Russian state banks will crowd out private sector

2019 ◽  
Keyword(s):  
Mergers And Acquisitions ◽  
Interest Rates ◽  
Banking Sector ◽  
Consumer Credit ◽  
Content Type ◽  
Russian State ◽  
Private Banks ◽  
Financial Growth ◽  
Economic Upturn ◽  
Pension Age

Subject Banking evolution in Russia. Significance Financial growth in the banking sector is concentrated at the top end among large state-owned institutions. An economic upturn helped corporate lending grow in 2018, while consumer credit shot up because interest rates fell and because households seem to be meeting spending shortfalls by borrowing. The Central Bank of Russia (CBR) continued its clean up, rescinding more bank licences. Impacts Pension age rises are likely to stimulate demand for savings products and mortgages. Payments into pension funds, often part of large banking groups, are likely to increase. Slowing domestic economic growth and increased competition will drive mergers and acquisitions among smaller private banks.

scholarly journals Do mergers and acquisitions affect information asymmetry in the banking sector?

2020 ◽  
Vol 46 (12) ◽  
pp. 1521-1547
Author(s):  
John S. Howe ◽  
Thibaut G. Morillon
Keyword(s):  
Mergers And Acquisitions ◽  
Information Asymmetry ◽  
Design Methodology ◽  
Banking Sector ◽  
Policy Makers ◽  
Content Type ◽  
Deal Completion ◽  
Asymmetry Measures ◽  
The Impact

PurposeThis paper aims to investigate the consequences of mergers and acquisitions (M&As) on information asymmetry in the banking sector. Specifically, the authors look at whether specific firm or deal characteristic influence information asymmetry levels between insiders and investors, as well as the impact of recent regulation such as the Dodd–Frank Act.Design/methodology/approachThe authors decompose the M&A process into three periods (pre-announcement, negotiation and post-completion period) and document changes in the information asymmetry levels between insiders and investors through the M&A process. The authors capture changes in information asymmetry using six different spread-based information asymmetry measures.FindingsThe authors find evidence that information asymmetry increases following M&A announcement and decreases following deal completion. These findings are more pronounced for acquisitions involving a private target, all-cash deals and for mergers, as opposed to acquisition of assets. We find that overall, successful mergers improve the quality of the information environment, while failed deals degrade it. Additionally, the enactment of Dodd–Frank reduced the magnitude of the changes in information asymmetry during the M&A process. The results are important to regulators, policy makers and investors.Originality/valueTo authors’ knowledge, this is the first study that looks at the effect of bank M&As on information asymmetry as well as the effect of regulations on information asymmetry.

Brazil banks will stay cautious amid fragile recovery

2017 ◽  
Keyword(s):  
Private Sector ◽  
Banking Sector ◽  
Retail Banking ◽  
Foreign Bank ◽  
Foreign Banks ◽  
Risk Averse ◽  
Public And Private ◽  
Content Type ◽  
Private Banks ◽  
Public And Private Sector

Subject Outlook for the banking sector. Significance The two-year recession has made Brazil’s public- and private-sector banks increasingly risk-averse in their lending to households and companies. This is likely to persist in 2017, owing to a very uncertain and fragile economic recovery, high unemployment and elevated levels of private-sector debt. Impacts Less-aggressive lending by national state banks will help public finances and give private banks a chance to increase market share. Spanish Santander will be the only foreign bank capable of competing in Brazil’s retail banking segment in the coming years. Other foreign banks lacking the necessary scale for profitable retail banking will focus on other niches.

Another rating upgrade is likely for Hungary soon

2016 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Banking Sector ◽  
Credit Rating ◽  
Emerging Market ◽  
Investor Sentiment ◽  
Central Banks ◽  
The Philippines ◽  
Content Type ◽  
Investment Grade

Significance Hungary thereby regains investment-grade status, albeit at the lowest level, from being downgraded to 'junk' because of doubts about the government's policies and the high public debt burden. Hungary's improving creditworthiness, underpinned by its current account surplus and deleveraging in the banking sector, contrasts with the increasing strain on Poland's credit rating. Political risk has become a major driver of investor sentiment towards emerging markets. Impacts Emerging market assets have become more vulnerable as investors reprice US monetary policy. Futures markets are now assigning a 51% probability to another rise in US interest rates at or before the Federal Reserve's July meeting. Central Europe's government bond markets are being supported by the persistently dovish monetary policy stance of its central banks. This contrasts with Latin America, where inflationary pressures are forcing many central banks to raise rates. Brazil, Turkey, Poland and the Philippines are among several countries where political uncertainty is a key determinant of asset prices.

