Large Commercial Banks Research Articles

Banking concentration, information sharing and women's political empowerment in developing countries

PurposeThis article analyses the effect of bank concentration on women's political empowerment in 80 developing countries over the period 2004–2020.Design/methodology/approachBanking concentration (BC) is measured by the assets held by the three largest commercial banks as a percentage of total commercial bank assets in a country. We use several indices to measure political empowerment, namely: the political empowerment index, composed of three indices (i.e. the women's civil liberties index, the women's participation in civil society index and the women's political participation index). The empirical evidence is based on the Ordinary Least Squares (OLS) and Fixed Effects (FE) techniques.FindingsThe following findings are established. Banking concentration reduces women's political empowerment. Furthermore, information sharing offices (i.e. public credit registries and private credit bureaus) mitigate the negative effect of bank concentration on women’s political empowerment. Information sharing thresholds that are needed to completely dampen the negative effect of bank concentration on women’s political empowerment are provided. Policy implications are discussed, notably: (1) that governments in developing countries increase competition by easing barriers to entry for potential banks, to facilitate the transition from confiscatory concentration to distributive concentration favorable to all stakeholders; and (2) information sharing offices should be consolidated beyond the established thresholds in order to completely crowd-out the unfavorable effect of bank concentration of women’s political empowerment.Originality/valueThe paper provides new empirical evidence that helps to advance the debate on the effects of banking concentration and information sharing in the banking sector on women's political empowerment in developing countries.

The Impact of Risk Management on Banks’ Profitability: A South African Perspective

Global research has shown that different risk management practices in banks and companies, in general, may significantly influence their profitability. This research paper investigates the impact of credit risk, liquidity risk and market risk in the banking sector in South Africa. It adds to the literature by improving the existing models and by exploring the impact of the coronavirus on the profitability of the same banks through the lens of risk management. The research used quantitative data collected from the six largest commercial banks in South Africa during the period (2013-2020),before Covid-19. Several panel regression models were developed to incorporate credit, liquidity, and market risks. The results showed that the primary determinant of bank profitability was the management of non-performing loans, implying that other financial risks may already be appropriately managed or diversified away in the South African context. However, banks and regulators should place more importance on evaluating the creditworthiness of their current and prospective customers.

Digital product development team external knowledge processes and ambidexterity: a multi-mediation analysis of the absorptive capacity framework

PurposeThe purpose of this study is to examine the mechanisms of absorptive capacity (ACAP) in the specific context of digital product development teams. More precisely, it explores the process of internalizing and utilizing external knowledge from sources outside the team to promote the development of innovative ambidexterity.Design/methodology/approachThe study employs the ACAP framework and directs specific attention to the concept of knowledge assimilation, encompassing comprehension, documentation and dissemination. Seventy-five employees of one of Indonesia’s largest commercial banks were surveyed about two initiatives they participated in. To this end, 12 research hypotheses are formulated, tested and analyzed using structural equation modeling.FindingsKnowledge comprehension, documentation and dissemination are found to mediate between knowledge acquisition and knowledge exploitation. At the same time, the relationship between knowledge acquisition and knowledge transformation is mediated by knowledge comprehension and dissemination, but not documentation. The authors also found that knowledge transformation positively mediates between knowledge comprehension and dissemination on the one hand and ambidexterity on the other hand. Importantly, knowledge exploitation negatively mediates between knowledge comprehension and documentation on the one hand and ambidexterity on the other hand.Originality/valueThis study contributes to the existing body of knowledge by offering nuanced insights into the interplay of knowledge assimilation processes within ACAP, particularly in the context of digital product development. The identification of mediating factors and their impacts on ambidexterity provides valuable implications for both theory and practice in this domain.

HETEROGENEOUS RESPONSES OF COMMERCIAL BANKS TO VARIOUS CLIMATE RISKS: EVIDENCE FROM 42 A-SHARE LISTED BANKS IN CHINA

Financial supervisors across the world recognize the threats posed by climate change. This research aims to examine the immediate impact of climate risks on bank returns using an event study methodology, with data from 42 A-share listed banks in China spanning the years 2012–2022. The findings reveal a delayed effect of climate risks on commercial banks. Hydrological disasters such as floods significantly reduce the returns of large state-owned, national joint-stock, and city commercial banks. Additionally, the launch of China’s carbon emissions trading market leads to a short-term decline in returns for national joint-stock banks, while rising loan exposure and weakening market sensitivity (MS), induced by climate change, reduce the returns of commercial banks. However, bolstering credit risk management proves effective in enhancing profitability. This study provides insights at the market level into the financial implications of climate change for banking institutions, supplementing existing evidence.

