For the evaluation of banks¡¦ performance, non-performing loans ratio and capital adequacy ratio are the two major indicators other than earnings performance. Among the various tools for earnings manipulation, loan loss provisions may be the only one that could affect bank¡¦s earning numbers, non-performing loans ratio and capital adequacy ratio simultaneously. In order to satisfy the need to increase earnings and capital adequacy ratio and to decrease non-performing loans ratio, banks may have motivation to conduct earnings management. The purpose of the study is thus to investigate whether there is a relationship between the earnings management by using the discretionary loan loss provisions and the earnings before loan loss provisions, non-performing loans ratio, capital adequacy ratio, asset size, loan growth rate, and loans uncollected. In addition, the study divides the sample banks into the following categories: (1) commercial banks versus others, (2) new banks versus old banks (based on the time the bank was founded), and (3) state-run versus non-state-run (based on whether the president of the bank is appointed by the government). The study also intends to examine whether earnings management conducted by the bank¡¦s management is different between the various categories. Based on the empirical results from the Taiwan Economics Journal (TEJ) database, the study found: (1) the three variables of earnings before loan loss provisions, asset size, and loans uncollected are significantly related to the earnings management by using discretionary loan loss provisions, and the higher the three variables, the higher the degree of earnings management; (2) non-performing loans ratio, capital adequacy ratio, and loan growth rate are not found to be significantly related to the earnings management by using discretionary loan loss provisions; (3) state-run banks have conducted more earnings management than non-state-run banks; and (4) there is no significant result found in other analyses for other categories.

多角化是否能提升銀行獲利與降低風險？本文採2000年至2007年21家本國銀行之年資料，獲利以調整呆帳費用後之資產報酬率作為評估基礎；風險以資產報酬率的標準差衡量，利用追蹤資料分析法，探討銀行多角化程度對獲利與風險之影響，並分析對於逾放比率不同之銀行，其獲利、風險之影響因素是否有所差異，實證結果顯示：一、依品質一致性原則調整呆帳後之資產報酬率，較財報公佈之資產報酬率具較佳之解釋能力與統計顯著性；二、營業收入多角化可提升獲利與降低風險；資產配置多角化不但無法提升獲利，甚使其面臨更高之風險；轉投資模式與風險具有負向關係；三、金融控股公司經營模式與獲利具有正向關係；資產規模與風險具有負向關係；權益資產比及用人費用率與獲利、風險具有負向關係；總體環境因素和風險具有正向關係；四、對於低逾放比率銀行，分散營業收入來源，擴充銀行規模及提高自有資金比例，對其獲利與風險皆有正面之助益；對於高逾放比率銀行，僅有營業收入多角化模式可同時提升獲利與降低風險，意謂此類銀行除可採取營業收入多角化策略彌補呆帳損失外，亦應確實監控授信資產品質，方能有效地改善獲利能力與降低風險。 / Does diversification indeed lead to increase profitability and reduce risk? We use a panel dataset of 21 banks in Taiwan for the period from 2000 to 2007, bad debt-adjusted ROA serves as the measure of profitability and the standard deviation of ROA serves as the measure of risk. This study investigate the effect of diversification on profitability and risk and hope to know how it works out under different non-performing loans ratio. Our main finding are as follows:(i)Compare with ROA in financial statement ,bad debt-adjusted ROA making better significance. (ii)Revenue diversification has positive relation to increase profitability and negative to reduce risk. Asset diversification has negative relation to reduce profitability and positive relation to increase risk. Equity investment has negative relation between risk. (iii) Banks operating as part of financial holding companies can improve profitability. Size has negative relation between risk. Equity to asset ratio and compensation to revenue ratio have negative relation to reduce both profitability and risk. Macroeconomic factor has positive relation to increase risk.(iv)For low non-performing loans ratio banks, revenue diversification, size and equity to asset ratio have positive relation to increase profitability and negative to reduce risk. For high non-performing loans ratio banks, revenue diversification is the only way to improve banks’ profitability and reduce risk. It draws a conclusion that banks monitor loan need strengthening in high non-performing loans ratio banks.