Basic Search / Detailed Display

Author: 黎詩豪
Ricolay Anderson Christian
Thesis Title: 銀行盈利能力決定因素的比較研究
A Comparative Study of the Determinants of Bank Profitability
Advisor: 謝劍平
Joseph C.P. Shieh
Committee: 劉代洋
Day-Yang Liu
Chun-Nan Chen
Degree: 碩士
Department: 管理學院 - 財務金融研究所
Graduate Institute of Finance
Thesis Publication Year: 2021
Graduation Academic Year: 109
Language: 英文
Pages: 37
Keywords (in Chinese): banking sectorbank profitabilityTaiwanAsia Pacificvariables
Keywords (in other languages): banking sector, bank profitability, Taiwan, Asia Pacific, variables
Reference times: Clicks: 313Downloads: 14
School Collection Retrieve National Library Collection Retrieve Error Report

  • Banking sector is becoming more important over the years as it has a vital role in funding both government and private sectors. In Asia Pacific, banking sectors can be observed from two point of views. On one perspective, banking sectors appear to be strong and growing. On the other hand, closer observation reveals that Asia Pacific commercial banks are having the challenges as mature markets, including slowing growth, thinning margins, and higher capital requirements. In term of macroeconomic situations, banks are facing the gradual adoption of open banking standards in which making more competition and banks will continuously struggle in making more returns.
    Based on these issues, the purposes of this research is to explore and analyze variables which influence the profitability of Taiwan commercial banks during the period of 2015 to 2019. The dependent variables or the determinants of bank profitability used in this research are bank size, credit risk, the efficiency of management, equity to asset ratio, and market capitalization. Meanwhile, the independent variables or the proxies of bank profitability are return of equity, return of asset, and net interest margin. The method used in this study is panel data regression and significance test.
    The findings of this study have shown that bank size and market capitalization do not have any influence on any proxies of bank profitability. Meanwhile, credit risk, efficiency of management, and inflation are having a significant influence on ROE and ROA, but not to NIM. Surprisingly, both credit risk and efficiency of management are having a positive correlation to ROE and ROA. In term of equity to asset ratio, it is only have a significant influence on ROE.

    ABSTRACT i ACKNOWLEDGEMENTS ii TABLE OF CONTENTS iii LIST OF FIGURES v LIST OF TABLES vi CHAPTER I INTRODUCTION 1 1.1 Research Background 1 1.2 Problem Statement 4 1.3 Research Purposes 4 CHAPTER II LITERATURE REVIEW 5 2.1 Proxies of Bank Profitability 5 2.1.1 Return on Equity (ROE) 5 2.1.2 Return on Asset (ROA) 5 2.1.3 Net Interest Margin (NIM) 5 2.2 Determinants of Bank Profitability 5 2.2.1 Bank Size 5 2.2.2 Credit Risk 6 2.2.3 Management Efficiency 6 2.2.4 Equity to Asset Ratio (EAR) 7 2.2.5 Inflation 7 2.2.6 Market Capitalization 7 CHAPTER III METHODOLOGY 9 3.1 Research Description 9 3.2 Population and Sample 9 3.3 Data Collection Method 10 3.4 Variables 10 3.5 Data Analysis 12 3.5.1 Descriptive Statistics 12 3.5.2 Panel Data Regression 12 3.5.3 Selection Method of Panel Data Regression 13 3.5.4 Significance Test 13 CHAPTER IV DATA ANALYSIS 14 4.1 Descriptive Statistics 14 4.2 Panel Data Regression 15 4.2.1 ROA 16 4.2.2 ROE 18 4.2.3 NIM 20 CHAPTER V CONCLUSION 22 5.1 Conclusion 22 5.2 Research Limitation 23 5.3 Future Research Description 24 BIBLIOGRAPHY 25

    Aghaee, M., & Kazempour, M. (2013). A study on relationship between inflation rate and changes in profitability ratios in Tehran Stock Exchange. Management Science Letters
    Aguenaou, S., Lahrech, A., & Bounakaya, S. (2017). Analyzing Banks’ Efficiency as a Measurement of Performance in the Moroccan Context: Application of CAMEL Framework. International Review of Research in Emerging Markets and the Global Economy.