Polish banking scandal may lead to more consolidation

2018 ◽  
Keyword(s):  
Interest Rates ◽  
Financial Institutions ◽  
Banking Sector ◽  
Financial Sector ◽  
Household Consumption ◽  
Financial Supervision ◽  
External Shocks ◽  
Content Type ◽  
Near Term ◽  
Loan Growth

Significance Allegations of bribery and corruption against the former chairman of Poland’s Financial Supervision Authority (KNF), the financial sector regulator, have stoked both political and regulatory tensions. Impacts The banking sector is resilient to domestic and external shocks, but a slowdown in GDP could dampen household loan growth next year. Further sector consolidation is likely and would further underline the dominance of large, state-backed financial institutions. Interest rates are unlikely to be raised before end-2019 at the earliest, providing some support to household consumption in the near term.

Market volatility endangers moves to replace LIBOR

2020 ◽  
Keyword(s):  
United States ◽  
Interest Rates ◽  
Banking Sector ◽  
Market Volatility ◽  
Content Type ◽  
Consumer Loans ◽  
The United Kingdom ◽  
Interest Rate Swaps ◽  
The Us ◽  
The Uk

Subject The transition away from LIBOR. Significance The London Interbank Offered Rate (LIBOR) has been relied upon worldwide since 1970 for setting interest rates on syndicated loans, corporate debt, consumer loans, interest rate swaps and other derivatives. Following the 'LIBOR scandal' of 2008, the UK Financial Conduct Authority took over the regulation and administration of the rate, and no manipulation has emerged since 2013. Nevertheless, the United Kingdom and United States are determined to replace LIBOR. Impacts COVID-19 could prompt the US Fed to increase its support to the repo market, exacerbating fears that SOFR is not market determined. The scale and duration of COVID-19-related economic disruptions loom over banking sector profitability. Banks will struggle to balance immediate priorities triggered by COVID-19, and the need to devote staff and funds to the LIBOR transition.

Analysing banks’ intermediation and operating efficiencies using the two-stage network DEA model

2017 ◽  
Vol 66 (4) ◽  
pp. 500-516 ◽  
Author(s):  
Rachita Gulati ◽  
Sunil Kumar
Keyword(s):  
Production Process ◽  
Banking Sector ◽  
Practical Implication ◽  
Operating Efficiency ◽  
Data Envelopment Analysis Model ◽  
Truncated Regression ◽  
Two Stage ◽  
Bank Efficiency ◽  
Content Type ◽  
Private Banks

Purpose The purpose of this paper is to present a holistic approach for measuring overall bank efficiency and its decomposition in intermediation and operating efficiencies. Design/methodology/approach Recently developed two-stage network data envelopment analysis model by Liang et al. (2008) has been used for obtaining intermediation and operational efficiencies along with overall bank efficiency. The bootstrapped truncated regression algorithm as proposed by Simar and Wilson (2007) has been employed to explore the influential determinants of intermediation and operating efficiencies. Findings The empirical results reveal that the operating inefficiency is the dominant source of overall bank inefficiency in Indian banking sector. Another interesting finding is that public sector banks are more efficient than private banks in the intermediation stage of production process, while private banks are more efficient in the operating stage of production process. Finally, the results of bootstrapped truncated regression show that variations in intermediation efficiency are explained by bank size, liquidity position, directed lending and intermediation cost, while inter-bank differences in operating efficiency are influenced by profitability and income diversification. Practical implications The most significant practical implication that has been derived from the research findings is that at the industry level, overall efficiency enhancement needs improvement both in terms of resource-utilization and income-generating abilities of the banks. However, the relatively easy way to achieve higher bank efficiency is to improve the efficiency of banks in generating incomes from interest and fee-based sources. Originality/value This paper is the first to provide a comprehensive assessment of performance of Indian banks by examining the efficiency of individual banks considering both the intermediation and operating approaches simultaneously.

scholarly journals The Second Wave of Nationalization of the Banking Sector in Irkutsk Province in the Early 1920s

2020 ◽  
Vol 15 (6) ◽  
pp. 62-71
Author(s):  
Plotnikova Elena V. ◽  
Keyword(s):  
Economic History ◽  
Banking Sector ◽  
Political Regime ◽  
Genetic Method ◽  
Bank Branches ◽  
Russian State ◽  
Private Banks ◽  
Banking Institutions ◽  
History Of ◽  
In The Beginning

The article considers one of the aspects of the economic history of Russia, in particular, the nationalization of the banking sector in the Irkutsk province, which took place in the beginning of 1920 after the final approval of the power of the Soviets in the region. The relevance of the publication is dictated by the growth of scientific interest in the problems that make up the field of economic history research. In the realities of modern political and economic development of the Russian state, the specifics of the development of nationalization processes in certain sectors of the national economy, taking into account the existence of accompanying negative factors and working out ways to overcome them, also have a certain interest. The historical and genetic method, along with the principles of historicism and consistency, allowed us to restore the fabric of historical reality in the framework of the process of nationalization of the banking sector of the Irkutsk province and identify a number of negative phenomena that affected the fate of persons involved in this process. The nationalization processes that began in December 1917 were suspended by the change of the political regime in the province in July 1918. After the restoration of Soviet power, the Bolsheviks re-launched the nationalization of private banks in the region by creating a Liquidation and Technical Board, which in addition to representatives of Soviet authorities included employees of the banking sector in Irkutsk. The article describes the composition of the Board, highlights its activities related to the resolution of issues related to the payment of salaries to its employees, as well as employees of liquidated banking institutions. The issue of employees of evacuated bank branches located in Irkutsk at the time of nationalization is considered separately. The publication highlights the current shortage of money supply in the region, which resulted in delays in the salaries of employees in the banking sector and, as a result, the deterioration of their financial situation in the period under review. Keywords: nationalization, banking sphere of Irkutsk province, Liquidation and Technical Board, evacuation of bank branches, employees of private banks in Irkutsk

