Breaking The Bank A Probabilistic Assessment Of Euro Area Bank Profitability

Author : Selim Elekdag,Sheheryar Malik,Ms.Srobona Mitra
Publisher : International Monetary Fund
Page : 38 pages
File Size : 46,7 Mb
Release : 2019-11-22
Category : Business & Economics
ISBN : 9781513522258

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Breaking the Bank? A Probabilistic Assessment of Euro Area Bank Profitability by Selim Elekdag,Sheheryar Malik,Ms.Srobona Mitra Pdf

This paper explores the determinants of profitability across large euro area banks using a novel approach based on conditional profitability distributions. Real GDP growth and the NPL ratio are shown to be the most reliable determinants of bank profitability. However, the estimated conditional distributions reveal that, while higher growth would raise profits on average, a large swath of banks would most likely continue to struggle even amid a strong economic recovery. Therefore, for some banks, a determined reduction in NPLs combined with cost efficiency improvements and customized changes to their business models appears to be the most promising strategy for durably raising profitability.

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 94 pages
File Size : 40,7 Mb
Release : 2018-07-19
Category : Business & Economics
ISBN : 9781484369586

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Euro Area Policies by International Monetary Fund. Monetary and Capital Markets Department Pdf

This technical note consists of five chapters focusing on various aspects of systemic risk analysis across the euro area financial system. The chapters cover bank profitability, balance sheet- and market-based interconnected analysis, contingent claims analysis, and a brief discussion of data gaps in the nonbank, non-insurance (NBNI) financial sector. The ongoing economic recovery will support euro area bank profitability in general, but it is unlikely to resolve the structural challenges faced by the least profitable banks despite some recent improvements. This is important because persistently weak bank profitability is a systemic financial stability concern. Empirical analysis of 109 major euro area banks over 2007–2016 reveals that real GDP growth and the NPL ratio are the most reliable determinants of profitability, after accounting for other factors. Although higher growth would raise profits, a large swath of banks with the weakest profitability would most likely continue to struggle even with a robust recovery. Therefore, banks should take advantage of the current upswing by resolutely addressing their NPL stocks—such a strategy holds the most promise for weak banks’ profitability prospects.

Author : Nguyen, Duc K.
Publisher : Edward Elgar Publishing
Page : 867 pages
File Size : 50,6 Mb
Release : 2022-10-14
Category : Business & Economics
ISBN : 9781800880900

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Handbook of Banking and Finance in Emerging Markets by Nguyen, Duc K. Pdf

Emerging markets are increasingly facing significant challenges, from a slowdown in productivity, rising debt, and trade tensions to the adverse effects of proliferating global uncertainty on domestic financial systems. This incisive Handbook examines the ongoing dynamics of global financial markets and institutions within the context of such rising uncertainty and provides a comprehensive overview of innovative models in banking and finance.

Author : Mr.Shekhar Aiyar,Mai Chi Dao,Mr.Andreas A. Jobst,Ms.Aiko Mineshima,Ms.Srobona Mitra,Mahmood Pradhan
Publisher : International Monetary Fund
Page : 114 pages
File Size : 55,7 Mb
Release : 2021-03-26
Category : Business & Economics
ISBN : 9781513572772

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COVID-19: How Will European Banks Fare? by Mr.Shekhar Aiyar,Mai Chi Dao,Mr.Andreas A. Jobst,Ms.Aiko Mineshima,Ms.Srobona Mitra,Mahmood Pradhan Pdf

This paper evaluates the impact of the crisis on European banks’ capital under a range of macroeconomic scenarios, using granular data on the size and riskiness of sectoral exposures. The analysis incorporates the important role of pandemic-related policy support, including not only regulatory relief for banks, but also policies to support businesses and households, which act to shield the financial sector from the real economic shock.