    Ahmad, R. & Matemilola, B.T. (2013). Determinants of Bank Profits and Net Interest Margins
    Aladwan, M. (2015). The Impact of Bank Size on Profitability “An Empirical Study on Listed Jordanian Commercial Banks. European Scientific Journal. 11. 217-236.
    Ali, G., & Bhati et al. (2018). Determinants of Net Interest Margin-A Study Based On Conventional Banks Of Pakistan.
    Aliu, M., & Sahiti, A. (2016). The Effect of Credit Risk Management on Banks' Profitability in Kosovo.
    Baltagi, B.H. (2008). Econometric Analysis of Panel Data. New York: John Wiley and Sons.
    Caprio, Gerard, & Klingebiel (2003). “Episodes of Systemic and Borderline Financial Crises.” World Bank Reserach Dataset.
    Cooper, D.R., & Schindler, P.S. (2014). Business Research Methods (12th ed.). New York City, NY: McGraw-Hill Education.
    Creswell, J.W. (2014). Research Design. Thousand Oaks, California, United States of America: SAGE Publications.
    Dietrich, A., & Wanzenried, G. (2011). Determinants of Bank profitability before and during the crisis: Evidence from Switzerland. Journal of International Financial Markets, Institutions and Money, 21(3), 307–327.
    Ekinci, R. & Poyraz, G. (2019). The Effect of Credit Risk on Financial Performance of Deposit Banks in Turkey.
    Etikan et al. (2015). Comparison of Convenience Sampling and Purposive Sampling. American Journal of Theoretical and Applied Statistics, 5(1), 1-4.
    Fahrul, P., & Sriawan et al. (2019). Effect Of Equity To Assets Ratio (EAR), Size , And Loan To Assets Ratio (LAR) On Bank Performance.
    Fraker, G. (2006). Using Economic Value Added (EVE) to Measure and Improve Bank Performance. RMA-Arizona Chapter.
    Foster, K.N., & Christian L.M. (2008). F-Test. Encyclopedia of Survey Research Methods. Sage Publications.
    Gall, M.D., Gall, J.P., & Borg, W.R. (2007). Educational research, an Introduction (Eighth ed.). Boston: Pearson.
    Ghozali, I. (2011). Analisis Multivariate Program IBM SPSS 19. Semarang: Badan Penerbit Universitas Diponogoro.
    Greene, W.H. (2012). Econometric Analysis (4th ed.). Englewood Cliffs, N. J.: Pren¬tice-Hall.
    Gulzar A. (2018). The Contribution of the Financial Sector in the Economic Growth of Pakistan: A literature Review on Growth Theories and Indicators of Economic Growth. J Bus Fin Aff 7: 352.
    Gurka, M., Kelley, G. & Edwards, L. (2012). Fixed and random effects models. Wiley Interdisciplinary Reviews: Computational Statistics.
    Hamza & Khan (2014). Effect of Banking Sector Performance in Economic Growth: A Case Study of Pakistan. J Appl Environ Biol Sci 4: 444-449.
    Hanafi, M.M. (2008). Manajemen Keuangan. Edisi 1. Yogyakarta: BPFE.
    Irawan (2020). Panel Regression of Cashflow Operation and Efficiency Ratio to Profitability: Empirical Study of Banking in Indonesia. International Journal of Research and Review.
    Kaliyadan, F. & Kulkarni, V. (2019). Types of Variables, Descriptive Statistics, and Sample Size. Indian Dermatol Online J. 10(1): 82–86.
    Kaunda & Sharma (2010). Stock Market Integration Examining Linkages between India and Select Asian Markets. Foreign Trade Review, 45, 3-18.
    Kaur, J. (2015). Techniques Used in Hypothesis Testing in Research Methodology. International Journal of Science and Research, 4(5), 362-365.
    Gitman, L.J. (2014). Principles of Managerial Finance. NY: Pearson Education.
    Liang, H.Y., & Reichert, A. (2006). The Relationship between Economic Growth and Banking Sector Development. Banks and Bank System 1: 19-35.
    Levine, R. (2005). Finance and Growth: Theory and Evidence. Handbook of Economic Growth, I, 865-934.
