IDEAS home Printed from https://ideas.repec.org/a/rsg/littra/2017-008.html

Analysis of Income and Profitability Indicators in Banking Sectors During the Period 1995 – 2009: Post-communist vs. OECD Countries

Author

Listed:
  • AleÅ¡ Rod
  • Jonáš Rais

Abstract

This article presents an analysis of income and profitability indicators for the banking sectors of six post-communist countries and compares them with a group of eighteen OECD countries without a “communist†past. The analysis focuses on five relative indicators (interest income/fees and commissions income; fees and commissions/bank assets; interest income/bank assets; profit/assets; fees and commissions/non-interest income), which are subsequently controlled with macroeconomic indicators (GDP, interest rate and inflation) for the period 1995 – 2009. The results of the econometric model corresponded with three out of the five assumptions made about the effects of post-communism. However, only the hypothesis that post-communist countries used their assets for higher net income from fees and commissions is significantly verified. Discrepancies were explained by x-inefficiencies on the cost side and a constant pressure on revenue stream diversification, which is in accordance with scholarly literature.

Suggested Citation

  • AleÅ¡ Rod & Jonáš Rais, 2017. "Analysis of Income and Profitability Indicators in Banking Sectors During the Period 1995 – 2009: Post-communist vs. OECD Countries," Littera Scripta, VSTE, vol. 10(1), pages 102-116, May.
    • Handle: RePEc:rsg:littra:2017-008
    DOI: 10.36708/LS.2017.I01.008
    as

