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The Impact of Organizational Reform on the Operational Performance of Taiwan’s Commercial Bank: Assessment Using the Camels Rating System

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  • Liu Ying-Sing

    (Chaoyang University of Technology, Taiwan)

Abstract

This study analyzed the impact of organizational reform on the operational performance of commercial banks. Furthermore, it examined the long-term effectiveness of the organizational reforms carried out by financial holding companies in their commercial banks from the perspective of individual enterprises. A case study examines the results of organizational change driven by the Commercial Bank, the first listed financial holding company in Taiwan, since 2006 to strengthen organizational execution. The study period is from the first quarter of 2000 to the first quarter of 2024, for a total of 97 quarters. The CAMELS Rating System evaluated banks’ operating performance, considering the board size factor, the stability of key insider positions, the asset size, and the impact of major infectious disease events (SARS and COVID-19). Modeling analysis was performed via stepwise regression. The empirical results show that organizational reforms can have a significant effect on banks’ capital adequacy, asset quality, management quality, liquidity, and sensitivity to market risk. Therefore, it is believed that organizational reform has the effects of sound assets, management quality, and reduced operational risk for banks. Major infectious disease events have a significant and priori-tized impact on banks’ capital adequacy and sensitivity. Additionally, banks’ operational performance has asset- and board-size effects. Finally, the results of this study can provide a reference for the internal organizational reform of financial institutions after mergers and acquisitions in the future.

Suggested Citation

  • Liu Ying-Sing, 2025. "The Impact of Organizational Reform on the Operational Performance of Taiwan’s Commercial Bank: Assessment Using the Camels Rating System," Economics, Sciendo, vol. 13(2), pages 439-464.
    • Handle: RePEc:vrs:econom:v:13:y:2025:i:2:p:439-464:n:1023
    DOI: 10.2478/eoik-2025-0050
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    References listed on IDEAS

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    1. Qian Long Kweh & Wen-Min Lu & Kaoru Tone & Hsian-Ming Liu, 2024. "Evaluating the resource management and profitability efficiencies of US commercial banks from a dynamic network perspective," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 10(1), pages 1-20, December.
    2. Ihsan Isik & Daniel Folkinshteyn, 2017. "Bank Failures Under Managerial And Regulatory Inefficiency: Three Decades Of Evidence From Turkey," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 40(4), pages 479-506, December.
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    More about this item

    Keywords

    organizational reform; operational performance; assetsize effect; governance variables; major infectious disease events; CAMELS rating system;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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