    Lopes, R.B., Freitas, F., & Sousa, I. (2015). Application of Lean Manufacturing Tools in the Food and Beverage Industries. Journal of technology management & innovation, 10(3), 120-130.
    Luc laeven et al. (2014). Bank Size, Capital Requirements, and Systemic Risk: Some International Evidence.
    Marimba, K.A. (2018). Effect of Inflation Rate on Profitability of Commercial Banks in Kenya.
    McKinsey & Company (2019). Asia-Pacific Banking Review 2019. Bracing for Consolidation: The Quest for Scale.
    Mei, C. et al. (2019). Credit Risk and Bank Profitability of Commerical Banks in Ghana. International Journal of Research & Development.
    Mujiatun, S., & Handayani, S. (2018) Effect of Operational Cost and Operational Revenue on Return on Asset of Sharia Banking: Case Study on Sharia Business Division of PT.Bank Sumut. International Journal of Scientific & Technology Research, Vol. 7.
    Naceur, S., & Goaied, M. (2001). The Determinants of the Tunisian Deposit Banks Performance. Applied Financial Economics, 11:317-319.
    Naceur, S. (2003). The Determinants of the Tunisian Banking Industry Profitability: Panel Evidence. Universite Libre de Tunis Working Papers, pp.1-17
    Ongore, V.O., & Kusa, G.B. (2013). Determinants of Financial Performance of Commercial Banks in Kenya. International Journal of Economics and Financial Issues, Vol. 3, No. 1, 2013, pp.237-252.
    Petria, N. et al. (2015). Procedia Economics and Finance 20. 518 – 524.
    Prabowo, F. et al. (2018). Effect of Equity to Assets Ratio (EAR), Size, and Loan to Assets Ratio (LAR) on Bank Performance. IOSR Journal of Economics and Finance.
    Qurashi, M., & Zahoor, M. (2016). Impact of Profitability, Bank, and Macroeconomic Factors on the Market Capitalization of the Middle Eastern Banks. Internation Journal of Business and Management Invention.
    Rahman, M., & Hamid, M., & Khan, M. (2015). Determinants of Bank Profitability: Empirical Evidence from Bangladesh. International Journal of Business and Management. 10. 135-149.
    Riduwan & Kuncoro (2012). Cara Menggunakan dan Memakai Path Analysis. Bandung: Alfabeta.
    Roman, A. & Tomuleasa, I. (2013). Analysis of Profitability Determinants: Empirical Evidence of Commercial Banks in the New EU Member States.
    Saeed, M.S., & Zahid, N. (2016). The Impact of Credit Risk on Profitability of the Commercial Banks. Journal of Business & Financial Affairs.
    Saksonova, S. (2014). The Role of Net Interest Margin in Improving Banks’ Asset Structure and Assessing the Stability and Efficiency of their Operations. Procedia - Social and Behavioral Sciences.
    Saunders, L.J., Rusell, R.A., & Crabb, D.P. (2012). The Coefficient of Determination: What Determines a Useful R2 Statistic?. Investigative Ophthalmology & Visual Science, Vol.53, 6830-6832.
    Shamki, D., Alulis, I., & Sayari, K. (2016). Financial Information Influencing Commercial Banks Profitability. International Journal of Economics and Finance.
    Shamki, D., & Sayari, K. (2016). Commercial Banks Profitability and Stock Market Development.
    Sheytanova, T. (2014). The Accuracy of the Hausman Test in Panel Data: aMonte Carlo Study.
    Sinclair, P. (2010). Inflation Expectations. New York, NY: Routledge.
    Skamo, L.T. (2012). The Relationship Between Market Capitalization and Profitability of Commercial Banks Listed on the Nairobi Securities Exchange
    Slawson, W.D. (2015). The New Inflation: The Collapse of Free Markets. Princeton, NJ: Princeton University Press.
    Smirlock, M. (1985). Evidence on the (non) Relationship between Concentration and Profitability in Banking. Journal of Money, Credit, and Banking, Vol. 17, pp.69–83.
    Umar, H.S., & Madugu, U. (2015). The Imperative of Population Sampling in Social Science Research. Global Journal of Political and Science and Administration, 3(3), 49-57.