Cost and profit efficiency of Chinese banks: A non-parametric analysis

Using a non-parametric technique for data from 1995 to 2004, we investigate the cost and profit efficiency of 28 Chinese commercial banks. We examine the influence of ownership type, size, risk profile, profitability and key environmental changes on the bank efficiency using a Tobit regression. Consistent with the existing literature, we find that profit efficiency levels are well below those of cost efficiency. This suggests that the most important inefficiencies are on the revenue side. Our findings are also consistent with prior evidence on ownership and efficiency: joint-stock banks (national and city-based), on average, appear to be more cost- and profit-efficient than state-owned banks while medium-sized banks are significantly more efficient than small and large banks. These and other results suggest the need for speedier reforms to open the banking market, improving risk management, minimizing the government's capital subsidy and diversifying ownership of Chinese banks.     

Capital Structure and Bank Performance: Empirical Evidence from Ghana

The aim of this paper is to examine the impact of capital structure on profitability of commercial banks in Ghana. The study used a sample of 21 commercial banks over the period 2000–2014 using panel corrected standard errors and two‐stage least‐squares estimation approaches. The results show that bank capital structure measured as capital‐to‐asset ratio is a robust and positive driver of bank performance (profitability) measures (return on assets and net interest margin). Additionally, the results further indicate that share of customer demand deposit positively affects bank profitability. The positive relationship between the capital‐to‐asset ratio and performance provides support for the bank capitalization policy implemented by the Bank of Ghana. Also, the findings provide evidence in support of the recent upsurge in bank short‐term deposit mobilization strategies and promotions by commercial banks in the country to enhance their deposit base.     

How does Bank Capital Affect Bank Profitability and Risk? Evidence from China's WTO Accession

This paper examines how bank capital affects bank profitability and risk in China, and how its impact differed before and after the nation entered the WTO. Our study uses the dynamic generalized method of moments approach with a panel database containing 171 Chinese commercial banks. We find that bank capital has significant influence on bank profitability and risk, but its impact has declined since China joined the WTO in 2001. For different sized groups, the impact of capital on profitability exhibits a distinct trend. The effects of capital on bank risk are different for large and small banks depending on the risk variables used for the Chinese banking industry.     

Bank financial structure in pre-crisis East and Southeast Asia

Seeking evidence on the role of bank governance in the 1997 crisis, we study financial structure and bank performance from 1987 to 1997. Financial performance ratios (capital adequacy, liquidity, profitability, and loan preference) are regressed on structural variables (bank assets, net income, administrative expenses, and time), focusing on banks’ management efficiency and financial performance. During financial liberalization, loan-preference ratios were higher, perhaps signaling more risk; so were capital-adequacy ratios. Capital adequacy falls, then rises as management size increases; profitability behaves oppositely, indicating diminishing returns. Thailand’s, Korea’s and Indonesia’s banks show stronger lending preference but weaker profitability; possible harbingers of crisis.     

Bank profitability and the bank lending channel: Evidence from China

This paper uses bank-level data to investigate whether the impact of monetary policy on bank lending depends on the characteristics of Chinese banks during the period 1985–2007. We find that the impact of monetary policy on lending is weaker for larger banks and banks with lower levels of liquidity, and that banks’ responses to monetary policy do not necessarily vary according to their capital. Further, to identify the bank lending channel more clearly, we test whether the impact of monetary policy varies according to profitability. The results show that profitable banks tend to be less sensitive to monetary policy, because when tight monetary policy leads to a fall in deposits, less profitable banks face a higher cost of capital.     

我国商业银行盈利性、增长性和充足性分析

资本硬约束下如何更好地协调盈利性和安全性成为我国商业银行急需解决的问题。本文以银行资本充足率为主线,对银行的盈利性、增长性和充足性三者之间的内在联系进行了理论上和实证上的系统性分析。笔者认为三因素存在着相互制约的内在联系,特别值得提出的是,目前我国商业银行一直存在着由高增长带来的“规模情结”,这不仅不利于保证安全性和流动性,也将在追求短期盈利性的同时导致资本约束瓶颈。     

Comparison of Bank Profitability in China and the USA

This paper examines and compares the profitability of banks in the USA and China. The USA has the largest market‐based banking system and the financial system of China is still bank‐based. Our analysis indicates that in terms of profitability, banks in China outperformed those in the USA during our study period (2008–2014). Real estate loans had an adverse effect on US bank profitability during the financial crisis and no effect after the crisis but consistently improved the profitability of Chinese banks. Interest margins have no effect on US bank profitability but a consistently positive effect on Chinese banks, confirming that China is a traditional bank‐based economy. Interbank loans have a positive and significant effect on Chinese bank profitability, while interbank domestic loans have a negative effect on US bank profitability. Finally, size had a positive effect on US banks after the financial crisis period, confirming the scale economies of large US banks, but a negative effect on Chinese banks, indicating diseconomies of scale.     

