Ownership concentration and bank pro fi tability (original) (raw)
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Ownership concentration and bank performance: Evidence from India
Cogent economics & finance, 2022
This paper analyzes the impact of ownership concentration on MENA banks' performance over the period 2004-2011. The sample includes 38 commercial banks belonging to ten countries of the MENA region. We use an econometric method that deals with the endogeneity problems that have arisen in the corporate governance literature. We show that ownership concentration is significant in explaining performance differences between MENA banks. Our analysis shows that bank performance depends on the identity of large shareholder. Banks tend to exhibit higher levels of performance if their largest shareholder is foreign. However, we find a negative relationship between state ownership and bank performance.
Ownership Concentration and Bank Performance: Evidence from MENA Banks
International Journal of Business and Management, 2015
This paper analyzes the impact of ownership concentration on MENA banks' performance over the period 2004-2011. The sample includes 38 commercial banks belonging to ten countries of the MENA region. We use an econometric method that deals with the endogeneity problems that have arisen in the corporate governance literature. We show that ownership concentration is significant in explaining performance differences between MENA banks. Our analysis shows that bank performance depends on the identity of large shareholder. Banks tend to exhibit higher levels of performance if their largest shareholder is foreign. However, we find a negative relationship between state ownership and bank performance.
Impact of Ownership Structure on the Performance & Profitability of Banks
The Journal of Contemporary Issues in Business and Government, 2021
The Ownership structure of Banks play an important role in determining the profitability and performance of the banks. The Banks performance acts as a major issue for the policy decision makers since it is the substratum for the stability and smooth functioning of the banking system. Thus, we tend to we focus on bank ownership defined as the amount of direct equity held by a majority shareholder in the banks who are categorized into concentrated ownership, moderate ownership, & Dispersed Ownership structure. In this article we have made an attempt to systematically review each paper and analyze the impact of Banks Ownership structure on the performance and profitability of the Banks in emerging economies and also the common methodologies and models used by the research scholars in their work. Thus, presenting a systematic review paper. In line with the literature, we present the following analyses of the Scholars. Concentrated Ownership structure leads to increase in Bank’s value & ...
This study investigated the effect of ownership concentration on the performance of the Nigerian banking sector for the period of 2008 to 2014.The study employed a sample of 5 major commercial banks in Nigeria selected on the bases of size. The data for the study was generated from the annual report of each of the banks under study for the period covered. We employed pooled panel data regression analysis to empirically evaluate the data. Both accounting and market based performance were employed with ROA and ROE as the key variable to proxy accounting based performance while EVA were used for market based performance. The result of the pooled panel data analysis reveals that ownership concentration has positive but insignificant effect on both the accounting and market based performance measures employed in the model. On the same vain, firm size which was used as a control variable has a positive and significant effect on both accounting and market based measure of banks performance. We therefor recommend that as concentrated owners seek to increase their interest, appropriate legal and control measures should be put in place to ensure that major owners don't control the banks to their own advantage and to the expense of minority shareholders and the public at large.
The Impact of Ownership Concentration on Bank Profitability: Is the Effect Linear or Non-Linear? An Empirical Evidence For Turkey, 2021
In this study, the linear/non-linear impact of ownership concentration (OC) on financial performance was investigated. In this context, the data of 8 deposit banks trading at BIST were analysed with a fixed-effects model over the period 2005-2020. The research study used the return on assets ratio (ROA) and return on equity ratio (ROE) as financial performance indicators. According to the research results, OC had negative linear impacts on both ROA and ROE. These impacts had higher significance in the four largest banks. Moreover, the interaction between OC and bank size is significant because bank size positively affects ROA. Furthermore, the ownership concentration of the banks subject to the study was determined.
The Effect of Concentrated Ownership on Bank Profitability in Indonesia
2020
This paper examines the association between concentrated ownership and the profitability of banks in Indonesia during the period from 2012 to 2018 with a total sample of 93 banks or 651 observations. This study applies the Random Effect regression method, and reveals a non-significant association between concentrated ownership and bank profitability as measured by ROA and ROE. It indicates that a majority of shareholders tend to use their power to exploit minority shareholders, which can also strengthen the monitoring effect. However, the regression also indicates that there is a significant non-linear relationship between concentrated ownership and profitability when measured by ROE. There is a mixed-effect between concentrated ownership and profitability in the case of Indonesian banks. Moreover, a regression is also utilized with dummy variables of concentrated ownership (FIN and IND) to assess the difference between non-financial institution ownership and financial institution ...
