Interest Rate Liberalization and Commercial Bank Performance
New Evidence From Chinese A-Share Banks
Bibliographic Data
| ID | 4182652 |
|---|---|
| Authors | Dilesha Nawadali Rathnayake (0000-0003-4583-1388, Shandong University of Technology, corresponding author), Yang Bai (0000-0003-0800-2599, Shandong University of Technology), Pierre Axel Louembé (Dongbei University of Finance and Economics), Li Qi (0000-0002-7224-1327, Shandong University of Technology) |
| Year | 2022 |
| Volume | 12 |
| Issue | 2 |
| Publication date | 2022-04-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | SAGE Open (JOURNAL) |
| Journal identifiers | ISSN: 2158-2440 • E-ISSN: 2158-2440 |
| Publisher | SAGE Publications Inc (PUBLISHER) |
| DOI | 10.1177/21582440221096648 |
| OpenAlex | W4280636142 |
| Language | EN |
| Citations received | 1 |
| References cited | 42 |
Abundant literature infers the negative incidence of financial liberalization in the banking sector. As interest rate marketization is a reality in China, we empirically investigate the determinants of commercial banks' financial performance using 10 listed Chinese commercial banks for 1999 to 2019. Our findings suggest that net interest margin (NIM), non-performing loans (NPL), and asset size (LnAsset) are the key drivers of profitability in Chinese banks. Interestingly, for the sample of city banks observed, we find that bank performance is strongly driven by sound management of the assets and the retail interest margins. On the opposite, the joint-stock banks' strong diversification leads to lower reliance on net interest margins. Our results also suggest that joint-stock banks' asset size puts strong pressure on their overall performance and exert a diminishing return effect as their assets' critical size generates proportional administrative expenses that hinder profitability
Business · Economics · Financial system · Interest rate · Liberalization · Monetary economics · Net interest income · Net interest margin · Profit margin · Profitability index · Return on assets · Banking stability, regulation, efficiency · Housing Market and Economics · Islamic Finance and Banking Studies · Finance
| Unique citing works | 1 |
|---|---|
| Citations per year | 0,5 |
| Citation span | 2024 - 2024 (1) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 1 |