Identifying Financial Distress Indicators of Selected Banks in Asia

The banking sector plays a pivotal role in the economic development of most Asian countries. In 1997, a full-fledged banking and financial crisis took place in South Asian countries. Many banks had to be bailed out by their governments. It is believed that an examination of indicators that led to the problems suffered by banks in this region will be of enormous benefit. Models were developed for each country that identified banks experiencing financial distress as a function of financial ratios. The countries in the study include Indonesia, South Korea and Thailand. The banking sectors of these three countries are ideal for this study, as the banks enjoyed profitability during the pre-crisis period and were the most severely affected by the financial crisis in 1997. Logistic regression was used to analyze the data sample from 1995 to 1997. In the findings, capital adequacy, loan management and operating efficiency are three common performance dimensions found to be able to identify problem banks in all three countries. It is hoped that the financial ratios and results of the models will be useful to bankers and regulators in identifying problem banks in Asia.     

Cooperation Satisfaction and Performance： Empirical Evidence from Chinese Banks and Their Foreign Strategic Investors

In this paper, we investigate whether the mutual satisfaction of Chinese banks and foreign strategic investors （FSI） in terms of their cooperation with each other affects the performance of Chinese banks＇. Since 2004, China ＇s banking authority has conducted an annual survey on Chinese banks and their FSI, assessing levels of mutual satisfaction in terms of their cooperation. We use these survey results to examine the effects of satisfaction levels on the profitability of Chinese banks. Our results reveal that satisfaction affects profitability; that is, satisfied foreign investors and Chinese banks yield better performance. Satisfaction determinants for each party are also examined. Although the profitability of Chinese banks does not show a significant effect on the satisfaction of either party, bank loan to deposit ratios, regions of FSI home countries, and the type of Chinese banks＇ are important factors that might affect satisfaction.     

业务运作视角下的中国商业银行效率研究

随着中国经济进入新常态,商业银行之间的竞争越发激烈,通过对商业银行在筹资、投资以及中间业务运作方面的效率进行分析,来优化银行的竞争策略.利用改进的DEA网络模型对4家国有商业银行、13家股份制商业银行以及4家城市商业银行共21家银行进行了效率测算,并从资金运作规模、业务多元化和商业银行承担的角色3个方面对商业银行的效率进行评价,发现不同类型的商业银行的业务特点与其战略定位相关.在研究成果的基础上提出一些政策建议,辅以部分统计性结果进行论证,以提高结论的科学性.     

Basel regulations and banks’ efficiency: The case of the Philippines

Using stochastic frontier analysis, this paper has examined the impact of Basel II on the cost efficiency of Philippine commercial banks from 2001 to 2011. The overall mean cost efficiency estimate is 0.75, indicating substantial inefficiencies in the banks averaging to 25% of total costs. Findings show that higher capital requirement tends to improve the cost efficiency but more powerful supervisors can adversely affect the efficiency of the banks. The other potential correlates that may help explain the efficiency of the banks are risk and asset quality and bank-specific variables. From a policy perspective, this study is informative to policymakers on the general direction in which to proceed with reforms (i.e., maintain higher capital requirements, curtail powerful supervisors, and enhance private monitoring) and in identifying factors that could contribute to banks’ efficiency especially in light of the newly implemented Basel III in the country. In effect, this paper also assesses the readiness of the banks toward the implementation of Basel III.     

我国商业银行竞争力比较研究

本文研究了现阶段我国金融机构的发展格局、选用资本状况、资产状况、盈利能力、资产流动性和世界银行业排名等指标,对我国主要商业银行的经营状况与竞争力进行了探究。     

基于RAROC的我国上市商业银行经济资本配置分析

在资本约束日益严格的情形下,研究我国商业银行经济资本配置问题具有重要意义。基于2014年我国13家上市银行的相关数据,以RAROC指标为核心分析了我国上市商业银行经济资本配置的效率高低问题。研究结果显示：我国各上市商业银行风险调整后收益率的标准差水平普遍都不够理想,各类业务之间的发展均衡性不高。此外,银行各类业务发展的均衡水平与风险调整后收益率的大小匹配度不高,最终提出相关建议。     

Efficiency of the Banking Industry Structure in Korea*

This paper analyzes whether the efficiency of the Korean banking industry has improved since the bank restructuring in 1997, and whether a bank with high efficiency has a larger market share. This paper uses an efficient structure hypothesis model to examine the relationship between the banks' efficiencies and their profitability. The data envelopment analysis method is applied to measure the efficiency and profitability of the banking industry in order to minimize possible bias due to the inflow of public funds for the bank consolidation. The two‐step Heckman selection method is used to correct for survivorship bias in the model. The derived result indicates that banks with higher efficiencies tend to record higher profit. Moreover, higher pure technological efficiency and scale efficiency have a positive effect on a bank's market share and concentration.     

