Loading…
The effect of capital structure, operating efficiency and non-interest income on bank profitability: new evidence from Asia
Purpose The Asian banking system has been appreciated with many distinct qualities including consistent in profitability. Many studies have examined the profitability of Asian banking sector from diverse perspectives. However, studies on bank profitability in connection to the capital structure, ope...
Saved in:
| Published in: | Asian journal of economics and banking 2023-03, Vol.7 (1), p.25-44 |
|---|---|
| Main Authors: | , , , , |
| Format: | Article |
| Language: | English |
| Subjects: | |
| Citations: | Items that this one cites Items that cite this one |
| Online Access: | Get full text |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| cited_by | cdi_FETCH-LOGICAL-c1866-3a0dd41411223d7e44d68411edac4c5043154bdb69b26a4b5aceb08149c708203 |
|---|---|
| cites | cdi_FETCH-LOGICAL-c1866-3a0dd41411223d7e44d68411edac4c5043154bdb69b26a4b5aceb08149c708203 |
| container_end_page | 44 |
| container_issue | 1 |
| container_start_page | 25 |
| container_title | Asian journal of economics and banking |
| container_volume | 7 |
| creator | Mehzabin, Saima Shahriar, Ahanaf Hoque, Muhammad Nazmul Wanke, Peter Azad, Md. Abul Kalam |
| description | Purpose
The Asian banking system has been appreciated with many distinct qualities including consistent in profitability. Many studies have examined the profitability of Asian banking sector from diverse perspectives. However, studies on bank profitability in connection to the capital structure, operating efficiency and non-interest income are only a few. This study investigates the influence of capital structure as estimated by leverage ratio and long-term debt, operating efficiency and non-interest income on the profitability of the banking industry in 28 countries of Asia.
Design/methodology/approach
This paper utilizes fixed effect regression model by involving panel data with sample of 492 banks from 28 countries of Asia for the time span of 15 years from 2004 to 2018.
Findings
The results confirm that an increase in total debt ratio increases the profit margin of the bank as supported by the agency cost theory, suggesting that the debt financing increases the profitability of the firm. In addition, the findings reveal that lowering the operating expenses and managing of costs effectively can boost the profitability of bank. Furthermore, non-interest income plays a vital role when the interest rates are lower. Hence the study suggests that a careful investment in this sector can generate income as well as increase the profit margin of the banking arena.
Originality/value
The paper examines the profitability of bank by including impact of leverage ratio and long-term debt as a measure of capital structure along with the influence of operational efficiency and non-interest income which contributes to the understanding of the existing literature. |
| doi_str_mv | 10.1108/AJEB-03-2022-0036 |
| format | article |
| fullrecord | <record><control><sourceid>proquest_cross</sourceid><recordid>TN_cdi_proquest_journals_2789198093</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><sourcerecordid>2789198093</sourcerecordid><originalsourceid>FETCH-LOGICAL-c1866-3a0dd41411223d7e44d68411edac4c5043154bdb69b26a4b5aceb08149c708203</originalsourceid><addsrcrecordid>eNotkM1OwzAQhCMEEhX0AbhZ4oph13YSh1upyp8qcSlny3E24NLaxUlBFS9PIjjtrjQzO_qy7ALhGhH0zex5ccdBcgFCcABZHGUTUUjJy6rC43HHnFda4Gk27bo1AAiNKPNykv2s3olR25LrWWyZszvf2w3r-rR3_T7RFYs7Srb34W2UeecpuAOzoWEhBu5DT4m6nvng4pZYDKy24YPtUmyHoNpvfH-4ZYG-GX35ZvASa1Pcslnn7Xl20tpNR9P_eZa93i9W80e-fHl4ms-W3KEuCi4tNI1ChSiEbEpSqin0cFFjnXI5KIm5qpu6qGpRWFXn1lENGlXlStAC5Fl2-Zc7tPrcD23NOu5TGF4aUeoKKw2VHFT4p3Ipdl2i1uyS39p0MAhmxGxGzAakGTGbEbP8BTTAcHM</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>2789198093</pqid></control><display><type>article</type><title>The effect of capital structure, operating efficiency and non-interest income on bank profitability: new evidence from Asia</title><source>Emerald Open Access</source><source>ProQuest - Publicly Available Content Database</source><creator>Mehzabin, Saima ; Shahriar, Ahanaf ; Hoque, Muhammad Nazmul ; Wanke, Peter ; Azad, Md. Abul Kalam</creator><creatorcontrib>Mehzabin, Saima ; Shahriar, Ahanaf ; Hoque, Muhammad Nazmul ; Wanke, Peter ; Azad, Md. Abul Kalam</creatorcontrib><description>Purpose
The Asian banking system has been appreciated with many distinct qualities including consistent in profitability. Many studies have examined the profitability of Asian banking sector from diverse perspectives. However, studies on bank profitability in connection to the capital structure, operating efficiency and non-interest income are only a few. This study investigates the influence of capital structure as estimated by leverage ratio and long-term debt, operating efficiency and non-interest income on the profitability of the banking industry in 28 countries of Asia.
Design/methodology/approach
This paper utilizes fixed effect regression model by involving panel data with sample of 492 banks from 28 countries of Asia for the time span of 15 years from 2004 to 2018.
