Foreign versus domestic banks’ performance in the UK: a multicriteria approach

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Foreign versus domestic banks’ performance in the UK: a multicriteria approach

Author Info

K. Kosmidou ()
F. Pasiouras
M. Doumpos
C. Zopounidis

Additional information is available for the following registered author(s):

Fotios Pasiouras

Abstract

Although the banking sector in the UK is one of the most open and it is characterized by an increasing foreign bank presence, it remains relatively under-researched compared to studies for other countries. The objective of this paper is to investigate the performance of the UK banking sector focusing on the performance of the domestic banks as opposed to the performance of the foreign banks in order to test the hypothesis of higher performance of the domestic banks in a developed market. For this purpose, the UTADIS multicriteria methodology is employed to compare domestic and foreign banks’ performance over multiple criteria, such as profitability, liquidity, risk and efficiency, using a data sample covering 26 domestic and 32 foreign banks operating in the UK over the period 1998 to 2001. The results of the study, support the home advantage hypothesis, suggesting that the higher performance of domestic banks compared to foreign banks is also the case in the UK. The most important distinguishing performance factors between the two groups of banks are interest revenue to total earning assets, and profit before taxes to loans plus securities, which are higher for the domestic banks. Copyright Springer-Verlag Berlin/Heidelberg 2004

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Publisher Info
Article provided by Springer in its journal Computational Management Science.

Volume (Year): 1 (2004)
Issue (Month): 3 (October)
Pages: 329-343
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Handle: RePEc:spr:comgts:v:1:y:2004:i:3:p:329-343

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Kyriaki Kosmidou & Fotios Pasiouras & Angelos Tsaklanganos, 2005. "Factors influencing the profits and size of Greek banks operating abroad: a pooled time-series study," Applied Financial Economics, Taylor and Francis Journals, vol. 15(10), pages 731-738, June. [Downloadable!] (restricted)

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This page was last updated on 2009-12-10.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.