The effects of governance changes on bank efficiency in China: A stochastic distance function approach

China has accelerated banking reform since joining the Word Trade Organisation (WTO) in 2001. Employing a stochastic distance function approach, this paper examines bank technical efficiency and differentiates the static, selection and dynamic governance effects on bank efficiency for the 11-year period 1995–2005. The results show that bank efficiency has improved. Joint-stock ownership is associated with better performance in terms of profitability than state ownership (static effect). Strong selection effects are found for both foreign acquisition and going public reform strategies. Foreign acquisition may benefit domestic banks by efficiency gains in the long run, but privatization via initial public offerings (IPOs) appears to have only some short-term effects.     

THE TECHNICAL INEFFICIENCY EFFECTS OF TURKISH BANKS AFTER FINANCIAL LIBERALIZATION

The banking sector in Turkey has grown significantly over the last two decades of financial liberalization. One of the aims of the financial liberalization was to improve efficiency through restructuring programs including the privatization of state banks and the encouragement of mergers. In this paper we identify key factors determining the technical efficiency differentials among Turkish commercial banks in the pre‐ and post‐liberalization periods, using the technical inefficiency effects model. We found that loan quality, size, ownership of the banks, and profitability have a positive and significant impact on the technical efficiencies of banks. The results warrant implementation of effective regulatory measures to improve the quality of the earning assets of commercial banks. Furthermore, steps by the government to encourage acquisitions or mergers for private banks and the privatization of state‐owned banks seem to be consistent in improving the overall efficiency of commercial banking in Turkey.     

Does Property Rights Reform Improve the Efficiency of China＇s State-owned Banks？

China ＂s state-owned banks have undergone radical changes over the past two decades, including partial privatization and listing in both the Hong Kong Stock Exchange and the Shanghai Stock Exchange. This paper evaluates the effects of these changes by analyzing the efficiency of Chinese banks over the period 1998-2012 using two frontier techniques and comparative analysis. The findings suggest that the performance and technical efficiency of the Big Four banks improved considerably after property rights reform, but this improvement is not sufficient to keep the banks at the production frontier. Tobit regressions confirm that static ownership effects are negative but that the property rights reform has had significant and positive effects on the technical efficiency of state-owned commercial banks. GDP growth and the financial crisis have had positive effects on the efficiency of Chinese banks, which is more significant for joint stock commercial banks than state-owned commercial banks. The results indicate the value of ownership reforms of state-owned asset management companies and insurance companies and the establishment of a countercyclical capital buffer.     

Profitability and productivity of Chinese industrial firms: Measurement and ownership implications

This paper assesses the reform of state-owned enterprises (SOEs) by examining the effect of ownership on the profitability and productivity of Chinese industrial firms. Several methodological issues concerning profit measurements of enterprises under different ownership structures are identified and discussed. Test results based on a panel data set provide evidence that capital structures, taxes, and welfare burdens have a significant effect on the financial performance of Chinese enterprises. After adjusting for these effects, SOEs still show poor financial performance, which, we show, is attributable to the effect of “soft loans.” Although SOEs grew faster in productive efficiency during 1996–1998, their growth rate in profitability lagged behind that of firms with other ownership structures.     

Performance of Domestic and Foreign Banks: The Case of Korea and the Asian Financial Crisis

Abstract

This paper examines the performance of banks, domestic and foreign, in Korea before and after the Asian financial crisis, examining how the profitability of those banks differed and identifying factors that explain why those differences existed. The performance of Korean banks deteriorated dramatically in 1998 with most banks recovering somewhat in 1999. Foreign banks did not experience the same negative effect on their performance as a rule. Overall, the domestic Korean banks suffered more severely from the Asian financial crisis than foreign banks. Several possible explanations exist. First, foreign banks, unlike domestic Korean banks, were not subject to credit allocation directives from the Korean government to selected, favoured industries. Second, foreign banks, since they relied for governance on the mother bank in the home country, achieved higher efficiency and better asset and liability management. Finally, foreign banks rely more heavily on fee-for-service income rather than loan revenue.     

我国商业银行管理会计应用浅析

商业银行管理会计涵盖财务预算、成本核算、盈利分析、业绩评价和资产负债管理等内部管理的核心内容,提供银行发展战略、盈利能力、风险预警和业绩衡量等重要信息。为了充分发挥管理会计在我国商业银行经营管理中的作用,以提高商业银行的经营效益、管理水平和市场竞争力,本文具体阐述了当前我国商业银行管理会计应用与革新的主要内容,并提出了在商业银行推行管理会计的对策建议。