Bank Diversification and Performance

The Role of Financial Stability

DOI

10.2991/aebmr.k.210601.007How to use a DOI?

Keywords

Income Diversification, Asset Diversification, Financial Stability

Abstract

The purpose of the study tries to examine whether commercial banks can adopt the strategy of bank diversification to improve the operating performance under the condition of financial stability. By using 19 commercial banks in Macau SAR, the study employing ROA to measure bank performance and income diversification and asset diversification to measure bank diversification. Furthermore, the study employs capital adequacy ratio, non-performing loan ratio, liquidity ratio and financial stability index to measure financial stability to measure financial stability as moderators in the estimation regression. The results of empirical study indicate that income diversification has a significant and positive effect on bank performance, while asset diversification has no significant and positive effect on bank performance. Furthermore, among the moderators of financial stability, liquidity ratio and financial stability index have facilitating effect on the relationship between income diversification and bank performance.

Copyright

© 2021, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Shun-Ho Chu
AU  - Shunping Li
AU  - Xueying Xia
AU  - Xiaoyu Liu
AU  - Jiaxia Li
AU  - Shujun Zhang
PY  - 2021
DA  - 2021/06/02
TI  - Bank Diversification and Performance
BT  - Proceedings of the 2021 International Conference on Enterprise Management and Economic Development (ICEMED 2021)
PB  - Atlantis Press
SP  - 38
EP  - 43
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.210601.007
DO  - 10.2991/aebmr.k.210601.007
ID  - Chu2021
ER  -