Risk spillover mechanism among commercial banks and FinTech institutions throughout public health emergencies

While FinTech has contributed to the improvement of efficiency and cost reduction for commercial banks, it has also brought about risks for them. Especially during the outbreak of major public emergencies, the degree of risk spillover among financial institutions increased significantly. In this paper, we constructed a high-dimensional risk spillover network using the elastic net shrinkage technique to investigate the impact of public health emergencies on the risk spillovers between FinTech institutions and commercial banks. The total spillover index was utilized to access the overall coupling between FinTech institutions and commercial banks. Furthermore, we employed the sectoral spillover index and institutional centrality index to examine the spillover intensity across different sectors and institutions. Additionally, we analyzed the changes in the risk spillover network structure and institutional risk role during emergencies, aiming to uncover the impact mechanism of public health emergencies on risk spillovers. The results reveal that (1) public health emergencies, such as the COVID-19 pandemic, have intensified the industry correlation between the FinTech and banking sectors, and the primary risks of the system have shifted from intraindustry risks to interindustry risks. (2) Public health emergencies have changed the risk transmission roles of FinTechs and banks. FinTechs transitioned from being risk recipients to risk contributors, while banks shifted from being risk contributors to risk recipients. (3) FinTechs play a crucial role in facilitating indirect risk transmission within the system, acting as influential adjacent institutions that bridge the gap between critical institutions. (4) Compared with large commercial banks, small and medium-sized banks are more sensitive to FinTech risks. This study provides supporting evidence for regulatory agencies to enhance risk management in financial innovation during public health emergencies and in the post-pandemic era.

Systemic Importance and Risk Characteristics of Banks Based on a Multi-Layer Financial Network Analysis.

Domestic and international risk shocks have greatly increased the demand for systemic risk management in China. This paper estimates China's multi-layer financial network based on multiple financial relationships among banks, assets, and firms, using China's banking system data in 2021. An improved PageRank algorithm is proposed to identify systemically important banks and other economic sectors, and a stress test is conducted. This study finds that China's multi-layer financial network is sparse, and the distribution of transactions across financial markets is uneven. Regulatory authorities should support economic recovery and adjust the money supply, while banks should differentiate competition and manage risks better. Based on the PageRank index, this paper assesses the systemic importance of large commercial banks from the perspective of network structure, emphasizing the role of banks' transaction behavior and market participation. Different industries and asset classes are also assessed, suggesting that increased attention should be paid to industry risks and regulatory oversight of bank investments. Finally, stress tests confirm that the improved PageRank algorithm is applicable within the multi-layer financial network, reinforcing the need for prudential supervision of the banking system and revealing that the degree of transaction concentration will affect the systemic importance of financial institutions.

Innovative Strategies in Historical Cost, Replacement Cost and Organisation Performance Using Human Resource

.Technology is being used in industry and services. Rapid technological advancements alter many industries. Information helps build and sustain the economy. Modern businesses' social responsibility and public image are evolving quickly. According to a recent national survey, many Americans believe corporations should be accountable to shareholders, workers, and local communities. These changes are not reflected in modern financial reporting. A strategy-language approach for comparing the two methods is needed. This method integrates strategies from seemingly unrelated innovation types and allows systematic strategic analysis. Large commercial banks could consider including human resource expenditures in their asset structure and improving information quality via revenue expenses, which might positively impact their share price. The "human resources valuation approach" as a company performance measurement tool has gained popularity, boosting the use of metrics in human resource accounting. More studies are exploring the relationship between performance and HR.

How does digital transformation affect the profitability of rural commercial banks?

Under the impact of the business sinking of large commercial banks and the cross-border competition of fintech companies, digital transformation has become a strategic priority for rural commercial banks. However, can digital transformation improve the profitability of rural commercial banks (PORCB)? This aspect has not been thoroughly examined in academic literature. This study utilizes unbalanced panel data from 54 Chinese rural commercial banks spanning from 2010 to 2021. The Peking University Commercial Bank Digital Transformation Index is employed to gauge the extent of digital transformation, while ordinary least squares estimation is used to examine its effect on the profitability of rural commercial banks and elucidate its underlying mechanisms. The findings show that: (1) Digital transformation can significantly improve the PORCB. (2) Digital transformation improves the PORCB by enhancing asset quality, operating efficiency and risk-taking. (3) The profitability-enhancing effect of digital transformation is more pronounced among rural commercial business banks with larger assets and lower equity concentration, as well as among state-owned rural commercial banks. This paper's findings represent a novel investigation into the correlation between digital transformation and the profitability of rural commercial banks. They offer a theoretical foundation and empirical evidence for future studies examining the economic implications of bank digital transformation, and offer valuable insights for enhancing the digitalisation of rural banks.