Author : Sami Ben Naceur,Bertrand Candelon,Mr. Selim A Elekdag,Drilona Emrullahu
Publisher : International Monetary Fund
Page : 64 pages
File Size : 45,8 Mb
Release : 2023-11-17
Category : Business & Economics
ISBN : 9798400258107

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Is FinTech Eating the Bank's Lunch? by Sami Ben Naceur,Bertrand Candelon,Mr. Selim A Elekdag,Drilona Emrullahu Pdf

This paper examines how the growing presence of FinTech firms affects the performance of traditional financial institutions. The findings point to a negative impact on profitability, primarily due to a reduction in interest income and a rise in operational costs. Although established financial institutions have tried to diversify their revenue streams, these efforts have proven inadequate to offset the losses associated with increased competition from FinTech firms. Our study also reveals that various FinTech business models, such as Peer-to-Peer (P2P) lending and Balance Sheet lending, have varying effects on financial institutions. Cooperative banks experience more significant profit deterioration under both models, whereas (larger) commercial banks appear to benefit from partnerships with P2P platforms, as evidenced by an increase in non-interest income. Furthermore, the findings suggest that FinTech presence has a disproportionately larger adverse effect on banks in countries with more competitive, profitable, and developed financial systems. Interestingly, however, traditional financial institutions in countries with stronger regulatory frameworks appear to benefit from the expanding influence of FinTech firms.

Author : Siska Noviaristanti
Publisher : CRC Press
Page : 272 pages
File Size : 51,8 Mb
Release : 2021-11-24
Category : Technology & Engineering
ISBN : 9781000473230

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Contemporary Research on Business and Management by Siska Noviaristanti Pdf

This book contains selected papers presented at the 4th International Seminar of Contemporary Research on Business and Management (ISCRBM 2020), which was organized by the Alliance of Indonesian Master of Management Program (APMMI) and held in Surubaya, Indonesia, 25-27 November 2020. It was hosted by the Master of Management Program Indonesia University and co-hosts Airlangga University, Sriwijaya University, Trunojoyo University of Madura, and Telkom University, and supported by Telkom Indonesia and Triputra. The seminar aimed to provide a forum for leading scholars, academics, researchers, and practitioners in business and management area to reflect on current issues, challenges and opportunities, and to share the latest innovative research and best practice. This seminar brought together participants to exchange ideas on the future development of management disciplines: human resources, marketing, operations, finance, strategic management and entrepreneurship.

Author : Alexander Karminsky
Publisher : Springer Nature
Page : 347 pages
File Size : 40,8 Mb
Release : 2024-07-01
Category : Electronic
ISBN : 9783031548093

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Systemic Financial Risk by Alexander Karminsky Pdf

Author : João Leitão,Vanessa Ratten,Vitor Braga
Publisher : Springer Nature
Page : 194 pages
File Size : 43,6 Mb
Release : 2021-09-29
Category : Business & Economics
ISBN : 9783030807337

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Tourism Innovation in Spain and Portugal by João Leitão,Vanessa Ratten,Vitor Braga Pdf

Tourism is one of the sectors that have undergone substantial change for several decades and in particular due to the restrictions and change in national and international policies since the beginning of the COVID-19 pandemic. This book focuses on how tourism has been innovative, especially in light of these changes, by providing new and novel ways of introducing change into the marketplace. The book focuses on Spain and Portugal, thereby offering an interesting perspective as to how the Iberian Peninsula has adapted based on the new market conditions. This book is the first to focus specifically on these countries and offers an economic geography perspective on tourism innovation. This will provide useful and practical information about how a region has hurt but also thrived in times of global turmoil.

