Choice Of Bank Research Articles

Impact of Financial Sector Opacity on the Capital Structure Choice of Asian Banks

This study investigates the role of market imperfections on the optimal capital structure choice of value maximizing banks, by investigating the impact of information asymmetry on bank liabilities. Random effects estimation (GLS) is used to test the effect of market imperfections on the capital structure of banks by employing 7 years of unbalanced panel data from the largest 15 countries of Asia based on GDP. The study finds evidence of specific individual characteristics impacting the capital structure of Asian banks. However, banking sector market imperfections are also found to play a major role in the capital structure choice of banks. In the presence of a high level of information asymmetry between the bank and the depositor, the bank retains a lower than optimal capital ratio. Transparent banks may be successful in achieving the optimal leverage, consequently lowering their capital cost. Evidence suggests a need to reduce banking sector opacity regarding their risk exposures. To ensure banking sector stability, stronger capital requirements need to be imposed on banks in those Asian countries where information asymmetry is high. The limitations of the study include limited data and the choice of information asymmetry proxies. Future research can address this limitation by employing additional proxies for information asymmetry and increasing the number of countries.

Similarities and Differences in the Underlying Factors Influencing Male and Female Students of Technical Universities in the Choice of Banks: Evidence from Takoradi Technical University, Ghana

Similarities and Differences in the Underlying Factors Influencing Male and Female Students of Technical Universities in the Choice of Banks: Evidence from Takoradi Technical University, Ghana

Factors Affecting the Choice of Banks: Do Bank's Interest Rate, Employee Image and Brand Matter?

Factors Affecting the Choice of Banks: Do Bank's Interest Rate, Employee Image and Brand Matter?

Doing Good or Avoiding Evil? An Explorative Study of Depositors’ Reasons for Choosing Social Banks in the Pre and Post Crisis Eras

The global financial crisis is expected to be of great relevance for social banks’ growth of deposits. However, it is still unclear why depositors choose social banks in general, and how the global financial crisis has affected depositors’ choice of social banks. The present paper thus explores a comprehensive set of reasons for choosing social banks, the individual relevance of reasons, as well as differences before and after the global financial crisis. Data was collected through a survey of five social banks, interviews with nine industry experts, and an online survey with 108 social and 413 conventional depositors. Using content analysis, a multi-level system of reasons for choosing social banks was identified, which refers to the social banks’ “good” and conventional banks’ “evil” characteristics. Based on a frequency analysis of codings per category, reasons with potential superior relevance for depositors’ decision-making were explored. A comparison with reasons for choosing conventional banks imply that depositors’ reasons for choosing social banks differ from those for choosing conventional banks in general. The results also indicate that the global financial crisis might have helped social banks’ growth by attracting new customer target groups, who chose social banks because of conventional banks’ “evil” characteristics.

SOCIO-DEMOGRAPHIC VARIABLES FORMING A PERCEPTION OF CORPORATE IMAGE BRAND IN THE CROATIAN BANKING INDUSTRY

The banking industry is currently at the forefront of the development of technolo¬gy-based service delivery, and the survival of banks depends on their ability to deal with the environmental challenges. Due to these challenges, many banks are faced with an identity crisis and increased customer migration rates that negatively affect the levels of business profitability. Croatian market ads additionally challenge almost 30 banks currently operating with customers that are extremely price sensitive. Research shows that in the banking sector, a favorable image is considered a critical aspect of a company’s ability to maintain its market position, as the image has been related to core attributes of organizational success. This paper studies the dimensions of corporate image, focusing on the corporate image concept in the Croatian banking industry as perceived by consumers and its possible impact on their choice of banks. The purpose of this study is to give an insight and provide a deeper understanding of how the banks, by developing a strong and consistent corporate image using corporate communication activities, ensure a long-term source of sustainable competitive advantage and influence on customers’ end choice. A study was carried out in Croatia during 2019 using 250 respondents-consumers who used different types of banking services in different banks. Series of ANOVA analysis shows how the perception of the corporate image of the bank and its influence on the customer’s choice of the bank, bank loyalty and the quality of the bank services varies depending on some demographic and social variables. Results pose implications for bank communications and service positioning within customer segments. This research raises ideas for future studies as well.

