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Measuring Shareholder Value Drivers in Banking

In: Shareholder Value in Banking

Author

Listed:
  • Franco Fiordelisi

    (University of Rome III)

  • Philip Molyneux

    (University of Wales)

Abstract

All stakeholders are dependent on each other for their success in the long term and managing to create sustained shareholder value is not a zero-sum game. Creating stable shareholder value requires an intense focus on delivering benefits to customers in the most efficient way, hiring and retaining a motivated workforce, maintaining excellent supplier relationships, and being a good corporate citizen in each of the local areas where the company has a presence. As such, several strategies have been developed since the 1990s to improve customer satisfaction that have included the redesign of productive and delivery services, the development of more flexible organisational structures, the introduction of incentive schemes that motivate banks’ human resources to act according to shareholders’ goals, etc. In Chapter 4, we identified four primary drivers that create shareholder value in banking. These relate to improved bank efficiency (cost efficiency, profit efficiency and productivity), enhanced customer satisfaction, optimising banks’ financial structure and developing an optimal mix of business activities.

Suggested Citation

  • Franco Fiordelisi & Philip Molyneux, 2006. "Measuring Shareholder Value Drivers in Banking," Palgrave Macmillan Studies in Banking and Financial Institutions, in: Shareholder Value in Banking, chapter 6, pages 194-255, Palgrave Macmillan.
  • Handle: RePEc:pal:pmschp:978-0-230-59592-7_6
    DOI: 10.1057/9780230595927_6
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    Cited by:

    1. Ivan Huljak & Reiner Martin & Diego Moccero, 2021. "Bank productivity in CESEE countries," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue Q2/21, pages 83-104.
    2. Ivan Huljak & Reiner Martin & Diego Moccero, 2022. "The productivity growth of euro area banks," Journal of Productivity Analysis, Springer, vol. 58(1), pages 15-33, August.

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