Author : Nombulelo Gumata,Eliphas Ndou
Publisher : Springer Nature
Page : 382 pages
File Size : 47,5 Mb
Release : 2020-11-10
Category : Business & Economics
ISBN : 9783030551483

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The Secular Decline of the South African Manufacturing Sector by Nombulelo Gumata,Eliphas Ndou Pdf

This book examines the global and domestic factors that have influenced the decline of South African manufacturing. Quantitative and econometric techniques are used to analyse the macroeconomic conditions that derive improved performance within the manufacturing sector. Empirical evidence is used to set out policy recommendations that would allow the South African National Development Plan to meet its objectives. This books aims to bring together analysis of industrial policy, competition policy, and merger remedies to produce a framework on how to preserve a competitive environment and support output, investment, and employment growth. It is relevant to those interested in African, development, and labour economics.

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 46 pages
File Size : 54,9 Mb
Release : 2022-08-16
Category : Business & Economics
ISBN : 9798400218118

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Germany by International Monetary Fund. Monetary and Capital Markets Department Pdf

German bank profitability is low by international standards. Although German banks rank more favorably in risk-adjusted terms, as low profitability is partially compensated by lower volatility of returns, their profitability ratios remain low. On other measures (such as returns on assets, equity, and risk-weighted assets), German banks, on aggregate, rank among the least profitable in Europe. Several factors affect bank profitability, including a complex tiered industry structure with barriers to entry and an explicit mandate of a large part of the banking system – cooperative and savings banks – to maximize welfare of stakeholders rather than profits.

Author : Cheng-Few Lee,Min-Teh Yu
Publisher : Emerald Group Publishing
Page : 313 pages
File Size : 55,7 Mb
Release : 2023-05-01
Category : Business & Economics
ISBN : 9781803824017

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Advances in Pacific Basin Business, Economics and Finance by Cheng-Few Lee,Min-Teh Yu Pdf

Advances in Pacific Basin Business, Economics and Finance (APBBEF) is an annual series designed to focus on interdisciplinary research in finance, economics, and management among Pacific Rim countries.

Author : Asl? Demirgüç-Kunt,Harry Huizinga
Publisher : World Bank Publications
Page : 52 pages
File Size : 45,9 Mb
Release : 1998
Category : Bancos comerciales
ISBN : 8210379456XXX

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Determinants of Commercial Bank Interest Margins and Profitability by Asl? Demirgüç-Kunt,Harry Huizinga Pdf

March 1998 Differences in interest margins reflect differences in bank characteristics, macroeconomic conditions, existing financial structure and taxation, regulation, and other institutional factors. Using bank data for 80 countries for 1988-95, Demirgüç-Kunt and Huizinga show that differences in interest margins and bank profitability reflect various determinants: * Bank characteristics. * Macroeconomic conditions. * Explicit and implicit bank taxes. * Regulation of deposit insurance. * General financial structure. * Several underlying legal and institutional indicators. Controlling for differences in bank activity, leverage, and the macroeconomic environment, they find (among other things) that: * Banks in countries with a more competitive banking sector-where banking assets constitute a larger share of GDP-have smaller margins and are less profitable. The bank concentration ratio also affects bank profitability; larger banks tend to have higher margins. * Well-capitalized banks have higher net interest margins and are more profitable. This is consistent with the fact that banks with higher capital ratios have a lower cost of funding because of lower prospective bankruptcy costs. * Differences in a bank's activity mix affect spread and profitability. Banks with relatively high noninterest-earning assets are less profitable. Also, banks that rely largely on deposits for their funding are less profitable, as deposits require more branching and other expenses. Similarly, variations in overhead and other operating costs are reflected in variations in bank interest margins, as banks pass their operating costs (including the corporate tax burden) on to their depositors and lenders. * In developing countries foreign banks have greater margins and profits than domestic banks. In industrial countries, the opposite is true. * Macroeconomic factors also explain variation in interest margins. Inflation is associated with higher realized interest margins and greater profitability. Inflation brings higher costs-more transactions and generally more extensive branch networks-and also more income from bank float. Bank income increases more with inflation than bank costs do. * There is evidence that the corporate tax burden is fully passed on to bank customers in poor and rich countries alike. * Legal and institutional differences matter. Indicators of better contract enforcement, efficiency in the legal system, and lack of corruption are associated with lower realized interest margins and lower profitability. This paper-a product of the Development Research Group-is part of a larger effort in the group to study bank efficiency.

