The impact of bank ownership concentration on impaired loans and capital adequacy

2010 ◽  
Vol 34 (2) ◽  
pp. 399-408 ◽  
Author(s):  
Choudhry Tanveer Shehzad ◽  
Jakob de Haan ◽  
Bert Scholtens
Keyword(s):  
Capital Adequacy ◽  
Ownership Concentration ◽  
Bank Ownership ◽  
The Impact

The Effect of Bank Ownership Concentration on Capital Adequacy, Liquidity, and Capital Stability

2013 ◽  
Vol 45 (2) ◽  
pp. 219-240 ◽  
Author(s):  
Pichaphop Chalermchatvichien ◽  
Seksak Jumreornvong ◽  
Pornsit Jiraporn ◽  
Manohar Singh
Keyword(s):  
Capital Adequacy ◽  
Ownership Concentration ◽  
Bank Ownership

scholarly journals Impact of ownership structure and ownership concentration on credit risk of Chinese commercial banks

2019 ◽  
Vol 16 (2) ◽  
pp. 253-272 ◽  
Author(s):  
Yang Liu ◽  
Sanjukta Brahma ◽  
Agyenim Boateng
Keyword(s):  
Credit Risk ◽  
Ownership Structure ◽  
Commercial Banks ◽  
Ownership Concentration ◽  
Private Ownership ◽  
Content Type ◽  
Credit Risks ◽  
Bank Ownership ◽  
Chinese Banks ◽  
The Impact

Purpose The purpose of this paper is to examine the effects of bank ownership structure and ownership concentration on credit risk. Design/methodology/approach Using panel data on a sample of 88 Chinese commercial banks, with 826 observations over a period of 2003–2018, this study has applied system generalised method of moments regression to examine the impact of bank ownership structure and ownership concentration on credit risk. This study has used two measures of credit risk, which are non-performing loan ratio (NPLR) and loan loss provision ratio (LLPR). Findings The results show that ownership type (both government and private ownership) exerts a positive and significant impact on credit risk. Measuring ownership concentration using Herfindahl–Hirchmann Index, the results indicate that concentration of ownership in the hands of government has a negative and significant effect on credit risk, whereas private ownership concentration positively impacts credit risk. Overall, the findings suggest that concentration of ownership in government hands reduces risk; however, private ownership concentration exacerbates credit risks. The results are invariant to both measures of credit risk, before and after the financial crisis. Practical implications The findings provide useful insight to guide policy decisions in Chinese banks’ lending policies and bank ownership. Originality/value Using two ex post measures of credit risk, NPLR and LLPR, and one ownership concentration measure, HHI, this study deepens our understanding on the effectiveness of Chinese banks’ corporate governance reforms on managing credit risks.

The Impact of Property Characteristics on Economic Performance of Russian Industrial Enterprises

2005 ◽  
pp. 53-68 ◽  
Author(s):  
R. Kapeliushnikov ◽  
N. Demina
Keyword(s):  
Detailed Analysis ◽  
Economic Performance ◽  
Ownership Concentration ◽  
Corporate Sector ◽  
Concentrated Ownership ◽  
Industrial Enterprises ◽  
Russian Industry ◽  
Control Premium ◽  
And Performance ◽  
The Impact

The paper provides new survey evidence on effects of concentrated ownership upon investment and performance in Russian industrial enterprises. Authors trace major changes in their ownership profile, assess pace of post-privatization redistribution of shareholdings and provide evidence on ownership concentration in the Russian industry. The major econometric findings are that the first largest shareholding is negatively associated with the firm’s investment and performance but surprisingly the second largest shareholding is positively associated with them. Moreover, these relationships do not depend on identity of majority shareholders. These results are consistent with the assumption that the entrenched controlling owners are engaged in extracting "control premium" but sizable shareholdings accumulated by other blockholders may put brakes on their expropriating behavior and thus be conductive for efficiency enhancing. The most interesting topic for further more detailed analysis is formation, stability and roles of coalitions of large blockholders in the corporate sector of post-socialist countries.

scholarly journals Does the target market affect bank performance? Evidence from the geographic diversification of city commercial banks in China

2021 ◽  
Vol 15 (1) ◽  
Author(s):  
Xiaonan Li ◽  
Chang Song
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Capital Adequacy ◽  
Bank Performance ◽  
Chinese Government ◽  
Target Market ◽  
Geographic Diversification ◽  
Cross Sectional ◽  
The Impact ◽  
Geographical Diversification