Turkey looks to ride out financial assets volatility

2016 ◽  
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Investor Sentiment ◽  
Military Coup ◽  
Bond Markets ◽  
Financial Assets ◽  
Content Type ◽  
Inflation Rates ◽  
Government Bond Markets ◽  
Global Government

Significance The Central Bank is expected to keep its main interest rates on hold, despite the lira continuing to fall sharply against the dollar and headline and core inflation rates that are more than 2 percentage points above the TCMB's 5% target. The toxic combination of an escalation in the crackdown following the botched military coup in July and, crucially, a sharp deterioration in investor sentiment towards emerging markets (EMs) since Donald Trump's election as US president have put Turkish assets under renewed strain. Impacts EMs are currently on the sharp end of a fierce sell-off in global government bond markets. Investors are repositioning their portfolios in anticipation of more aggressive hikes in interest rates during a Trump presidency. The sell-off comes amid improving EM fundamentals, unlike the 'taper tantrum' after the Fed unexpectedly shrank asset purchases in 2013. Turkey's creditworthiness will continue to suffer after the botched military coup. Limiting the scope for a full-blown financial crisis is its banking sector, among the emerging world's best capitalised and most resilient.

scholarly journals How Do Individuals Choose Banks? An Application to Household Level Data from Turkey

2009 ◽  
Vol 9 (1) ◽  
Author(s):  
Oya Pinar Ardic ◽  
Uygar Yuzereroglu
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Emerging Market ◽  
Probit Model ◽  
Study Groups ◽  
Bank Failures ◽  
Structural Factors ◽  
Data Set ◽  
Level Data ◽  
Private Banks

Abstract This paper uses a multinomial probit model to analyze individuals' choice of banks based on the types of banking services they use, their own characteristics, and their own perceptions about important factors in banking. Previous studies on this topic, which are limited in number, concentrate on the U.S. where financial markets are well-developed. This analysis uses a unique individual level data set from a nation-wide survey implemented after the 2001 crisis in Turkey, of which one major component was bank failures. Hence, it provides the first set of econometric evidence on the topic in an emerging market context. The study groups banks into three categories: public, large private and small private banks, among which the latter is perceived to be the potentially risky group. Investigating individuals' choice among these three types, the paper uncovers that while individuals tend to prefer small private banks on the basis of high interest rates, they tend to avoid them on the basis of trust. Additionally, the paper finds that the choice between public and large private banks mainly depends on structural factors. These results could be of potential use to policymakers in regulating the banking sector and to bank management in channeling marketing effort.

Assessment of service quality using text mining – evidence from private sector banks in India

2018 ◽  
Vol 36 (4) ◽  
pp. 594-615 ◽  
Author(s):  
Somnath Chakrabarti ◽  
Deepak Trehan ◽  
Mayank Makhija
Keyword(s):  
Service Quality ◽  
Sentiment Analysis ◽  
Banking Sector ◽  
Cost Effective ◽  
Retail Banking ◽  
Traditional Concept ◽  
Content Type ◽  
Product Categories ◽  
Cost Effective Approach ◽  
Private Banks

Purpose As the retail banking institutions are becoming more customer centric, their focus on service quality is increasing. Established service quality frameworks such as SERVQUAL and SERVPERF have been applied in the banking sector. While these models are widely accepted, they are expensive because of the need for replication across bank branches. The purpose of this paper is to propose a novel, user friendly and cost effective approach by amalgamating the traditional concept of service quality in banks (marketing base) and sentiment analysis literature (information systems base). Design/methodology/approach In this study, the main objective is to analyze user reviews to better understand the correlation between RATER dimension sentiment scores as independent variables and user overall rating (customer satisfaction) grouping in “good” and “bad” as dependent variable through development of authors’ own logistic regression model using lexicon-based sentiment analysis. The model has been developed for three largest private banks in India pertaining to three banking product categories of loans, savings and current accounts and credit cards. Findings The results show that the responsiveness and tangibles dimensions significantly impact the user evaluation rating. Even though the three largest private banks in India are concentrating on the tangibles dimension, not all of them are sufficiently focused on the responsiveness dimension. Additionally, customers looking for loan products are more susceptible to negative perceptions on service quality. Originality/value This study has highlighted two types of scores whereby user provided overall evaluation scores help provide validation to the sentiment scores. The developed model can be used to assess performance of a bank in comparison to its peers and to generate in depth insights on point of parity (POP) and point of difference (POD) fronts.

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