Financial Holding Companies Research Articles

Exploring the influence of fintech patents on operation efficiency and market efficiency in Taiwan's commercial banking sector‐meta entropy dynamic two‐stage DDF model

AbstractThis paper presents a meta entropy dynamic two‐stage DDF model, incorporating significant patents in financial technology (fintech) into the analysis to examine the operational and market efficiencies of banks in Taiwan, providing new insights for research on banking performance and government policy. The results show the following. (1) The most efficient bank is Cathay Financial, while the bottom three are First Financial, E.SUN Financial, and Hua Nan Financial. (2) Financial holding companies (FHCs) outperform non‐FHCs in both operational and market stages. (3) The number of patents has a positive impact on the market stage efficiency of banks.

Efficiency evaluation of Taiwan’s commercial banks after IFRS adoption: A two-system network data envelopment approach

The objective of this study is to assess the operational efficiencies of Taiwanese commercial banks from 2013 to 2022, following the adoption of the International Financial Reporting Standards (IFRS) in 2013. This study introduces an extended non-convex two-system network data envelopment analysis (DEA) model, which decomposes the production process into two sub-processes: profitability and marketability stages. Additionally, the study categorizes eighteen listed commercial banks into two groups based on their affiliation with financial holding companies (FHCs). The results of the Mann-Whitney U test reveal significant differences in both profitability efficiency and marketability efficiency between FHC banks and non-FHC banks. However, the overall efficiency of FHC banks does not differ significantly from that of non-FHC banks during the sample period. The empirical findings indicate that, on average, banks affiliated with FHCs outperform those not affiliated with FHCs in terms of profitability efficiency, with this effect being statistically significant. Conversely, FHC banks exhibit lower marketability efficiency compared to non-FHC banks. These results suggest that while FHC affiliation can enhance profitability efficiency, it may not necessarily improve marketability efficiency.

Inquiring the Extent of Contagion Risks of the Corporate Bonds on the Malawian Financial Holding Companies Subscribed Through Their Subsidiaries Licensed as Portfolio Managers 

Inquiring the Extent of Contagion Risks of the Corporate Bonds on the Malawian Financial Holding Companies Subscribed Through Their Subsidiaries Licensed as Portfolio Managers 

Leveraging TOGAF for Effective Enterprise Architecture Planning in Human Resource Management: A Case Study of A Financial Holding Company

Leveraging TOGAF for Effective Enterprise Architecture Planning in Human Resource Management: A Case Study of A Financial Holding Company

Two-Stage Evaluation of the Pre-merger Potential Gains of Taiwan Financial Holding Companies: Dynamic Network Slack-Based Measure Analysis Approach

Two-Stage Evaluation of the Pre-merger Potential Gains of Taiwan Financial Holding Companies: Dynamic Network Slack-Based Measure Analysis Approach

The Determinants of Financial Holding Company’s Profitability in Taiwan

<p>This paper aims to investigate the determinants of profitability of Financial Holding Company’s (FHC) based on the panel data of thirteen listed firms in Taiwan Stock Exchange. This study uses the data for the period from 2007 to 2017. To verify the efficiency of empirical results, the ordinary least squares (OLS) method in SPSS software is used to examine the relationship between internal and external factors and FHC’s profitability, which is measured by Return on Asset (ROA) in this study.</p> <p>The empirical results indicate that all variables in micro and macro-determinants in this study will significantly affect FHCs’ profitability. More precisely, in micro-determinants, there is a significantly positive relationship between the asset size, the total deposit to liability ratio and ROA. However, the relationship between total debt ratio, operation expenses to net sales ratio and ROA are significantly negative. In addition, in macro-determinants, the study concludes that the USD to NTD exchange rate, Gross Domestic Product, and money supply will have a significantly positive relationship with ROA.</p> <p> </p>

Comments on Taiwan's Draft Amendment to Article 65-2 of Financial Holding Company Act and Article 133-2 of the Banking Act: Starting from the Case of Mega International Commercial Bank Co., Ltd. Was Fined $180 Million by the New York State Department of Financial Services

Comments on Taiwan's Draft Amendment to Article 65-2 of Financial Holding Company Act and Article 133-2 of the Banking Act: Starting from the Case of Mega International Commercial Bank Co., Ltd. Was Fined $180 Million by the New York State Department of Financial Services

Original Sin of Major Shareholder: An Analysis of Draft Amendment to Financial Holding Company Act ＆ the Banking Act

Original Sin of Major Shareholder: An Analysis of Draft Amendment to Financial Holding Company Act ＆ the Banking Act

Reflections on Digital Transformation in Chinese Regional Financial Holding Companies

This article explores the necessity of digital transformation in Chinese regional financial holding companies, based on the background of their digitalization efforts. It discusses the requirements set by policies, the demand for sustainable development in company operations, and the impact of the pandemic on driving digitalization. By analyzing specific challenges faced in the digital transformation of regional financial holding companies, clear pathways for progress are proposed.