A legal analysis of open banking in the promotion of financial data antitrust in China

Abstract Open banking develops quickly in China where several large state-owned and private commercial banks have participated in open banking, but the legal foundation is insufficient. The theoretical basis of developing open banking lies in breaking down ‘Data Silos’ to promote the free circulation of data and strengthen competition in the financial data market. Open banking could promote ‘financial data antitrust’, which means reshaping the competitive landscape through promoting the share of monopolized financial data owned by large financial institutions to break their monopoly status in the financial market. It may also bring monopoly risks to financial institutions such as data aggregators and technology platforms. Based on the regulatory and legislative experience of other regions, China should continue the ‘government-guided’ model for developing open banking and pay more attention to protecting financial consumers and increasing their data control rights to better balance privacy protection and financial data sharing. China should set up a rule for ‘financial data right separation’ and formulate antitrust regulations for data aggregators. Based on the special status of Fintech platforms, China should not copy the open banking models of developed countries, but create a ‘two-way sharing’ open banking mechanism to prevent the risk of platform data antitrust.

Research on the Coordination of Bank Capital Adequacy Ratio and Monetary Policy

Capital adequacy ratio and monetary policy are important control measures of financial supervisory authority and monetary authority, respectively. The effective coordination of the two has greatly affected the effectiveness of monetary policy. The article selects the annual data of 16 listed commercial banks in China from 2003 to 2018, and studies the impact of capital adequacy ratio on monetary policy transmission by constructor. listed commercial banks in China from 2003 to 2018, and studies the impact of capital adequacy ratio on monetary policy transmission by constructing a panel regression model. The results show that large state-owned commercial banks play a major role in bank credit channels for monetary policy, and banks with higher capital adequacy ratios are more likely to have a higher capital adequacy ratio. The results show that large state-owned commercial banks play a major role in bank credit channels for monetary policy, and banks with higher capital adequacy ratios are more vulnerable to monetary policy shocks. In addition, the external capital constraint of minimum capital adequacy will cause a multiplier effect when monetary policy is transmitted through credit channels. The multiplier effect produced by joint-stock commercial banks is much smaller than that of large state-owned banks. The multiplier effect produced by joint-stock commercial banks is much smaller than that of large state-owned banks. Therefore, financial supervisory departments must fully consider the interference caused by the capital adequacy ratio on monetary policy, strengthen policy coordination, and unblock the transmission mechanism of Therefore, financial supervision departments must fully consider the interference caused by the capital adequacy ratio on monetary policy, strengthen policy coordination, and unblock the transmission mechanism of monetary policy.

Bank digital transformation, bank competitiveness and systemic risk

The aim of this paper is to analyze the impact of the digital transformation of banks on their systemic risks. We find that the digital transformation of commercial banks can significantly inhibit the systemic risk of banks, and this conclusion is still valid after considering the endogeneity of the model. The bank’s digital transformation reduces its systemic risk by increasing its own competitiveness. Further analysis shows that the reduction of banks’ marginal costs due to digital transformation is a key factor in promoting banks’ competitiveness as the mechanism by which digital transformation reduces banks’ systemic risk. The role of bank digital transformation in reducing systemic risk is heterogeneous, which is more obvious in large commercial banks, commercial banks that have not established financial technology subsidiaries, and systemically important banks.

Heterogeneous Impact of Fintech on the Profitability of Commercial Banks: Competition and Spillover Effects

Using annual panel data of 46 listed commercial banks in China from 2012 to 2021 and constructing a two-way fixed-effects model, this study empirically analyzed the competition and technology spillover effects of fintech on the profitability of commercial banks. The results showed the following: (1) In the early stages of fintech development, the competition effect was larger than the technology spillover effect; thus, it was negatively correlated with commercial banks’ profitability. However, with the spread of innovative fintech, technology spillover effects and commercial bank profitability will gradually improve. (2) The influence of fintech on the profitability of commercial banks differed. Compared with large commercial banks, fintech had more significant negative effects on small- and medium-sized commercial banks in the short run. However, the role of fintech for such banks will also grow in the future. The results of this study provide practical guidance for how commercial banks can respond to the fintech wave. To realize the sustainable development of the banking industry, commercial banks should change their business philosophy and revenue model, vigorously improve their fintech innovation capability, differentiate their choice of fintech development routes, develop personalized customization with a focus on users, and ultimately realize digital transformation and upgrading.