Author : Ms.TengTeng Xu,Kun Hu,Mr.Udaibir S Das
Publisher : International Monetary Fund
Page : 54 pages
File Size : 48,6 Mb
Release : 2019-01-11
Category : Business & Economics
ISBN : 9781484393802

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Bank Profitability and Financial Stability by Ms.TengTeng Xu,Kun Hu,Mr.Udaibir S Das Pdf

We analyze how bank profitability impacts financial stability from both theoretical and empirical perspectives. We first develop a theoretical model of the relationship between bank profitability and financial stability by exploring the role of non-interest income and retail-oriented business models. We then conduct panel regression analysis to examine the empirical determinants of bank risks and profitability, and how the level and the source of bank profitability affect risks for 431 publicly traded banks (U.S., advanced Europe, and GSIBs) from 2004 to 2017. Results reveal that profitability is negatively associated with both a bank’s contribution to systemic risk and its idiosyncratic risk, and an over-reliance on non-interest income, wholesale funding and leverage is associated with higher risks. Low competition is associated with low idiosyncratic risk but a high contribution to systemic risk. Lastly, the problem loans ratio and the cost-to-income ratio are found to be key factors that influence bank profitability. The paper’s findings suggest that policy makers should strive to better understand the source of bank profitability, especially where there is an over-reliance on market-based non-interest income, leverage, and wholesale funding.

Author : Mr. Dimitri G. Demekas
Publisher : International Monetary Fund
Page : 34 pages
File Size : 47,9 Mb
Release : 2015-06-30
Category : Business & Economics
ISBN : 9781513501536

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Designing Effective Macroprudential Stress Tests by Mr. Dimitri G. Demekas Pdf

Giving stress tests a macroprudential perspective requires (i) incorporating general equilibrium dimensions, so that the outcome of the test depends not only on the size of the shock and the buffers of individual institutions but also on their behavioral responses and their interactions with each other and with other economic agents; and (ii) focusing on the resilience of the system as a whole. Progress has been made toward the first goal: several models are now available that attempt to integrate solvency, liquidity, and other sources of risk and to capture some behavioral responses and feedback effects. But building models that measure correctly systemic risk and the contribution of individual institutions to it while, at the same time, relating the results to the established regulatory framework has proved more difficult. Looking forward, making macroprudential stress tests more effective would entail using a variety of analytical approaches and scenarios, integrating non-bank financial entities, and exploring the use of agent-based models. As well, macroprudential stress tests should not be used in isolation but be treated as complements to other tools and—crucially—be combined with microprudential perspectives.

Author : Gianni De Nicoló,John H. Boyd,Abu M. Jalal
Publisher : International Monetary Fund
Page : 42 pages
File Size : 40,5 Mb
Release : 2009-07
Category : Business & Economics
ISBN : IND:30000111481812

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Bank Competition, Risk and Asset Allocations by Gianni De Nicoló,John H. Boyd,Abu M. Jalal Pdf

We study a banking model in which banks invest in a riskless asset and compete in both deposit and risky loan markets. The model predicts that as competition increases, both loans and assets increase; however, the effect on the loans-to-assets ratio is ambiguous. Similarly, as competition increases, the probability of bank failure can either increase or decrease. We explore these predictions empirically using a cross-sectional sample of 2,500 U.S. banks in 2003, and a panel data set of about 2600 banks in 134 non-industrialized countries for the period 1993-2004. With both samples, we find that banks' probability of failure is negatively and significantly related to measures of competition, and that the loan-to-asset ratio is positively and significantly related to measures of competition. Furthermore, several loan loss measures commonly employed in the literature are negatively and significantly related to measures of bank competition. Thus, there is no evidence of a trade-off between bank competition and stability, and bank competition seems to foster banks' willingness to lend.