Joint-stock Banks Research Articles

Research on the Impact of Internet Finance on the Efficiency of Chinese Commercial Banks

This paper selects 15 Chinese commercial banks as the research sample, using stochastic frontier approach, setting Trans-log Production Function. The paper firstly measures the efficiency of commercial banks, and the results show that the efficiency level of Chinese commercial banks is on the rise from 2007 to 2016, and the efficiency of state-owned banks is higher than that of joint-stock banks. Secondly, the paper studies the influence factors of the efficiency of Chinese commercial banks in the view of banks’ own factors, industry factors, Internet financial development factors. The results show that the non-performing loan ratio level and the Internet financial development are negatively related to the bank efficiency, and competition of market is positively associated with the bank efficiency, and the structure of property rights will also significantly affect the performance of commercial banks.

THE EFFECTS OF COMPETITION ON EFFICIENCY: THE VIETNAMESE BANKING INDUSTRY EXPERIENCE

Given considerable changes in the Vietnamese banking environment brought about by significant reforms towards liberalization during the last two decades, this study investigates the evolution of competition and efficiency, compares the competition and efficiency of state-owned banks to joint-stock banks, and then tests the “quiet life” hypothesis in this industry over the period 2000–2014. This study employs the efficiency-adjusted Lerner index (i.e., market power) to capture competition, and the cost efficiency estimated by a Fourier-flexible function stochastic frontier analysis (SFA) to capture bank efficiency. This study firstly finds a slight improvement of competition and cost efficiency in the Vietnamese banking sector over the analysis period. Secondly, there are no significant differences in competition and cost efficiency level between state-owned and joint-stock banks. Thirdly, a positive causality running from competition to cost efficiency is documented, providing evidence of supporting the “quiet life” hypothesis. Finally, positive efficiency effects of the banks’ capital ratio and size are found, while insignificant impacts of the growth of GDP per capita and 2007 global financial crisis were observed. The results are strongly robust to a variety of tests. The findings suggest pro-competition, pro-capitalization and pro-size expansion policies in the Vietnamese banking sector if targeting at improving the cost efficiency of Vietnamese banks.

Constructing Corporate Identity before the Corporation: Fashioning the Face of the First English Joint Stock Banking Companies through Portraiture

This article considers how the joint-stock banks established trust within the local marketplace. We undertake a new investigation of pictures of senior bank management. Building on the expansion of the art market in the nineteenth century, joint-stock banks used portraits as a public and visual mechanism to commemorate their successes and accomplishments. Portraiture, as a well-established art form, provided enterprises with a historical legacy that for many did not, as yet, exist. Through the use of portraiture, banks attempted to solidify their identity and add to the sitter’s social standing, as well as signal the new organization’s reputation for high culture, prestige, and professionalism to those who viewed these artworks. These illustrations personified the company and gave a human face to the early joint-stock economy.

How far does the apple fall from the tree? The size of English bank branch networks in the nineteenth century

After the Bank Charter Act in 1833, English banks could branch nationally without legal or geographical restriction. It has been previously thought that despite this freedom, early English joint-stock banks predominantly began as single units. Drawing upon a new data set, this article maps the growth of branch banking, the size of bank networks and their geographical location and spread. It demonstrates that banks pursued branching strategies energetically against the intentions of regulators and were successful in forming large and complex networks. However, ultimately, before 1880 the majority settled for local, district and multi-regional structures, as opposed to national structures.

Research on the Impact of Capital Adequacy Ratio on Monetary Policy Transmission of Our Country

The paper analyzes the quarterly data of 16 listed banks of our country from 2010 to 2015 by classification and applies panel data model to study the impact of CAR (Capital Adequacy Ratio) on monetary policy transmission of our country. The result shows that bank credit channel of monetary policy exists. Large banks play a leading role in bank credit channel of monetary policy trnasmisson of our country, CAR difference makes monetary policy exert heterogeneous impact on bank sectors and the bank with higher CAR is esaily affected by monetary policy. At last, based on the research redult, the paper proposes suggestions for guaranteeing smoothness of monetary policy bank credit transmisson channel. Meanwhile, it proposes that the financial supervision of large banks shall be distinguished from that of national joint-stock banks and city commercial banks.

Transition of Credit Organizations: Caste Bankers in Colonial India

This paper looks at the evolution of business practice of indigenous banking groups in colonial India. Specifically, it studies why in the early twentieth century, the Indian banking caste Nattukottai Chettiar moved from caste-based banking to joint stock banking. The paper argues that caste-based banking had two advantages over joint stock banking—caste-based monitoring of agents and reciprocity-based informal insurance within the caste. In the early twentieth century with the improvement of communication technology and expanding global trade, the caste banking lost both the edges. This prompted some of the caste bankers to move to joint stock banking. I provide a theoretical structure explaining the transition and provide evidence from archival and secondary sources in support of my theory.