A Study On The Relationship Between Financial Innovation And Bank Sustainability- A Case Study Of State Bank Of India

This study looks at the various forms of financial innovations that have continuously taken place in the provision of financial products /services in India over a period of 5 years. Over a period of time, India has experienced continued growth in the adoption of various non-cash modes of payment hence the need for continuous studies to establish the effect of these financial innovations in the financial services sector. Previously banks were interested only in the economic impacts of the banks but banks are now conscious of the environmental and social impact of their policies as it might affect the quality of assets and also rate of return of banks in the long run. The objective of this study was to establish the effect of financial innovation on bank sustainability. The present study is descriptive as well as analytical in nature. The State Bank of India has been selected for study deliberately being the largest commercial banks in India having wide coverage spreading throughout the country. The data, for the purpose of study, were collected from the annual reports of SBI, Bank Sustainability Report of SBI, journals and other relevant published documents. The study was conducted for a period of 5 years, from 2015-16 to 2019-2020. The analysis of data leads to the conclusion that financial innovation has increased over the period of time. However financial innovation has less impact on bank sustainability in Indian banking sector.

Directions for Improving the Activities of Regional banks in the Republic of Tatarstan

The purpose of this study is to develop tools for assessing the state of regional banks and to justify decisions on the allocation of resources between their business areas by adapting existing methods of banking management to the new economic environment.The authors apply both general scientific methods (induction, deduction, analysis, synthesis) and special methods: systematic and retrospective analysis of existing developments in bank decisions.The results of the application of these methods are the mathematical models describing the functioning of the credit-deposit and transaction of commercial banks of Tatarstan in the past three years from the point of elasticity of actives and liabilities’ substitution. In the paper, we systematized the indicators of actives and liabilities of the five largest commercial banks in Tatarstan in 2019–2022, we approved the equations that characterize these actives and liabilities’ substitution elasticity in MS Excel.The conclusion is that in most cases, there is a unitary elasticity of their mutual substitution, which leads to the conclusion that the Tatarstan banking system is currently in the growth stage of a new life cycle, which began in 2014, after the Russian economy entered new realities due to sanctions pressure. The recommendations were formulated for the banks of Tatarstan in terms of improving the quality of loan portfolios in new conditions: they should improve the methods of making decisions about the loans for companies’ business activities which are first created.

Impact of Asset Diversification on the Profitability of Commercial Banks in Tanzania: A Case of Large Banks in Tanzania

Purpose: The study was conducted to examine the Impact of asset diversification on the profitability of selected large commercial banks in Tanzania. Specifically the study intended to examine the customer loans impact on the profitability of commercial banks in Tanzania, examine the bank assurance impact on the profitability of commercial banks in Tanzania and examine investment in Government securities' impact on the profitability of commercial banks in Tanzania.
 Methodology: This study uses secondary data sources, mainly from annual reports of listed banks, financial reports in newspapers, and data from the Bank of Tanzania regarding the performance of the banking industry. The variables that were used include bank loan, bank assurance, inflation GDP and government. Data was analyzed using descriptive research design whereby Statistical Package for Social Science (SPSS) was used.
 Findings: The study revealed that customers loan (p=.0418), investments in government securities (p= .0399), and Bank assurance (p=.0348) were significant in predicting the financial performance of commercial banks since all the p values were less than 0.05. Control variables were able to explain the results, Core capital to RWA (p=.0318), asset size (p=.0255), Liquid assets to total assets (p=.0203), Inflation rate (p=.0219), and GDP growth (p=.0273) significant as they were below 0.05. The study conclude that Asset diversifications have a significant relationship with the performance of commercial banks. 
 Unique Contribution to Theory, Practice and Policy: The study used portfolio Diversification theory. The study period, spanning from 2015 to 2020, witnessed a notable positive impact of bank assurance, customer loans and investment in Government securities on the performance of commercial banks. The demand for this asset type highly during this period, creating an active market that contributed to enhanced returns. The study recommended the need for collaboration by all stakeholders in the financial sector to review the regulations and establish a framework that supports the implementation of new asset development.

