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

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

Professor of Finance.

and

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

Corresponding author.

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https://doi.org/10.1142/S0219091514500155Cited by:4 (Source: Crossref)

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.

Keywords:

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