Does activity mix and funding strategy vary across ownership? Evidence from Indian banks
AbstractUsing data on Indian banks during 1996-2007, the paper examines the impact of bank activity and short-term funding for bank returns and risks. The findings indicate that larger, fast growing financial firms tend to have higher fee income shares. In addition, banks with greater reliance on fee income generating activities exhibit higher profitability. On the contrary, the impact of non-deposit funding share on bank profitability is weak. In terms of bank riskiness, the evidence is consistent with the conjecture that big, cost efficient and capitalized banks are less risky. As in case of bank profitability, there is limited evidence on any non-linear relationship between risk and fee incomes as also between risk and non-deposit funding share. Finally, the analysis supports the fact that foreign and de novo private banks exhibit lower risk as compared to old private banks.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 32070.
Date of creation: Jun 2009
Date of revision:
Publication status: Published in Atlantic Review of Economics 1.1(2011): pp. 1-33
Banking; Return on asset; Z-score; Fee income; Non-deposit funding; India;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lasse Heje Pederson & Markus K Brunnermeier, 2007.
"Market Liquidity and Funding Liquidity,"
FMG Discussion Papers, Financial Markets Group
dp580, Financial Markets Group.
- Markus K. Brunnermeier & Lasse Heje Pedersen, 2009. "Market Liquidity and Funding Liquidity," Review of Financial Studies, Society for Financial Studies, Society for Financial Studies, vol. 22(6), pages 2201-2238, June.
- Markus K. Brunnermeier & Lasse Heje Pedersen, 2007. "Market Liquidity and Funding Liquidity," NBER Working Papers 12939, National Bureau of Economic Research, Inc.
- Brunnermeier, Markus K & Pedersen, Lasse Heje, 2007. "Market Liquidity and Funding Liquidity," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6179, C.E.P.R. Discussion Papers.
- Ghosh, Saibal, 2009. "Financial Deregulation and Profit Efficiency: A Non-parametric Analysis of Indian Banks," MPRA Paper 24292, University Library of Munich, Germany.
- Laeven, Luc & Levine, Ross, 2005.
"Is There a Diversification Discount in Financial Conglomerates?,"
CEPR Discussion Papers, C.E.P.R. Discussion Papers
5121, C.E.P.R. Discussion Papers.
- Laeven, Luc & Levine, Ross, 2007. "Is there a diversification discount in financial conglomerates?," Journal of Financial Economics, Elsevier, Elsevier, vol. 85(2), pages 331-367, August.
- Luc Laeven & Ross Levine, 2005. "Is There a Diversification Discount in Financial Conglomerates?," NBER Working Papers 11499, National Bureau of Economic Research, Inc.
- Laeven, Luc & Levine, Ross, 2009.
"Bank governance, regulation and risk taking,"
Journal of Financial Economics, Elsevier,
Elsevier, vol. 93(2), pages 259-275, August.
- MÂª Jesus Santa Maria Beneyto & Jose Miguel Giner Perez & Antonio Fuster Olivares, 2005. "The Industry Location In Spain - New Methods For Measuring Industrial Agglomeration," ERSA conference papers ersa05p492, European Regional Science Association.
- Berlin, Mitchell & Mester, Loretta J, 1999.
"Deposits and Relationship Lending,"
Review of Financial Studies, Society for Financial Studies,
Society for Financial Studies, vol. 12(3), pages 579-607.
- Cornett, Marcia Millon & McNutt, Jamie John & Strahan, Philip E. & Tehranian, Hassan, 2011. "Liquidity risk management and credit supply in the financial crisis," Journal of Financial Economics, Elsevier, Elsevier, vol. 101(2), pages 297-312, August.
- Rajan, Raghuram G., 2013.
"The Credit Crisis and Cycle-Proof Regulation,"
Federal Reserve Bank of St. Louis, issue Nov, pages 461-467.
- Calomiris, Charles W., 1999. "Building an incentive-compatible safety net," Journal of Banking & Finance, Elsevier, Elsevier, vol. 23(10), pages 1499-1519, October.
- Berger, Allen N. & Klapper, Leora F. & Martinez Peria, Maria Soledad & Zaidi, Rida, 2006.
"Bank ownership type and banking relationships,"
Policy Research Working Paper Series
3862, The World Bank.
- Cottarelli, Carlo & Dell'Ariccia, Giovanni & Vladkova-Hollar, Ivanna, 2005. "Early birds, late risers, and sleeping beauties: Bank credit growth to the private sector in Central and Eastern Europe and in the Balkans," Journal of Banking & Finance, Elsevier, Elsevier, vol. 29(1), pages 83-104, January.
- Tobias Adrian & Hyun Song Shin, 2009.
"Money, liquidity, and monetary policy,"
Staff Reports, Federal Reserve Bank of New York
360, Federal Reserve Bank of New York.
- Tobias Adrian & Hyun Song Shin, 2009. "Money, Liquidity, and Monetary Policy," American Economic Review, American Economic Association, American Economic Association, vol. 99(2), pages 600-605, May.
- Das, Abhiman & Ghosh, Saibal, 2006. "Financial deregulation and efficiency: An empirical analysis of Indian banks during the post reform period," Review of Financial Economics, Elsevier, Elsevier, vol. 15(3), pages 193-221.
- Rocco Huang & Lev Ratnovski, 2009. "Why Are Canadian Banks More Resilient?," IMF Working Papers 09/152, International Monetary Fund.
- Karl Lins & Henri Servaes, 1999. "International Evidence on the Value of Corporate Diversification," Journal of Finance, American Finance Association, American Finance Association, vol. 54(6), pages 2215-2239, December.
- Sapienza, Paola, 2004. "The effects of government ownership on bank lending," Journal of Financial Economics, Elsevier, Elsevier, vol. 72(2), pages 357-384, May.
- Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
- Dinc, I. Serdar, 2005. "Politicians and banks: Political influences on government-owned banks in emerging markets," Journal of Financial Economics, Elsevier, Elsevier, vol. 77(2), pages 453-479, August.
- Enrica Detragiache & Asli DemirgÃƒÂ¼ÃƒÂ§-Kunt, 1998.
"Financial Liberalization and Financial Fragility,"
IMF Working Papers
98/83, International Monetary Fund.
- Diamond, Douglas W, 1991. "Monitoring and Reputation: The Choice between Bank Loans and Directly Placed Debt," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(4), pages 689-721, August.
- Gianni De Nicolo, 2000. "Size, charter value and risk in banking: an international perspective," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 689, Board of Governors of the Federal Reserve System (U.S.).
- Fama, Eugene F., 1985. "What's different about banks?," Journal of Monetary Economics, Elsevier, Elsevier, vol. 15(1), pages 29-39, January.
- Patrick Honohan, 1997. "Banking system failures in developing and transition countries: Diagnosis and predictions," BIS Working Papers 39, Bank for International Settlements.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.