Factors affecting net interest margin of joint-stock commercial banks in Vietnam

Factors affecting net interest margin of joint-stock commercial banks in Vietnam

The efficiency effects of bank mergers: An analysis of case studies in Vietnam

This paper employs Data Envelopment Analysis to examine the relative efficiency for Vietnamese banks from 2008 to 2015. Efficiency level is relatively high and remains stable over the examined period, suggesting the banking system is less affected by the global financial crisis. More specifically, technical efficiency and scale efficiency in Vietnamese banking is examined when controlling for problem loans. We suggest that controlling for the exogenous impact of problem loans is important for joint-stock banks. Furthermore, our results do not support the hypothesis that acquiring banks are more efficient than the acquired banks. The efficiency improved in majority of merger cases and was not related to acquiring bank’s efficiency advantage over its targets. Small-and medium- banks should be promoted in future acquisitions as a means to enjoying efficiency gains. Finally, there are mixed results on the extent to which the benefits of efficiency gains are passed on to the public.

Risk Spillover Effect of Chinese Commercial Banks: Based on Indicator Method and CoVaR Approach

This paper took the thirteen listed commercial banks in China as the research objects, and used the financial risk measurement method CoVaR to study the risk spillover effect of commercial banks. Firstly, we employed an indicator-method to study the systemic importance changes of the listed banks in the normal and risk periods. It is found that the systemic importance is always closely related to the size of bank’s assets. The application of Cluster Analysis on the indicator score showed that they were divided into two part: four state-owned banks and nine joint-stock banks groups. From the perspective of financial market risk spillover effect caused by relevance, the risk contributions of each bank to the bank groups were calculated by using the quantile regression and CoVaR approaches in two time periods. The results showed that not only the systemically important banks with big asset scale had great risk spillover effect, in the risk period, some of the smaller scale banks had a significant increase in the risk contribution, which would also become an important source of risk. From the normal period to risk period, the risk spillover effects of each bank were obviously enhanced, and the risk contagion between banks rose generally. Therefore, regulators should not only focus on large-scale banks, but also pay attention to those banks with high risk contributions.

Analyses of Operational Risk Measurement Models: Comparative Analysis for Chinese Commercial Banks

China has opened its financial market in 1990s. Since then banks have faced increasingly fierce competition. Banks of China have faced complex operational risks and suffered huge losses. Many studies have tried to solve out the causes of these embedded risks. However most previous studies have examined market risks, credit risks, and the types of liquidity. Most of them have focused on the management of banking risks. By combining with the regulation status of the operational risks of China`s commercial banks, we first analyze various methods mentioned in the prior studies. Additionally, we analyzed the operational risks, per se, of commercial banks of China. We find the relatively feasible way to prevent the operational risks. By making contrasts with alternative models of operational risks, we choose the basic indicator approach and the income-based models to test operational risks of commercial banks of China. For five commercial banks of China, income-based model appears to be able to cut the costs of operational risks. In terms of controlling the costs of operational risks, it is the income-based model that seems to outperform than the alternative. Also another aspect to be considered is Chinese commercial banks` capabilities of controlling operational risks. Our regression analyses provides that income based model is at least the best alternative for measuring operational risk in state. Further, the income-based model has its significance in the aspect that the operational risks have greater impact on net income of commercial banks than those of joint-stock banks of China.

The Determinants of Bank Interest Margins: A Short-term Funding Perspective

The net interest margins (NIM) is one of the key metrics for Banks, and for those who want to evaluate the performance of a bank’s investments. In this paper, the determinants of net interest margins of China’s financial institutions are investigated, while taking into account the effects of short-term funding and the presence of foreign banks. By distinguishing different shareholding structure and comparing the banks’ net interest margins before and after the banking liberalization, we find that both short-term funding and foreign bank presence have negative impacts on the net interest margins of Chinese domestic banks. The banking sector after the financial liberalization, especially the national wide banks, has better ability to manage the financial stress. The China Construction Banks(CCBs) and Credit Cooperatives suffer higher interest margin decline than State-Owned commercial Banks(SOBs) and Joint Stock Banks(JSBs). The national wide banks need to accelerate the business diversification and increase the intermediary revenue.