Effect of Work Overload on Job Burnout: The Moderation Effect of Problem-Focused Coping and Job Autonomy

Background: In the contemporary work environment marked by specialization, digitalization, and convergence, job burnout has intensified. This study aims to validate the intricate interplay between individuals and their environment in progression from high-skilled, unstructured job stress.Methods: This study explores the moderating effects of problem-focused coping and job autonomy on the relationship between work overload and job burnout. The participant pool comprised 150 employees (mean age=40.7, 68.7% women) stationed at large commercial bank branches in Korea.Results: First, the study did not uncover a statistically significant moderation effect of problem-focused coping on the relationship between work overload and job burnout. Second, the findings revealed that the impact of work overload on job burnout displayed variation contingent upon the levels of problem-focused coping and job autonomy.Conclusions: This study underscores the pivotal role of ensuring job autonomy within the work environment to effectively mitigate the adverse effects of excessive work situations through problem-focused coping.

What Predicts the Growth of Small Firms? Evidence from Tanzanian Commercial Loan Data

Abstract Not all firms have equal capacity to absorb productive credit. Identifying those with higher potential may have large consequences for productivity. We collect detailed survey data on small- and medium-sized Tanzanian firms who borrow from a large commercial bank, which in turn raises funds via international capital markets. Using machine learning methods to identify predictors of loan growth, we document, first, that we achieve high rates of predictive power. Second, “soft” information (entrepreneurs’ motivations for entrepreneurship and constraints faced) has predictive power over and above administrative data (sector, age, etc.). Third, there is a different and larger set of predictors for women than men, consistent with greater barriers to efficient capital allocation among female entrepreneurs.

Disclosure Quality Assessment of Sustainability Reporting Practices in Emerging Countries

Indonesia has become a major force in advancing sustainable finance across emerging countries. One of the reasons was due to the role of the regulator and supervisor of Indonesia’s financial services industry, Indonesia Financial Services Authority, who required, through its regulation, Financial Services Institutions, Issuers and Public Companies to submit sustainable reports to Indonesia FSA and publish them for the public. This study is intended to conduct an assessment on the scope of disclosure presented on the sustainability report submitted by the Indonesian banking industry. The methodology used is qualitative with descriptive analysis. The evaluation was conducted through a desk study by analyzing banks’ sustainability reports available on their websites. The results of the analysis demonstrated that two years before the implementation of the Indonesia FSA sustainable finance regulation, only 28,5% of sustainability reports, which have submitted voluntarily by large commercial banks, are in line with materiality and stakeholders’ engagement principles. After the sustainable finance regulation was implemented, it was found that only 56,6% of the sustainability reports submitted met the materiality and stakeholders’ engagement principles required by the regulation. Therefore, the biggest challenge lies in the effort to promote awareness and understanding on the importance of sustainable finance and the quality of sustainability report disclosure.

Exploration of Marketing Strategies of Rural Financial Institutions in the Context of Internet Finance--Bank A as an Example

As an essential component of China's financial institution system, the development and operation of rural financial institutions are of great significance to the economic development of capital financing, the improvement of the "Issues concerning agriculture, rural areas, and farmers," and the promotion of financial inclusion in rural areas and urban-rural areas of China. On this premise, based on the impact of Internet finance on rural commercial banks and the comparison between rural commercial banks and other commercial banks, this paper briefly discusses the improvement direction of marketing strategies of rural commercial banks using the traditional 4P theory as an example. In terms of products, we can learn relevant technologies from large commercial banks and actively develop products that meet customers' needs; the pricing strategies of commercial banks or financial institutions in different rural areas should be focused, and product prices can be dynamically adjusted according to the background of the general environment rather than fixed; at the same time, we should deepen offline sales channels and actively open online channels, combining online and offline media; finally, agricultural commercial banks should adhere to the principles of innovation. Finally, agribusiness banks should comply with the principles of invention, stability, and compliance and pay attention to adopting technology for risk control.

The Impact of the Banking Sector and Its Heterogeneity on the Scale and Quality of China's Exports

Abstract: Using data of export transactions and the regional distribution of banking branches in China, this article examines the effect of bank development on the export scale and quality of firms. The results show that these factors are significantly enhanced by bank development. Compared to large state-owned commercial banks and rural financial institutions, the development of city commercial banks and joint-equity commercial banks has a more significant impact on improving the export scale and quality of firms. This article also examines the channels through which bank development benefits the export performance of firms. Indeed, bank development significantly increases firms' access to credit and reduces their credit costs, leading to improved export performance. These findings have important implications for financial development and export upgrading.