AbstractAfter the opening up of the banking sector to domestic and foreign capitals which is approved by the Chinese government, the China Banking Regulatory Commission (CBRC) has permitted city commercial banks to diversify geographically. Since this deregulation in 2006, city commercial banks began to geographically diversify to occupy the market and acquire more financial resources. To examine the causal relationship between geographical diversification and bank performance, we construct an exogenous geographical diversification instrument using the gravity-deregulation model and a policy shock. We find that bank geographical diversification negatively affects bank performance. Moreover, we conduct some mechanism tests in the Chinese context. We find that the target market with several large- and medium-sized banks and a high level of local protectionism in the target market decreases the performance of city commercial banks. Finally, cross-sectional analyses show that the impact of geographical diversification on banks’ performance is more notable among city commercial banks that are younger, and have a lower capital adequacy ratio and a higher non-performing loan ratio.

scholarly journals Assessing the Impact of Corporate Governance Index on Financial Performance in the Romanian and Italian Banking Systems

2021 ◽  
Vol 13 (10) ◽  
pp. 5535
Author(s):  
Marco Benvenuto ◽  
Roxana Loredana Avram ◽  
Alexandru Avram ◽  
Carmine Viola
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Banking Sector ◽  
Research Question ◽  
Interactive Effect ◽  
Banking System ◽  
Capital Adequacy ◽  
Banking Systems ◽  
Governance Index ◽  
The Impact

Background: Our study aims to verify the impact of corporate governance index on financial performance, namely return on assets (ROA), general liquidity, capital adequacy and size of company expressed as total assets in the banking sector for both a developing and a developed country. In addition, we investigate the interactive effect of corporate governance on a homogenous and a heterogeneous banking system. These two banking systems were chosen in order to assess the impact of corporate governance on two distinct types of banking system: a homogenous one such as the Romanian one and a heterogeneous one such as the Italian one. The two systems are very distinct; the Romanian one is represented by only 34 banks, while the Italian one comprises more than 350 banks. Thus, our research question is how a modification in corporate governance legislation is influencing the two different banking systems. The research implication of our study is whether a modification in legislation, thus in the index of corporate governance, is feasible for two different banking sectors and what the best ways to increase the financial performance of banks are without compromising their resilience. Methods: Using survey data from the Italian and Romanian banking systems over the period 2007–2018, we find that the corporate governance has a significant, positive and long-lasting effect on profitability and capital adequacy in both countries. Results: Taking the size of the company into consideration, the impact of the Index of Corporate Governance (ICG) on a homogenous banking system is positive while the impact on a heterogeneous banking system is negative. Conclusions: Our study provides evidence of the impact of IGC on financial performance and sheds light on the importance of the size of the company. Therefore, one can state that the corporate governance principles applied do not encourage the growth of large banks in heterogeneous banking sectors, thereby suggesting new avenues of research associated with new perspectives.

Ownership as a determinant of chairperson activity: a study of Nordic listed companies

2015 ◽  
Vol 7 (4) ◽  
pp. 412-428
Author(s):  
Tor Brunzell ◽  
Jarkko Peltomäki
Keyword(s):  
Working Hours ◽  
Chief Executive ◽  
Ownership Concentration ◽  
Content Type ◽  
Listed Firms ◽  
Concentrated Ownership ◽  
The Board Of Directors ◽  
The Impact ◽  
The Empirical Analysis ◽  
A Company

Purpose – The purpose of this study is to explicitly focus on the roles of ownership concentration, ownership by the board, the chief executive officer (CEO) and the chairperson in the involvement and capabilities of chairpersons and other governors in their work. Design/methodology/approach – In this study, the authors investigate the impact of the concentration of ownership, the ownership of the board, the CEO and the chairperson on the chairperson’s activity when the roles of the chairperson and the CEO are separated The empirical analysis of this study is based on a survey sent to Nordic listed firms. Findings – The results show that the ownership characteristics of a company are important in determining the chairperson’s working hours, the chairperson’s communication with the CEO and the performance of governance activity. In addition, the authors found that while the ownership of the chairperson and the board of directors and ownership concentration improve governance activity, CEO ownership may undermine governance activity. Research limitations/implications – The primary implication of the study is that both ownership by internal governors and ownership concentration play an important role in determining the involvement of internal corporate governors. Originality/value – The study provides unique evidence that ownership by the chairperson, concentrated ownership and ownership by the board can potentially mitigate the costs of separating the roles of the chairperson and the CEO.

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