Determinants of capital structure of banks: evidence from the Kingdom of Saudi Arabia

PurposeThe purpose of this study is to investigate the most important factors that affect the capital structure of commercial banks in the Kingdom of Saudi Arabia.Design/methodology/approachThis study uses annual data of 11 Saudi commercial, national banks listed on the tadawul Saudi stock exchange for the period 2010–2017. Data was collected from the banks financial statements, tadawul annual publications and Saudi Arabian Monetary Authority. By constructing a balanced panel, this study uses pooled ordinary least squares regression along with fixed effects and random effects to examine the relationship between the bank’s book leverage as the dependent variable and bank-specific explanatory variables that include profitability, tangibility, earnings volatility, growth opportunities and bank size, while controlling for macroeconomic conditions.FindingsThe findings of this study suggest that banks in Saudi Arabia are highly leveraged, endorsing the fact that the nature of banks’ business is different from non-banking firms. Earnings volatility, growth and bank size show positive and significant relations with book leverage. Profitability and tangibility are negatively related to the book leverage. Empirically, the explanatory variables profitability, earnings volatility, tangibility, growth and bank size have material effects on the capital structure decisions of Saudi commercial banks. In summary, the determinants of capital structure for Saudi banks are the same as those of non-financial firms but are distinctive in nature.Research limitations/implicationsAn extensive study on all the banks operating in Gulf Cooperation Council (GCC) countries is suggested.Practical implicationsThe findings have practical implications for bank managers, which will help them to identify the bank-specific factors affecting the capital structure and choose the values enhancing optimal capital structure. The results of this study can assist regulatory agencies to formulate an effective regulatory framework. Moreover, the findings lay a foundation for the development of financial sector under the umbrella of the Vision 2030 program in the Kingdom.Originality/valueTo the best of the authors’ knowledge, this is the first study to explore the factors affecting the capital structure choices of commercial banks operating in the Kingdom of Saudi Arabia. Moreover, the findings of the study would prove useful in detailed studies of capital structure in the GCC countries as well.

Evaluating European Bank Efficiency Using Data Envelopment Analysis: Evidence in the Aftermath of the Recent Financial Crisis

This paper seeks to contribute to the analysis of bank efficiency in the European Union during the aftermath of the international financial crisis that began in 2007, using data envelopment analysis and a sample of 485 banks from all European Union member-states between 2011 and 2017. The results confirm the existence of bank inefficiency, mostly due to inefficient managerial performance and bad combinations of bank inputs and outputs. The existence of bank inefficiency is particularly relevant during this period as European Union countries faced not only financial imbalances but also imbalances in their public budgets. Some were even obliged to request international financial assistance to overcome the deep financial and sovereign crises. Additionally, there was evidence of appropriate scale production and dynamic technological changes during the interval. Moreover, the panel estimates explaining bank total factor productivity changes suggest the choices of banks in terms of fixed assets, profit-before-taxes-to-average-assets ratio and off-balance-sheet-items-to-total-assets ratio contributed positively to productivity changes. The impaired-loans-to-equity ratio and bank interest margins were not in line with the total factor productivity changes of the European Union banking sector.

Economic policy uncertainty and bank liquidity hoarding

We examine the impact of economic policy uncertainty (EPU) on bank liquidity hoarding. We create a comprehensive measure of bank liquidity hoarding that takes into account asset-, liability-, and off-balance sheet activities. Using over one million bank-quarter observations, we find that in response to EPU, banks hoard liquidity overall and through all three components. This behavior is more pronounced for banks with less liquidity, more peer-bank spillover effects, and more EPU exposure. Additional analyses of interest rate spreads on several bank products suggest that our findings reflect at least in part bank choices, rather than just the reactions of customers.

Designing Dealer Compensation in the Auto Loan Market: Implications from a Policy Experiment

We study the design of dealer compensation policy in the indirect auto lending market, where most lenders give dealers the discretion to mark up interest rates. To protect consumers from potential discrimination by the dealer discretion, several banks switched to a new compensation scheme by fixing the markup as a percentage of the loan amount. We document that the market share of these banks responded positively (negatively) in the consumer segment where the policy increased (decreased) the interest rate — a reversal of the usual demand curve — which highlights the influence of dealers on the bank choice for financing loans. Accordingly, we develop and estimate an empirical model that allows for dealer–consumer bargaining, which depends on both the dealers' and the consumers' utility. Based on the estimation results, we explore alternative compensation policies that also eliminate dealers' discretion. We show that a lump-sum compensation that pays dealers a fixed dollar amount per loan dominates the current policy for the banks in terms of gaining market share. This is because dealers' equivalent markup rates would better align with their bargaining power. Our study highlights the importance of accounting for the interests and bargaining power of middlemen in designing a compensation scheme.

