Bank performance and noninterest income: evidence from countries in the Asian region

Article


Antao, S. and Karnik, A. 2022. Bank performance and noninterest income: evidence from countries in the Asian region. Asia-Pacific Financial Markets. 29 (3), pp. 477-505. https://doi.org/10.1007/s10690-021-09357-1
TypeArticle
TitleBank performance and noninterest income: evidence from countries in the Asian region
AuthorsAntao, S. and Karnik, A.
Abstract

Noninterest income (NII) is income generated by banks from sources other than interest payments. Studies conducted on the relationship between NII and bank risk for the USA and Europe have found that emphasis on income diversification lowers risk in European banks but exacerbates it in American banks. Current research on Asian banks has not led to a coherent view of the relationship between NII and bank risk. We employ data over 25 years for 24 Asian countries to examine this relationship. Using the GMM estimation approach we estimate equations for two time-periods, 1996–2007 and 2008–2018, to examine the NII-bank risk relationship in the presence of some controlling financial, macroeconomic and policy variables. Our results show that non-interest income worsens bank risk for all 24 countries as well as for sub-groups of countries. We also find that, by and large, economic growth improves bank risk while inflation above a threshold worsens it. Finally, our proxy measure for monetary policy improves bank risk though fiscal policy seems to have no effect.

KeywordsNoninterest income, Bank performance, Asia–Pacific region, GMM estimation, Determinants of bank risk, ZSCORE
PublisherSpringer
JournalAsia-Pacific Financial Markets
ISSN1387-2834
Electronic1573-6946
Publication dates
Online12 Jan 2022
Print30 Sep 2022
Publication process dates
Deposited09 Aug 2022
Accepted26 Dec 2021
Output statusPublished
Publisher's version
License
Copyright Statement

© The Author(s) 2022
Open Access: This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.

Digital Object Identifier (DOI)https://doi.org/10.1007/s10690-021-09357-1
LanguageEnglish
Permalink -

https://repository.mdx.ac.uk/item/89y0v

  • 61
    total views
  • 19
    total downloads
  • 0
    views this month
  • 0
    downloads this month

Export as

Related outputs

Political incumbency effects in India: a regional analysis
Karnik, A., Lalvani, M. and Phatak, M. 2023. Political incumbency effects in India: a regional analysis. Studies in Economics and Econometrics. 47 (1), pp. 43-60. https://doi.org/10.1080/03796205.2023.2185666
Assessing UAE's oil dependence: an optimal control approach
Fernandes, C. and Karnik, A. 2009. Assessing UAE's oil dependence: an optimal control approach. Education, Business and Society: Contemporary Middle Eastern Issues. 2 (2), pp. 138-153. https://doi.org/10.1108/17537980910960708
Natural resource dependence: a macroeconometric model for the United Arab Emirates
Karnik, A. and Fernandes, C. 2009. Natural resource dependence: a macroeconometric model for the United Arab Emirates. Applied Economics. 41 (9), pp. 1157-1174. https://doi.org/10.1080/00036840601019109
Estimating elasticity of demand for tourism in Dubai
Fernandes, C. and Karnik, A. 2010. Estimating elasticity of demand for tourism in Dubai. Tourism Analysis. 15 (1), pp. 57-69. https://doi.org/10.3727/108354210X12724734223630
Examining the linkage between class attendance at university and academic performance in an international branch campus setting
Karnik, A., Kishore, P. and Meraj, M. 2020. Examining the linkage between class attendance at university and academic performance in an international branch campus setting. Research in Comparative and International Education. 15 (4), pp. 371-390. https://doi.org/10.1177/1745499920958855
Economic and institutional determinants of FDI
Kishore, P. and Karnik, A. 2018. Economic and institutional determinants of FDI. 4th International Conference on Emerging Research Paradigms in Business and Social Sciences. Dubai, UAE 16 - 18 Jan 2018
Examining the linkage between class attendance and academic performance
Karnik, A., Kishore, P. and Meraj, M. 2015. Examining the linkage between class attendance and academic performance. 3rd International Conference on Emerging Research Paradigms in Business and Social Sciences. Dubai, UAE 24 - 26 Nov 2015 pp. 470-475