Abstract

This article attempts to clarify existing doubts with respect to the performance of private and privatised banks versus public banks; that is, it is an attempt to clarify the ownership–performance relationship. The analysis takes explicit account of the privatisation transformation, including its intermediary stage, and the status of the economy. The ownership–performance model is estimated using cross-sectional time-series data and is used to test the influence of ownership changes on performance. Alternative performance measures are considered. The empirical findings show that ownership transformation in the case of regional banks has resulted in improved performance, whilst the benefits in the case of major banks were not significant, even though these banks have become more competitive.

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