Ownership concentration, ownership identity, and bank performance
Banks and Bank Systems, 2018
This paper examines whether ownership concentration and certain type of ownership can affect the financial performance of Lebanese banks. It uses longitudinal data from the largest 35 Lebanese banks over the period 2009–2014 and employs the panel regression model. The empirical results show that ownership concentration and certain type of shareholders play an important role in the area of corporate governance in Lebanese banks. In particular, bank financial performance is positively associated with ownership concentration, managerial ownership, and foreign and institutional ownerships; however, family ownership is not related to bank performance. Also, this paper shows that both ownership concentration and managerial ownership have a U-shaped relationship with bank performance. Several robustness tests largely confirm the findings, with important implications for policy-makers. The findings are crucial to policy-makers and bankers who are interested in tailoring good corporate gover...
Impact of bank’s ownership structure on risk and efficiency: Evidence from Bangladesh
International Journal of Financial Engineering
This study is investigated the impact of ownership structure on bank’s risk and efficiency in Bangladesh. We have used Z-Score as risk-taking variable. As ownership structure is the main variable here, we have taken managerial ownership, institutional ownership, and general public ownership as proxies for ownership structure. Here, another important main variable efficiency has been used as a stability. For our study, we have selected 32 banks randomly. Data have been collected from annual reports of these banks. The time frame of the data is 2000–2014. The study results suggested that using Z-score as proxy for risk taking and the proxy of managerial ownership has negative association and the institutional ownership has significant positive effect on Z-score of commercial banks in Bangladesh. The proxies we have used for ownership structure i.e., managerial ownership and general public ownership have significant negative association on efficiency. On the other hand, institutional o...
OWNERSHIP CONCENTRATION AND FIRM PERFORMANCE: EVIDENCE FROM THE BANKING SECTOR OF PAKISTAN
International Journal of Management, IT and Engineering (IJMIE) ISSN: 2249-0558 Volume 8, Issue 9, 2018
In this research the researcher investigatedrelationship between ownership concentration and performance, of the banking sector in Pakistan. This study analyzed 19 commercial banks listed in the Pakistan stock exchange (PSX), for a time period of 10 years (2006-2015). The selection of 19 listed commercial banks was of the reason mainly due to fill the financial literature gap of the Pakistani banking sector regarding ownership concentration. Since not enough previous research has been done on the ownership concentration with respect to the Pakistan's banking sector. Furthermore, out of the total 21 listed banks, only 19 were selected due to the availability of data. The study used secondary data on the bank ownership and financial performance. These secondary data was obtained mainly from limited commercial banks financial statements.The ownership concentration was measured with three indicators, percentage of largest shareholder (LSH), percentage of five largest shareholders (FIVELSH) and percentage of ten largest shareholders (TENLSH). The shareholder (LSH), which is measured by the percentage of largest single shareholder of a company, is the narrowest. Firms performance was measured by market based measure Tobin's Q (TQ), and accounting based measures Return on equity (ROE) and Return on assets (ROA). Analysis was done by multiple regression models. The findings were that largest shareholder (LSH) had a statistically significant positive relationship with accounting based performance measure, Return on assets (ROA), whereas the rest of the ownership indicators were insignificant. Furthermore, all the ownership concentration indicators also were in insignificant relationship with the performance measures, Return on equity (ROE) and Tobin's Q (TQ). With understanding the relationship of the ownership concentration with the performance of the commercial banks in Pakistan, the policy makers, management and investors helps them to increase the firm value.
Ownership concentration and bank risk (A study on banking sectors in Indonesia)
Journal of Economics, Business, and Accountancy | Ventura, 2015
The purpose of this study is to test empirically the relationship between ownership concentration and risk taking by banks which are proxied by the CAR and LDR (li-quidity ratio). The study was motivated by the limited previous studies that analyze the structure of ownership in financial institutions and the weaknesses in sampling. Our analysis focused on Indonesia because this country has implemented the Basel Accord II standards successfully. This regulatory compliance is expected can control banking risk. Using data from 2009 until 2013 and panel data. We found that the ownership concentration become important determinants of bank liquidity. These findings are expected to provide policy guidance for regulators, especially relating to the ownership structure of the bank. However, the ownership concentration proved to be involved in the management decision to risk taking in banks.