Discussion on the Enterprise Competitiveness of Taiwan’s Financial Holding Company with TOPSIS Method

TOPSIS evaluation method is the abbreviation of Technique for Order Preference by Similarity to Ideal Solution. It is a multi-criteria evaluation method developed by Yoon and Hwang (1981). This method can be used in n project A ={Ai│i=1,2,…,n}, and evaluate under m evaluation criteria C={Cj│j=1,2,…,m}. And the performance value of the Ai project in the Cj criterion can be measured in a quantitative way, so that an evaluation matrix can be constructed to determine the best plan selection. This article uses the TOPSIS method to explore the corporate competitiveness of Taiwan's financial holding companies, and objectively evaluates the order of operating performance of each financial holding company. According to the evaluation indicators selected for financial holding companies in this article, it is found that the top 5 financial holding companies for performance evaluation are China National Bills Financial Holdings (2889), Cathay Pacific Financial Holdings (2882), Fubon Financial Holdings (2881), CITIC Financial Holding (2891) and Development Financial Holding (2883), the results can be used as a reference for the financial industry's operating performance evaluation.

Banking regulation in the United States after the world economic crisis of 2007/2008: economic immunity or false hopes

Based on the Post-Keynesian approach, we argue that commercial banks, through the financial reforms of 1980 and 1999, which made financial institutions more flexible, increased their capacity to operate in the capital market by becoming Banking Financial Holding Companies. The 2007/2008 crisis is understood as a consequence of financial deregulation and financial innovation process that weakened the Federal Reserve's capacity to restrain banking activity. Initially, we discuss the new institutional context that emerged from these changes in the financial regulatory framework between 1980 and 1999. Then, we focus on how financial deregulation allowed banking business to advance in financial markets, how this process contributed to the economic crisis of 2007, characterized both as a liquidity crisis and a solvency crisis, safeguarded by the National States. Finally, we analyze the Dodd-Frank Law (2010), which is interpreted as the reaffirmation of this endogenous process of financial domination.

New Trend of Italian Tax Courts to Overrule IRAP Taxation of Dividends Received by Banks, Insurance Companies and Financial Holding Companies

In this note, the authors discuss two Italian cases wherein the lower courts, in response to a Constitutional Court decision finding that the EU Parent-Subsidiary Directive (2011/96) tax exemption for intra-group dividends extends to Italian regional tax on productive activities (IRAP), reversed IRAP taxation of dividends received by banks, insurance companies and financial holding companies.

The Concept of Financial Holding Companies in Mainland China from the Comparative Law Perspective

The Concept of Financial Holding Companies in Mainland China from the Comparative Law Perspective

Determinants of connectedness in financial institutions: Evidence from Taiwan

This study estimates the interconnectedness among financial holding companies (FHCs) in Taiwan to identify its determinants. Using the Diebold and Yilmaz's (2012) measure, we find that larger directional connectedness stems from state-owned FHCs, indicating their dominant role in transmitting systemic risk. In addition, we find that bank performance and monetary policy both play an important role in financial connectedness. Finally, we show that syndicated loans may affect interconnectedness because the arranger bank transmits systemic risk to other participating banks.

A Study on the Compulsory Share Exchange of the Financial Institutions on the Creation of the Financial Holding Companies

A Study on the Compulsory Share Exchange of the Financial Institutions on the Creation of the Financial Holding Companies

Value Creation Performance Evaluation for Taiwanese Financial Holding Companies during the Global Financial Crisis Based on a Multi-Stage NDEA Model under Uncertainty

In this paper, we use the multi-stage network slacks-based measure model under uncertainty to evaluate the performance of Taiwanese financial holding companies (FHCs) from 2007 to 2012. We conceptualize the value creation process to be a two-stage framework, as the profitability and the marketability stages with a serial-linkage relationship, in order to solicit more information from the value creation process of FHCs. Under this framework, the profitability stage can be further divided into banking, insurance, and securities profitability sub-stages. In addition, we further extend the proposed model mentioned above to not only incorporate the NPLs as the undesirable output in the banking profitability stage but also use the fuzzy set approach to process its uncertainty. Results indicate that the discriminatory ability of our model is higher when we simplify the variables in the model specification. We also find that all Taiwanese FHCs in that particular period were “inefficient performers”, which is mainly attributed to the weak profitability performance, especially in banking service. We postulate that the global financial crisis, the US subprime crisis in particular, had a negative effect on the value creation performance of Taiwanese FHCs; however, they gradually recovered and improved their performance after the crisis.