Cooperative versus Conventional (Joint-Stock) Banking In Europe: Comparative Resistance And Resilience During The Recent Financial Crisis

During the banking crisis of the 1990s, French cooperative banks emerged as more resistant and efficient than joint-stock banks, which enabled them to improve their market share and increase their reserve capital. This subsequently became the keystone of the external restructuring that led to the transformation of cooperative banks into large universal banking groups. At the time, their competitive advantage relied mainly on a different approach to risk-taking, which was associated with their cooperative legal form and their specific governance model.However, the same features have clearly not prevailed during the financial phase of the most recent crisis. Whereas governance models in the banking sector have been deeply questioned, the original cooperative model has evolved differently within European countries, with a high level of hybridization in some and a very diffuse cooperative network in others. Some European cooperative groups have been damaged by the crisis, mainly because of the corporate and investment banking that formed part of their activity.Yet the recent crisis has revealed the importance of a resistant and resilient worldwide banking system and the diversity of legal forms and organizations could contribute to achieving this goal. In this paper, we assess the resistance and resilience of major joint-stock banks during the crisis and compare them to cooperative banks in different European countries and Canada. We conduct our analysis at an aggregated/consolidated level for these two categories of banks. Using different indicators (e.g., z-score, loans to the economy, return on equity) as dependent variables, we verify whether the cooperative form is synonymous with greater resistance or resilience, and whether the results may be explained by different organizational schemes in cooperative banking.

The performance of the Chinese banking system before and after the WTO entry

Purpose – The purpose of this paper is to examine the effects of China’s accession to the World Trade Organization (WTO) in January 2002 on the efficiency levels, efficiency components (technological change and scale economy), and efficiency determinants of Chinese banks. Design/methodology/approach – This study employs a two-stage stochastic frontier analysis to estimate efficiency and its components and identify the efficiency determinants. Findings – Chinese banks did not benefit from technological change and scale expansion in reducing costs in the pre-WTO period, but the reverse occurred in the post-WTO period. Chinese banks benefited from technological change in increasing profits to a lower degree in the post than the pre-WTO period. Cost efficiency declined while profit efficiency improved after China’s accession. Security investments positively drove profit efficiency in both pre- and post-WTO periods. There was an efficiency gap between joint-stock banks and state-owned banks in the pre-WTO period, but this gap disappeared in the post-WTO period. Economic freedom was related negatively to cost efficiency and positively to profit efficiency in the pre-WTO period, but opposite relations occurred in the post-WTO period. Practical implications – These findings appear to favour gradual liberalisation in the Chinese banking system, gradual removal of restrictions on foreign banks, certain shift from non-security investments to security investments, technology investment and scale expansion. Originality/value – This is the first study investigating the impact of the WTO on the efficiency, technological progress, economy of scale and efficiency determinants in Chinese banks.

The Efficiency Effects of Bank Mergers: An Analysis of Case Studies in Vietnam

This paper employs Data Envelopment Analysis to examine the relative efficiency for Vietnamese banks from 2008 to 2015. Efficiency level remains relatively high and stable over the examined period, suggesting the Vietnamese banking system is less affected by the global financial crisis. More specifically, technical efficiency and scale efficiency in Vietnamese banking in 2008 is examined when controlling for problem loans. The findings suggest that controlling for the exogenous impact of problem loans is important in Vietnamese banking, especially for the joint-stock banks. Furthermore, evidence from the bank merger cases studied does not support the hypothesis that acquiring banks are more efficient than the acquired banks. The efficiency improved in majority of merger cases and was not related to acquiring bank’s efficiency advantage over its targets. Small- and medium-banks should be promoted in future acquisitions as a means to enjoying efficiency gains. Finally, there are mixed results on the extent to which the benefits of efficiency gains are passed on to the public.

Distilling private information from plain-vanilla options to predict future underlying stock price volatility: Evidence from the H-shares of Chinese banks

Deviations from put-call parity may arise in response to private information that a select group of investors possess. From a practical perspective, if one possesses private information, using options to speculate or hedge amplifies potential gains given the leverage embedded in options with respect to price changes in the underlying asset. In light of this, and if we assume that the average investor does not possess private information, it is perhaps possible though to infer such information through implied variance spreads and use it to predict future volatility in the underlying asset. In this piece I examine the extent to which such information is economically informative in predicting the intraday return variability of H-shares issued by China's state and joint-stock banks, respectively. Generally speaking, I uncover the following; firstly, call-put implied variance spreads are mean-reverting across time. Secondly, at any given point in time, the magnitude of the deviation from put-call parity is informative in predicting rises in future spot price volatility. Thirdly, straddle/strangle trades predict, at times one week in advance, rises in future spot price volatility. These findings hold after controlling for market-wide implied volatility, the flow and shock in information disseminating to the market, and implicit transactions costs.

