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Income Structure, Competitiveness, Profitability, and Risk: Evidence from Asian Banks

Author

Listed:
  • Pornchai Chunhachinda

    (Faculty of Commerce and Accounting, Thammasat University, 2 Prachan road, Bangkok 10200, Thailand)

  • Li Li

    (School of Business, University of the Thai Chamber of Commerce, 126/1 Vibhavadee-Rangsit Road, Dindaeng, Bangkok 10400, Thailand)

Abstract

This paper investigates the impact of Asian banks' income structure on competitiveness, profitability, and risk over the period 2005–2011. Exchange-listed commercial banks of eight Asian countries are included in the study sample. The cross-sectional regression results reveal that higher exposure of net non-interest income in Asian banks increases market risk and asset risk but lowers insolvency risk, ROA and ROE. On the other hand, higher exposure of net fees and commissions reduces return volatility, market risk, and asset risk but increases insolvency risk, ROA, and ROE. Further, exposure to trading and derivatives, along with other securities, tends to decrease banks' competitiveness.

Suggested Citation

  • Pornchai Chunhachinda & Li Li, 2014. "Income Structure, Competitiveness, Profitability, and Risk: Evidence from Asian Banks," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 17(03), pages 1-23.
    • Handle: RePEc:wsi:rpbfmp:v:17:y:2014:i:03:n:s0219091514500155
    DOI: 10.1142/S0219091514500155
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    Citations

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    Cited by:

    1. Wang, Chunyang & Lin, Yongjia, 2021. "Income diversification and bank risk in Asia Pacific," The North American Journal of Economics and Finance, Elsevier, vol. 57(C).
    2. Soon-Beng Chew & Jia Hong Chen & Ming Chou Hung & Teresa Wan Ying Lek, 2018. "Factors Affecting Export Competitiveness of Singapore’s Manufacturing Sector: A Regression Analysis," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 21(02), pages 1-11, June.
    3. Chunyang WANG & Yongjia LIN, 2018. "The Influence of Income Diversification on Operating Stability of the Chinese Commercial Banking Industry," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 29-41, September.

    More about this item

    Keywords

    Income structure; competitiveness; profitability; risk; Asian bank; JEL Classifications: G2; JEL Classifications: G21;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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