What determines the quality of remuneration policy in financial holding companies? An analysis based on the example of the UniCredit Group

This study seeks to examine the quality of the remuneration policy (RP) and identify its main determinants within a financial holding company (FHC) – the UniCredit Group. The results show that the quality of remuneration policy in the examined FHC was low. Although the dominant bank is characterized by high remuneration policy standards, the rest of the group is not. The empirical approaches used show that remuneration policy quality was positively related to the size of the bank and the transparency index of the remuneration policy, but negatively affected by the selected corporate governance determinants.

Impact of Corporate Governance on Financial Performance of Financial Holding Companies in Nigeria

The paper impact of corporate governance on financial performance of financial Holding Companies in Nigeria.The paper used corporate governance mechanism proxied by board size, board independence, board composition, board meetings and board number of committees on Return on Assets. Data were obtained from three financial holding companies in Nigeria Annual Reports for the period 2012 to 2019. A strongly balanced longitudinal time series data was employed for the analysis, while the Hausman test was conducted for selection of fixed or random effects. The random effect was chosen,and the results indicates that variables of corporate governance such as board size and board Independence have negative relationship with financial performance of Financial Holding Companies (Holdcos) in Nigeria. Board composition and Board Committees had positive nexus with financial performance of financial Holdcos . While board meeting had a negative effect on financial performance of financial Holdcos in Nigeria. Consequent upon the results obtained, the study recommends that the board size should be moderate, board members (executive, non-executive and independence) should be well experience and qualified as well as available to attend to its oversight functions. High frequency of meeting of the board should be restrained from as it may not necessarily engenders increase in financial performance. Also, Holdcos should have more Board Committees to ensure effective oversight as it leads to better financial performance.

A new value-based method for decomposing profit efficiency

Abstract Conventional profit and allocative efficiencies suffer from a critical deficiency if input and output prices are different between decision-making units (DMUs) in the market when assuming given uniform input and output prices under a homogeneous technology. Price differences and technology gap considerations are more relevant to firms in reducing profit loss under a non-homogeneous technology with non-perfect market competition. This study proposes a new value-based meta-profit inefficiency decomposition considering the presence of both a new technology gap and price inefficiency. As an illustrative empirical application, we present an example of 35 Taiwanese banks representing two types of banking organizations: financial holding companies (FHCs) and non-FHCs. The new decomposition we propose helps to identify the profit–loss due to group technical, group price, new technology gap and meta-mix inefficiencies of DMUs.

The New EU Regulatory Framework Governing the Approval and Consolidated Supervision of Financial Holding Companies and Mixed Financial Holding Companies

In 2019, the so-called “Capital Requirements” Directive 2013/36/EU (CRD IV) was amended by virtue of Directive (EU) 2019/878 (CRD V) in respect to several aspects, including the supervision of financial holding companies and mixed financial holding companies. The new rules apply from 1 January 2021. In accordance with the considerations set out in the CRD V, the key rationale for the introduction of novel elements was to lay down a specific approval procedure and direct supervisory powers over certain financial holding companies and mixed financial holding companies in order to ensure that such holding companies can be held directly responsible for ensuring compliance with consolidated prudential requirements, without subjecting them to additional prudential requirements on an individual basis. The following University notes, which briefly albeit systematically present the amendments inserted to the CRD IV in relation to financial holding companies and mixed financial holding companies, are structured in five Sections: Section A discusses the initial framework and the rationale for its enhancement and provides the definition of the terms financial holding companies and mixed financial holding companies. Section B presents then the provisions of the new Article 21a on the conditions for granting approval and the related exemptions, as well as on the decisions on the approval and exemption from approval, and the related transitional provisions. The new requirements relating to the management body and to internal arrangements, processes and mechanisms of financial holding companies and mixed financial holding companies are laid down in Section C. This is followed by Section D discussing the amendments inserted to Articles 11-118 CRD IV in relation to the principles for conducting supervision on a consolidated basis. Finally, the amendments to other related provisions of the CRD IV (including, inter alia, those on the enhanced powers of supervisory authorities, on cooperation arrangements and on the inclusion of holding companies in consolidated supervision) are discussed in Section E.