ESG Scores and Bank Performance During COVID-19

2022 ◽  
pp. 241-260
Author(s):  
Gamze Ozturk Danisman
Keyword(s):  
Stock Returns ◽  
Extended Period ◽  
Negative Influence ◽  
Policy Implications ◽  
European Countries ◽  
Time Period ◽  
Bank Stock Returns ◽  
Bank Stock ◽  
The Impact ◽  
Extended Time Period

This chapter examines the impact of ESG scores on bank stock returns as a response to the COVID-19 pandemic. The authors use a sample of 73 publicly listed banks from 15 developed European countries. They perform the analysis using two different periods that cover the pandemic: the first major wave period of COVID-19 (February-April 2020) and an extended period (February 2020-April 2021). The findings reveal the negative influence of the COVID-19 pandemic on bank stock returns during the first wave of the pandemic. They further find that, during the first wave, stock returns of banks with higher ESG scores were more resilient to the pandemic. However, when they use the extended time period (from February 2020-April 2021), the influence of both COVID-19 and ESG scores becomes insignificant. The chapter's findings have important policy implications during unprecedented crisis times such as COVID-19.

scholarly journals REAL ESTATE MARKET RISK IN BANK STOCK RETURNS: EVIDENCE FOR 15 EUROPEAN COUNTRIES

2016 ◽  
Vol 20 (2) ◽  
pp. 142-155 ◽  
Author(s):  
António Miguel MARTINS ◽  
Ana Paula SERRA ◽  
Francisco Vitorino MARTINS
Keyword(s):  
Real Estate ◽  
Stock Returns ◽  
Real Estate Market ◽  
European Countries ◽  
Market Conditions ◽  
High Exposure ◽  
The Real Estate ◽  
Real Estate Sector ◽  
Bank Stock Returns ◽  
Bank Stock

In countries with highly-developed financial systems bank portfolios have high exposure, directly or indirectly, to the real estate sector. Changes in the value of real estate can have a potentially significant impact on the default risk of banks and on their profitability as a result of high exposure to the real estate sector. This is especially critical during real estate crises, when bank losses tend to increase dramatically, placing the entire financial system at risk of collapse, as it was the case of the recent international subprime crisis. This article studies the sensitivity of bank stock returns to real estate returns in 15 European countries. The results indicate that bank stocks are sensitive to real estate market conditions. There is a positive relation between bank stock returns and real estate returns after controlling for general market conditions and interest rates changes.

The Impact of Interstate Banking Legislation on Target and Buyer Bank Stock Returns

1996 ◽  
Vol 22 (7) ◽  
pp. 24-42
Author(s):  
Harold A. Black ◽  
M. Andrew Fields ◽  
Robert L. Schweitzer
Keyword(s):  
Stock Returns ◽  
Interstate Banking ◽  
Bank Stock Returns ◽  
Bank Stock ◽  
The Impact

scholarly journals The Impact of SFAS 133 on Income Smoothing by Banks through Loan Loss Provisions

2012 ◽  
Vol 88 (1) ◽  
pp. 233-260 ◽  
Author(s):  
Emre Kilic ◽  
Gerald J. Lobo ◽  
Tharindra Ranasinghe ◽  
K Sivaramakrishnan
Keyword(s):  
Stock Returns ◽  
Income Smoothing ◽  
Data Availability ◽  
Loan Loss ◽  
Loan Loss Provisions ◽  
Sfas 133 ◽  
Bank Stock Returns ◽  
Bank Stock ◽  
Loan Defaults ◽  
The Impact

ABSTRACT: We examine the impact of SFAS 133, Accounting for Derivative Instruments and Hedging Activities, on the reporting behavior of commercial banks and the informativeness of their financial statements. We argue that, because mandatory recognition of hedge ineffectiveness under SFAS 133 reduced banks' ability to smooth income through derivatives, banks that are more affected by SFAS 133 rely more on loan loss provisions to smooth income. We find evidence consistent with this argument. We also find that the increased reliance on loan loss provisions for smoothing income has impaired the informativeness of loan loss provisions for future loan defaults and bank stock returns. Data Availability: The data are available from public sources.

Does Change in Ted Spread Impact Bank Stock Returns?

2021 ◽  
pp. jwm.2021.1.151
Author(s):  
Srinivas Nippani ◽  
Augustine C. Arize ◽  
D. K. Malhotra
Keyword(s):  
Stock Returns ◽  
Bank Stock Returns ◽  
Bank Stock

Market efficiency, the Mexican peso crisis, and the US bank stock returns

2000 ◽  
Vol 11 (1-2) ◽  
pp. 73-86 ◽  
Author(s):  
Osman Kilic ◽  
M.Kabir Hassan ◽  
David Tufte
Keyword(s):  
Market Efficiency ◽  
Stock Returns ◽  
The Us ◽  
Bank Stock Returns ◽  
Bank Stock ◽  
Mexican Peso

Investors’ sentiment and accruals anomaly: European evidence

2018 ◽  
Vol 19 (4) ◽  
pp. 500-517 ◽  
Author(s):  
Francisca Beer ◽  
Badreddine Hamdi ◽  
Mohamed Zouaoui
Keyword(s):  
Stock Returns ◽  
Cultural Values ◽  
Investor Sentiment ◽  
European Countries ◽  
Legal Tradition ◽  
Content Type ◽  
Legal Enforcement ◽  
Accruals Anomaly ◽  
High Level ◽  
The Impact

Purpose The purpose of this paper is to examine whether investors’ sentiment affects accruals anomaly across European countries. Design/methodology/approach The authors estimate the model using Fama–MacBeth regressions. The sample includes 54,572 firm-year observations for 4,787 European firms during the period 1994–2014. Findings The authors find that investors’ sentiment influences accruals mispricing across European countries. The effect is pronounced for stocks whose valuations are highly subjective and difficult to arbitrage. The cross-country analysis provides evidence that sentiment influences accruals anomaly in countries with weaker outside shareholder rights, lower legal enforcement, lower equity market development, higher allowance of accrual accounting and in countries where herd-like behavior and overreaction behavior are strong. Research limitations/implications The findings suggest the generalizability of the sentiment-accruals anomaly relation in European countries characterized by different cultural values, levels of economic development and legal tradition. Practical implications The findings suggest to caution individuals investors. These investors would be wise to take into account the impact of sentiment on the performance of their portfolio. They must keep in mind that periods of high optimism are accompanied by a high level of accruals and followed by low future stock returns. Originality/value The research supplements previous American studies by showing the significance of the level of sentiment in understanding the accruals anomaly in Europe. Hence, it is important for future studies to consider investor sentiment as an important time-series determinant of the accruals anomaly, particularly for stocks that are hard to value and difficult to arbitrage.

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