    Download full text from publisher

    File URL: https://littera-scripta.com/articles/analysis-of-income-and-profitability-indicators-in-banking-sectors-during-the-pe-07898233
    Download Restriction: no
    File URL: https://littera-scripta.com/api/v1/public/files/bf24ffe7-9531-4013-a5aa-7775dcc96bd4
    Download Restriction: no
    File URL: https://libkey.io/10.36708/LS.2017.I01.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Athanasoglou, Panayiotis P. & Brissimis, Sophocles N. & Delis, Matthaios D., 2008. "Bank-specific, industry-specific and macroeconomic determinants of bank profitability," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 18(2), pages 121-136, April.
    2. Ewa M. Nikiel & Timothy P. Opiela, 2002. "Customer Type And Bank Efficiency In Poland: Implications For Emerging Market Banking," Contemporary Economic Policy, Western Economic Association International, vol. 20(3), pages 255-271, July.
    3. Lepetit, Laetitia & Nys, Emmanuelle & Rous, Philippe & Tarazi, Amine, 2008. "Bank income structure and risk: An empirical analysis of European banks," Journal of Banking & Finance, Elsevier, vol. 32(8), pages 1452-1467, August.
    4. Ross Levine, 2012. "The Governance of Financial Regulation: Reform Lessons from the Recent Crisis," International Review of Finance, International Review of Finance Ltd., vol. 12(1), pages 39-56, March.
    5. Kraft, Evan & Tirtiroglu, Dogan, 1998. "Bank Efficiency in Croatia: A Stochastic-Frontier Analysis," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 282-300, June.
    6. Tennant, David & Sutherland, Richard, 2014. "What types of banks profit most from fees charged? A cross-country examination of bank-specific and country-level determinants," Journal of Banking & Finance, Elsevier, vol. 49(C), pages 178-190.
    7. Joon-Ho Hahm, 2008. "Determinants and Consequences of Non-Interest Income Diversification of Commercial Banks in OECD Countries," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 12(1), pages 3-31.
    8. Hannan, Timothy H., 2006. "Retail deposit fees and multimarket banking," Journal of Banking & Finance, Elsevier, vol. 30(9), pages 2561-2578, September.
    9. Tjaša Redek & Andrej Sušjan, 2005. "The Impact of Institutions on Economic Growth: The Case of Transition Economies," Journal of Economic Issues, Taylor & Francis Journals, vol. 39(4), pages 995-1027, December.
    10. Brandt, Loren & Li, Hongbin, 2003. "Bank discrimination in transition economies: ideology, information, or incentives?," Journal of Comparative Economics, Elsevier, vol. 31(3), pages 387-413, September.
    11. Hainz, Christa, 2003. "Bank competition and credit markets in transition economies," Journal of Comparative Economics, Elsevier, vol. 31(2), pages 223-245, June.
    12. Claude Lopez & Javier Reyes, 2009. "Stationary properties of the real interest rate and the per-capita consumption growth rate: empirical evidence for theoretical arguments," Applied Economics, Taylor & Francis Journals, vol. 41(13), pages 1643-1651.
    13. Pavel Dvorak & Jan Hanousek, 2009. "Paying for Banking Services: What Determines the Fees?," CERGE-EI Working Papers wp388, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    14. Hasan, Iftekhar & Marton, Katherin, 2003. "Development and efficiency of the banking sector in a transitional economy: Hungarian experience," Journal of Banking & Finance, Elsevier, vol. 27(12), pages 2249-2271, December.
    15. Fries, Steven & Taci, Anita, 2005. "Cost efficiency of banks in transition: Evidence from 289 banks in 15 post-communist countries," Journal of Banking & Finance, Elsevier, vol. 29(1), pages 55-81, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tigran Poghosyan & Arsen Poghosyan, 2010. "Foreign bank entry, bank efficiency and market power in Central and Eastern European Countries1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(3), pages 571-598, July.
    2. Gabriel Asaftei & Subal Kumbhakar, 2008. "Regulation and efficiency in transition: the case of Romanian banks," Journal of Regulatory Economics, Springer, vol. 33(3), pages 253-282, June.
    3. Emilia Klepczarek & Agata Szymańska & Agata Wieczorek, 2024. "The cost efficiency of Polish banks driven by the ownership structure. Does the ownership structure matter?," Bank i Kredyt, Narodowy Bank Polski, vol. 55(5), pages 575-602.
    4. G. Lanine & R. Vander Vennet, 2006. "Microeconomic determinants of acquisitions of Eastern European banks by Western European banks," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 06/414, Ghent University, Faculty of Economics and Business Administration.
    5. Shkendije Himaj, 2014. "Corporate Governance in Banks and its Impact on Risk and Performance: Review of Literature on the Selected Governance Mechanisms," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 3(3), pages 53-85.
    6. repec:onb:oenbwp:y::i:96:b:1 is not listed on IDEAS
    7. Bonin, John P. & Hasan, Iftekhar & Wachtel, Paul, 2005. "Bank performance, efficiency and ownership in transition countries," Journal of Banking & Finance, Elsevier, vol. 29(1), pages 31-53, January.
    8. Kiril Tochkov & Nikolay Nenovsky, 2009. "Efficiency of commercial banks in Bulgaria in the wake of EU accession," ICER Working Papers 21-2009, ICER - International Centre for Economic Research.
    9. Maoyong Cheng & Hong Zhao & Mingming Zhou, 2016. "The effects of foreign strategic investors on business models in China’s commercial banks: does ownership structure matter?," Applied Economics, Taylor & Francis Journals, vol. 48(58), pages 5676-5698, December.
    10. Lin, Xiaochi & Zhang, Yi, 2009. "Bank ownership reform and bank performance in China," Journal of Banking & Finance, Elsevier, vol. 33(1), pages 20-29, January.
    11. Kiril Tochkov & Nikolay Nenovsk, 2010. "Institutional Reforms, EU Accession, and Bank Efficiency: Evidence from Bulgaria," Working Papers 201005, Texas Christian University, Department of Economics.
    12. Subal Kumbhakar & Dan Wang, 2007. "Economic reforms, efficiency and productivity in Chinese banking," Journal of Regulatory Economics, Springer, vol. 32(2), pages 105-129, October.
    13. Cheng, Maoyong & Geng, Hongyan & Zhang, Junrui, 2016. "Chinese commercial banks: Benefits from foreign strategic investors?," Pacific-Basin Finance Journal, Elsevier, vol. 40(PA), pages 147-172.
    14. Marton Katherin & McCarthy Cornelia H, 2008. "From State to Foreign Ownership: The Banking Sector in Eastern and Central Europe," Global Economy Journal, De Gruyter, vol. 8(3), pages 1-16, September.
    15. Le, Phuong Thanh & Harvie, Charles & Arjomandi, Amir & Borthwick, James, 2019. "Financial liberalisation, bank ownership type and performance in a transition economy: The case of Vietnam," Pacific-Basin Finance Journal, Elsevier, vol. 57(C).
    16. repec:onb:oenbwp:y:2010:i:1:b:1 is not listed on IDEAS
    17. Kyj, Larissa & Isik, Ihsan, 2008. "Bank x-efficiency in Ukraine: An analysis of service characteristics and ownership," Journal of Economics and Business, Elsevier, vol. 60(4), pages 369-393.
    18. Béjaoui Rouissi, Raoudha, 2011. "Cost and profit efficiency of french commercial banks," MPRA Paper 34245, University Library of Munich, Germany.
    19. Mamatzakis, Emmanuel & Staikouras, Christos & Koutsomanoli-Filippaki, Anastasia, 2008. "Bank efficiency in the new European Union member states: Is there convergence?," International Review of Financial Analysis, Elsevier, vol. 17(5), pages 1156-1172, December.
    20. Emmanuel Mamatzakis & Theodora Bermpei, 2015. "The Effect of Corporate Governance on the Performance of US Investment Banks," Financial Markets, Institutions & Instruments, John Wiley & Sons, vol. 24(2-3), pages 191-239, May.
    21. Sarmiento, Miguel & Galán, Jorge E., 2014. "Heterogeneous effects of risk-taking on bank efficiency : a stochastic frontier model with random coefficients," DES - Working Papers. Statistics and Econometrics. WS ws142013, Universidad Carlos III de Madrid. Departamento de Estadística.
    22. repec:idn:journl:v:18:y:2015:i:3c:p:307-332 is not listed on IDEAS
    23. Valentin Toci & Iraj Hashi, 2013. "Intermediation Efficiency of Banks in South-East Europe," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 2(3), pages 1-20, July.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rsg:littra:2017-008. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Robin Kunju Mol Raj (email available below). General contact details of provider: https://littera-scripta.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.