published_or_final_version / Asian Studies / Master / Master of Arts

by Lau Kwok-ming, Paul, Ng Wai-ip, Danny. / Abstract also in Chinese / Bibliography: leaves 102-104 / Thesis (M.B.A.)--Chinese University of Hong Kong, 1983

Summary in Chinese. / Thesis (M.B.A.)--The Chinese University of Hong Kong. / Bibliography: leaves 90-91.

No description available.

Thesis (M.B.A.)--University of Hong Kong, 1998. / Includes bibliographical references (leaf 79-82).

Thesis (M.B.A.)--University of Hong Kong, 1996. / Includes bibliographical references (leaf 92-93).

Thesis (M.B.A.)--University of Hong Kong, 1995. / Includes bibliographical references.

Thesis (M.B.A.)--University of Hong Kong, 1993.

This study aims to investigate the determinants of efficiency, profitability and stability in the banking sector across the world over the period 2005-2012. In this study, efficiency is measured using data envelopment analysis (DEA), which is divided into technical efficiency (TE), pure technical efficiency (PTE), and scale efficiency (SE). The profitability is represented by return on assets (ROA), return on equity (ROE), and net interest margin (NIM). Furthermore, the z-score and capital ratios are the main indicators for stability. The data includes 323 banks (43 Islamic, 242 conventional, and 38 socially responsible banks [SRBs]) from around the world, covering 37 countries. The statistical methods to find the determinants are ordinary least square (OLS) and fixed effects model (FEM). The data for this study was extracted from the Bankscope and World Bank databases. According to efficiency, the DEA measures demonstrate that socially responsible banks (SRBs) are the most efficient banks. This is due to the fact that SRBs management employ minimum inputs; one of the main characteristics of SRBs is the saving of resources (inputs). In contrast, the least efficient scores are achieved by conventional banks. As conventional banks have higher interest expenses to pay. In terms of Islamic banks, the larger banks were found to be more efficient. Furthermore, lending services are important to maximise outputs effectively. Additionally, efficiency in Islamic banks is influenced significantly by earnings. Islamic banks with higher capitalisation were found to be more efficient, and new Islamic banks operate better than older banks. Regarding the macroeconomic factors, countries with better market capitalisations include more efficient Islamic banks. Based on the conventional banks’ findings, banks with a higher size performed better than the smaller sized banks. The loans profits increased the efficiency significantly. Focusing on age, the more recent banks achieve better efficiency scores. The three types of ownership (foreign, domestic, and public) reflect inverse correlations with DEA. With regards to the external variables, the wealth of the country is highly important in terms of efficiency. In addition, stock market growth supports the efficiency positively and significantly, while inflation and the global financial crisis (GFC) influenced the efficiency negatively and significantly. Concentrating on SRBs, banks with more capitals operated more efficiently than lower capitalised banks. Additionally, GDP, inflation and market capitalisation enhanced efficiency significantly. Overall, the relationship between the control of corruption and efficiency is positive and significant in Islamic, conventional and socially responsible banks. Tighter controls on corruption have led to better efficiency. Regarding the profitability, the highest ROA and ROE were attained by conventional banks. This is because the main aim for conventional banks is to achieve returns, and charging interest maximises their earnings. On the other hand, SRBs scored the lowest ROA and ROE as those banks are primarily concerned with providing social and environmental services over profits. According to NIM, Islamic banks do not have interest expenses, which can allow them to score the highest NIM measures in this study; while conventional banks have the minimum NIM ratios due to higher interest expenses. Based on the Islamic banks’ results, Islamic banking was affected positively by total assets of banks. In addition, the stable Islamic banks achieved greater profits based on the strong associations between z-score and earnings. This contradicts the relationship between profitability ratios and capital ratios, which indicate negative and significant correlations. Depending on country-specific factor, Islamic banks in higher productivity countries could not exploit the growth to gain higher profits. This results in a weakness for Islamic banks in terms of being resistant to higher inflation rates. For the conventional banks, size of bank and capital are highly important for profits. The conventional banks can concentrate on providing more loans to maximise their returns. The stability of conventional banks also has positive and significant associations with profitability ratios. Concerning the SRBs, profitability ratios are affected significantly and positively by stability (z-score) and market capitalisation growth. On the other hand, foreign, domestic and public ownerships negatively impacted the profits. According to industry-specific variables, GDP growth reduces profits significantly. For the stability, SRBs are demonstrably the most stable and resilient system against financial crisis. Accepting more deposits and attaining greater profits significantly increase the stability of all banks and lower the risk of insolvency. Overall, listed banks were found to be more efficient, profitable, and stable than unlisted banks. This study helps managers and policy makers within the banking sector to reduce costs and increase profits with lower risks. In addition, finding the positive determinants allows managers to make more decisions based on positive factors. On the contrary, through raising efficiency, profitability and stability in banking, managers can aim to avoid negative variables altogether. Finally, this study contributes to the literature in terms of adding socially responsible banks into the equation. In addition, comparing efficiency, profitability and stability simultaneously is a new method that can allow bankers to build effective strategic decisions based on the determinants.

No description available.