermpei (2014).…”

Section: Diversification and Bank Performancesupporting

confidence: 89%

Diversification, bank performance and risk: have Tunisian banks adopted the new business model?

2017

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“…Using a sample of 575 listed and non-listed banks and based on the OLS regression, results indicate that there is no significant association between liquidity and probability of default in the long term. Mamatzakis and Bermpei (2014) examined the main factors that explain the bank performance in the G7 and the Switzerland. The sample is composed of 97 banks.…”

Section: Literature Reviewmentioning

confidence: 99%

Liquidity Risk and Bank Performance: An Empirical Test for Tunisian Banks

Hakimi

Zaghdoudi

2017

BER

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An important part of banking literature was interested in the relationship between credit risk and bank performance. However, only few studies investigated the association between liquidity risk and bank performance. The aim of this paper is to study the effect of liquidity risk on the Tunisian bank performance. To this end, we used a sample of 10 Tunisian banks over the period 1990-2013. By applying panel data method, precisely random effect regression, results show that liquidity risk decreases significantly Tunisian bank performance. Also, findings indicate that international financial crisis and inflation act negatively and significantly on bank performance.

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“…Zhang, Jiang, Qu, & Wang, 2013). Some studies found positive impact of profitability on risk (Mamatzakis & Bermpei, 2014;Naceur & Omran, 2011).…”

Section: Profitabilitymentioning

confidence: 99%

Factors affecting the Risk-taking Behavior of Commercial Banks in Bangladesh

Rahman

Uddin

Moudud‐Ul‐Huq

2015

AFA

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This study examines the capital regulation, profitability, bank size, liquidity, off-balance sheet activities, charter value, dividend payout ratio and macroeconomic variables as determinants of bank risk (credit risk and overall risk) by using information from 30 Bangladeshi commercial banks over a period of [2005][2006][2007][2008][2009][2010][2011][2012][2013]. We use Generalized Methods of Moments (GMM) in an unbalanced dynamic panel data framework. The empirical results show a negative relation between credit risk and capital regulation and a mixed relation between overall risk and capital regulation. We find a negative relation between credit risk and profitability and a positive relation between overall risk and profitability. The results also show that larger banks take higher credit and overall risk. It is also evident that off-balance sheet activities are positively related with both credit and overall risk. We also find that banks with high liquidity take more credit risk. Negative association is found between credit risk and charter value and mixed evidence is found on the relationship between charter value and overall risk. We also observe that dividend payout ratio is not an important factor of bank risk. With regard to the impact of macroeconomic variables we find no significant impact on risk. Finally we find that lagged risk is an important determinant of bank risk.

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

Cited by 30 publications

References 110 publications

Diversification, bank performance and risk: have Tunisian banks adopted the new business model?

Diversification, bank performance and risk: have Tunisian banks adopted the new business model?

Liquidity Risk and Bank Performance: An Empirical Test for Tunisian Banks

Factors affecting the Risk-taking Behavior of Commercial Banks in Bangladesh

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