Determinants of Customers’ Bank Selection Decision in the Mfantsiman Municipality of Ghana

The prominence of financial institutions in the development of an economy is well established. In Ghana various reforms in the financial sector have made the Ghanaian banking industry an intensely competitive proposition. This study, investigated the determinants of customers’ bank selection decision in the Mfantseman Municipality in Ghana. A descriptive cross-sectional survey research design was employed for the study. Data was acquired using self-administered questionnaires from bank customers. Multinomial logistic regression statistical method was used to analyse the data. The findings disclosed a significant relationship between customers’ choice of bank and advertising, branding, distance to bank location and types of electronic product offered by banks. It was recommended that banks should embark on aggressive advertising campaign on the benefits of their products and services, improve upon their brand image and financial stability. Banks should also come out with more electronic products that are relevant to the changing needs of potential customers. Keywords: Selection Decision, Branding, Advertising, Location, Electronic Products, Banks DOI: 10.7176/EJBM/12-28-03 Publication date: October 31 st 2020

Corporate Financing Choice and Financial Performance of Banks in Nigeria: Return on Assets Measurement Approach

Corporate Financing Choice and Financial Performance of Banks in Nigeria: Return on Assets Measurement Approach

Bank runs, portfolio choice, and liquidity provision

We examine the portfolio choice of banks in a micro-founded model of runs. To insure risk-averse investors against liquidity risk, competitive banks offer demand deposits. We use global games to link the probability of a run to the bank's portfolio management. Based upon interim information about risky investment, banks liquidate investments to hold a safe asset. This partial hedge against investment risk reduces the withdrawal incentives of investors for a given deposit rate. As a result, (i) banks provide more liquidity ex ante (so banks offer a higher deposit rate) and (ii) the welfare of investors increases. Our results highlight the management of both sides of a bank's balance sheet and a complementarity in the two forms of insurance that banks provide to investors.

Brand Equity of Commercial Banks - A Study from Customers' Perspective of ACB in VN

In the banking sector, the brand is a strong intangible asset of a bank that makes the differences and increases the chances of success. Banking services is changing rapidly as customers becomes more demanding, and the markets more competitive. Customers’ decision on banking choices is not only tangible with physical factors but also psychological and emotional factors. This paper aims to study a model of brand equity of commercial banks in Vietnam, from the perspective of customers and the proportion of its components contributed to the value of the brand equity. The findings potentially indicate that “Brand Image” is the most important component of “Brand Equity”. Therefore, commercial banks should develop strategies to promote the bank's brand image, conveying the bank's intrinsic value to customers.

Bank Resolution and Multinational Banks

This paper studies the impact of different resolution policies on the choice of banks to expand abroad. The regulator can choose to resolve banks through bail-in or bail-out or a combination of the two. The choice of the regulator affects the cost of funding of banks, endogenous in the model. We study the relative profitability of alternative bank corporate structures, either multinational (large and diversified) or domestic (small and non diversified) for different levels of public support. Our model allows us to identify the potential impact of the resolution policy on the structure of the banking system. Lower levels of public support increase the cost of funding for all banks, in line with recent empirical evidence. We show that a reduction in the level of public support (from bail-out to bail-in) induces banks to expand abroad in search for alternatives to save on their funding costs. Finally, we are able to identify the optimal resolution mix by taking into account the reaction of banks to the policy.

Bank Attribute Factors in Determining Customers’ Choice of Commercial Banks

The paper aims to identify the factors influencing customers the choice of commercial banks in Nepal. Banks mainly earn from customer deposits, so they influence customers to open bank accounts by providing different services. The study seeks to analyse the impact of different variables (reputation, service quality, financial gain, convenience, group influence, information availability, and physical facilities) on the customers’ choice of the bank. Based on descriptive and inferential research designs, the study made use of primary data collected through a structured questionnaire surveyed successfully on 150 customers having accounts in different commercial banks. Descriptive analysis shows the highest mean score in convenience, it urges banks to focus on providing easy access to their services. By using correlation and regression, the study discovered that reputation, service quality and financial gain have influenced customers to choose banks. Among the three variables measured, reputation made the strongest influence on customers' choice of the bank, whereas group influence and information availability had no impact.