Bank reforms and efficiency in Vietnamese banks: evidence based on SFA and DEA

ABSTRACTThis study examines the cost efficiency of Vietnamese banks from 2000 to 2014 in the first stage, and the selection and dynamic effects of two governance reforms, foreign partial acquisition and listing on the stock exchange, on the efficiency in the second stage. Empirical results from the two-stage Stochastic Frontier Analysis (SFA) are highly consistent with those from the two-stage Data Envelopment Analysis (DEA) . Specifically, the first-stage efficiency estimation indicates that the cost efficiency shows a slightly upward trend over the period 2000–2014, with the cost efficiency score being 0.93 and state-owned banks outperforming joint-stock banks (JSBs). The mixed process seemingly unrelated regression estimator which controls the potential endogeneity of public listing and foreign acquisition in the second stage shows that selection effects occur in the Vietnamese banking system: banks selected by the strategic foreign investors for partial acquisition and banks selected for public listing are more cost-efficient than those not selected. The short-term and long-term dynamic effects of foreign partial acquisition are documented: the cost efficiency of the Vietnamese banks post-partial acquisition is lower than prior-partial acquisition, and it experiences a decreasing trend since partial acquisition. However, the short-term and long-term dynamic effects of public listing are not evidenced: the cost efficiency of the banks after public listing is not statistically different from that before public listing, and it also reveals an unclear trend since public listing.

Customers experience and problem resolutions in retail banking. Some empirical evidence from Italian banking

Currently, few studies have investigated how bank-specific determinants affect customer experience in retail banking. The objective of this paper is twofold: to provide a literature review about customer dissatisfaction in retail banking and to shed more light on different behaviours of banks regarding customer complaints. Our hypotheses are tested on a large sample of Italian banks on problem resolutions performance measured from 2012 to 2014, using bank-level balance sheets and appeals to Arbitro Bancario e Finanziario. We detected differences in the complaints management of different types of banks during turbulent financial market conditions. We compared bank size and bank legal form as possible sources of organisational friction studying their impact on the likelihood of customer dissatisfaction. Our findings highlight that, the small banks and cooperative banks are less inclined to have retail customers with dissatisfaction than large banks and joint-stock banks.

Nhận dạng các yếu tố hình thành văn hóa doanh nghiệp tại Ngân hàng TMCP Xuất Nhập Khẩu Việt Nam - Chi nhánh Cần Thơ

The main purpose of this research is to identify the constituent elements of corporate culture in Vietnam Export Import Commercial Joint-Stock bank - Can Tho Branch. The methods of data analysis including descriptive stastistics, Cronbach’s alpha test, exploratory factor analysis (EFA), confirmatory factor analysis (CFA) were used. Result of CFA indicates corporate culture in Vietnam Export Import Commercial Joint-Stock bank - Can Tho Branch is constituted of the elements: learning, clients care, agreement, adaptability, and strategic orientation.

Non-performing loans, moral hazard and regulation of the Chinese commercial banking system

Abstract Non-performing loans (NPLs) represent a major obstacle to the development of banking sector. One of the key objectives of the banking sector reforms in China has therefore been to reduce the high level of NPLs. To do so, Chinese regulatory authorities have injected significant capital into the banking system and scrutinized NPLs since 2003. This paper examines the impact of NPLs on bank behavior in China. Using a threshold panel regression model and a dataset covering 60 city commercial banks, 16 state-owned banks and joint-stock banks, and 11 rural commercial banks during 2006–2012, we test whether lending decisions of Chinese banks exhibit moral hazard. The results support the moral hazard hypothesis, suggesting that an increase in the NPLs ratio raises riskier lending, potentially causing further deterioration of the loan quality and financial system instability. Policy implications of findings are evaluated.

The Evolution of Organizational Diversity in Banking: Savings Banks’ Consolidation and Sector Coordination in France and Italy, 1980–2012

Savings banks were a key component of the banking industry in Western European countries in the early 1980s – a distinct, not-for-profit form of banking organizations existing alongside joint-stock banks. After 1980, three decades of banking consolidation and pro-market regulatory reforms were widely expected to make savings banks disappear. Yet, in some countries at least, savings banks have survived, as persistently distinct organizational forms. Moreover, in countries as similar as France and Italy, organizational diversity as epitomized by the survival of savings banks has taken two apparently diverse routes. To solve this double puzzle, this article builds on the “new organizational synthesis” in organizational theory and on the comparative neo-institutional literature, and draws on a comparative case study analysis of savings banks consolidation in France and Italy, from 1980 to 2012. The study contributes to the literature on the co-evolution of institutions and organizations by focusing on meso-level coordination and fully incorporating the relevance of state actors and policies in the analysis of organizational change.