Non-performing Loans and Moral Hazard in the Indian Banking Sector: A Threshold Panel Regression Approach

This article attempts to examine the effect of non-performing assets (NPA) on behaviour of banks in India. The objectives of this article is to test if lending choices of Indian Banks demonstrate moral hazard and to test whether an increase in NPA ratio of banks raises riskier bank lending. We employ a threshold panel data regression model on a data set retrieved from the Reserve bank of India, which covered 45 commercial banks during the period 2009–2015, to test if lending choices of Indian banks demonstrate moral hazard. The results establish that the moral hazard hypothesis does not hold true for the given sample of India Banks, suggesting that an increase in the NPA ratio does not potentially increase riskier lending in sample banks. We find empirical evidence for the notion that ‘too-big-to-fail’ banks possibly have certain incentives to take higher risks and thus have higher NPA ratios. Graphical approach to NPA threshold explanation reveals presence of threshold; however, it could not be statistically established. Future implications of findings are evaluated. The study seminally adds to the empirical literature on use of fixed effects threshold panel data regression model in the context of Indian banks.

Where to get Donor Breast Milk? Self-Reported Parental Motivations and Concerns Regarding the Choice of Informal Milk Sharing versus Milk Banks

Where to get Donor Breast Milk? Self-Reported Parental Motivations and Concerns Regarding the Choice of Informal Milk Sharing versus Milk Banks

Where to get Donor Breast Milk? Self-Reported Parental Motivations and Concerns Regarding the Choice of Informal Milk Sharing versus Milk Banks

Introduction: The American Academy of Pediatrics (AAP) recommends exclusive breastfeeding prior to 6 months of age. However, many women are unable to produce enough milk to exclusively breastfeed their child and, thus, supplement infant diets with formula or donor breast milk (DBM). Though DBM is the ideal supplement to comply with AAP guidelines, it is often difficult for parents to obtain DBM safely from milk banks (MBs) and they are increasingly turning to informal “mother-to-mother” milk sharing (IMS) instead. Though this practice is discouraged by the AAP as it is potentially unsafe, few studies have …

SMEs and their bank choices: trust-related factors or economic calculations?

PurposeThe authors investigate the factors affecting the decision of small and medium-sized enterprises (SMEs) to do business with either small local banks or large commercial banks.Design/methodology/approachWe combine various data sources on Polish SMEs, including their financial statements, county-level data on SMEs' local environment, information about bank branch locations, as well as a new survey on the specificity of bank–firm relationships. We employ the logit and Tobit models.FindingsSMEs' bank choices and the length of a bank–firm relationship are more strongly associated with trust-related factors, rather than transactional ones. SME managers motivated by trust-related factors are more likely to choose local lenders and maintain long-term relationships with them. However, as firms grow and mature, SME managers lean toward banks adopting transaction-oriented policies.Research limitations/implicationsWe could have drawn a more detailed picture of the bank selection process had we been able to compare the traits of a firm's current and previous banks.Practical implicationsThe study shows that the features of a bank's offer, including product prices, have limited potential in shaping long-term relationships between banks and SMEs.Originality/valueThe topic of bank selection by SMEs has not been thoroughly investigated in the case of Central European countries. We address this gap by comparing two types of potential drivers of bank selection: trust-related factors and a set of purely economic (transactional) motives.

“PELATIHAN MOTORIK ANAK DAN PEMANFAATAN LIMBAH DAUR ULANG UNTUK MEMBUAT CELENGAN DENGAN ORIGAMI” (RPTRA DHARMA SUCI)

Recycling is one of the efforts that can be done to save the environment and can be a fun activity to do together. There are so many benefits that can be extracted from recycling activities and of course it will be very valuable for children. 3R (reduce, reuse, recycle) is an innovation in order to provide learning media for early childhood. In addition to learning to take advantage of children's recycling waste, the purpose of this training is also to learn how to sharpen the motor by adding origami elements to the recycling work in the form of piggy bank that has been made. This study uses a collaborative and participatory action research method (PAR), which is a research activity carried out by involving the community so that they feel that they have a stake in the activity program and intends to participate actively in solving community-based problems. This study uses respondents of children aged 7-9 years who are from the Dharma Suci RPTRA located in North Jakarta. The results of this study show that children give positive responses in the development of fine motor skills by making hand movements cutting, sticking and folding. The selection of used milk boxes is quite appropriate, because most of them see and have used milk boxes in each respondent's house. Children love the theme of endangered animals because, these animals are not animals that they can see everyday. The choice of piggy bank as a form of processed processed goods made them enthusiastic to start saving early.
 Keywords: Children’s Motor, Recycling, Origami