Findings
The results confirm that an increase in total debt ratio increases the profit margin of the bank as supported by the agency cost theory, suggesting that the debt financing increases the profitability of the firm. In addition, the findings reveal that lowering the operating expenses and managing of costs effectively can boost the profitability of bank. Furthermore, non-interest income plays a vital role when the interest rates are lower. Hence the study suggests that a careful investment in this sector can generate income as well as increase the profit margin of the banking arena.
Originality/value
The paper examines the profitability of bank by including impact of leverage ratio and long-term debt as a measure of capital structure along with the influence of operational efficiency and non-interest income which contributes to the understanding of the existing literature.</description><identifier>ISSN: 2615-9821</identifier><identifier>EISSN: 2633-7991</identifier><identifier>DOI: 10.1108/AJEB-03-2022-0036</identifier><language>eng</language><publisher>London: Emerald Group Publishing Limited</publisher><subject>Banking industry ; Banks ; Capital assets ; Capital structure ; Corporate taxes ; Debt financing ; Efficiency ; Emerging markets ; Hypotheses ; Long term debt ; Profit margins ; Profitability ; Recessions</subject><ispartof>Asian journal of economics and banking, 2023-03, Vol.7 (1), p.25-44</ispartof><rights>Saima Mehzabin, Ahanaf Shahriar, Muhammad Nazmul Hoque, Peter Wanke and Md. Abul Kalam Azad. This work is published under http://creativecommons.org/licences/by/4.0/legalcode (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License.</rights><lds50>peer_reviewed</lds50><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c1866-3a0dd41411223d7e44d68411edac4c5043154bdb69b26a4b5aceb08149c708203</citedby><cites>FETCH-LOGICAL-c1866-3a0dd41411223d7e44d68411edac4c5043154bdb69b26a4b5aceb08149c708203</cites><orcidid>0000-0003-3463-2738</orcidid></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://www.proquest.com/docview/2789198093/fulltextPDF?pq-origsite=primo$$EPDF$$P50$$Gproquest$$Hfree_for_read</linktopdf><linktohtml>$$Uhttps://www.proquest.com/docview/2789198093?pq-origsite=primo$$EHTML$$P50$$Gproquest$$Hfree_for_read</linktohtml><link.rule.ids>315,786,790,25783,27957,27958,37047,44625,75483</link.rule.ids></links><search><creatorcontrib>Mehzabin, Saima</creatorcontrib><creatorcontrib>Shahriar, Ahanaf</creatorcontrib><creatorcontrib>Hoque, Muhammad Nazmul</creatorcontrib><creatorcontrib>Wanke, Peter</creatorcontrib><creatorcontrib>Azad, Md. Abul Kalam</creatorcontrib><title>The effect of capital structure, operating efficiency and non-interest income on bank profitability: new evidence from Asia</title><title>Asian journal of economics and banking</title><description>Purpose
The Asian banking system has been appreciated with many distinct qualities including consistent in profitability. Many studies have examined the profitability of Asian banking sector from diverse perspectives. However, studies on bank profitability in connection to the capital structure, operating efficiency and non-interest income are only a few. This study investigates the influence of capital structure as estimated by leverage ratio and long-term debt, operating efficiency and non-interest income on the profitability of the banking industry in 28 countries of Asia.
Design/methodology/approach
This paper utilizes fixed effect regression model by involving panel data with sample of 492 banks from 28 countries of Asia for the time span of 15 years from 2004 to 2018.
Findings
The results confirm that an increase in total debt ratio increases the profit margin of the bank as supported by the agency cost theory, suggesting that the debt financing increases the profitability of the firm. In addition, the findings reveal that lowering the operating expenses and managing of costs effectively can boost the profitability of bank. Furthermore, non-interest income plays a vital role when the interest rates are lower. Hence the study suggests that a careful investment in this sector can generate income as well as increase the profit margin of the banking arena.
Originality/value
The paper examines the profitability of bank by including impact of leverage ratio and long-term debt as a measure of capital structure along with the influence of operational efficiency and non-interest income which contributes to the understanding of the existing literature.</description><subject>Banking industry</subject><subject>Banks</subject><subject>Capital assets</subject><subject>Capital structure</subject><subject>Corporate taxes</subject><subject>Debt financing</subject><subject>Efficiency</subject><subject>Emerging markets</subject><subject>Hypotheses</subject><subject>Long term debt</subject><subject>Profit margins</subject><subject>Profitability</subject><subject>Recessions</subject><issn>2615-9821</issn><issn>2633-7991</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2023</creationdate><recordtype>article</recordtype><sourceid>PIMPY</sourceid><recordid>eNotkM1OwzAQhCMEEhX0AbhZ4oph13YSh1upyp8qcSlny3E24NLaxUlBFS9PIjjtrjQzO_qy7ALhGhH0zex5ccdBcgFCcABZHGUTUUjJy6rC43HHnFda4Gk27bo1AAiNKPNykv2s3olR25LrWWyZszvf2w3r-rR3_T7RFYs7Srb34W2UeecpuAOzoWEhBu5DT4m6nvng4pZYDKy24YPtUmyHoNpvfH-4ZYG-GX35ZvASa1Pcslnn7Xl20tpNR9P_eZa93i9W80e-fHl4ms-W3KEuCi4tNI1ChSiEbEpSqin0cFFjnXI5KIm5qpu6qGpRWFXn1lENGlXlStAC5Fl2-Zc7tPrcD23NOu5TGF4aUeoKKw2VHFT4p3Ipdl2i1uyS39p0MAhmxGxGzAakGTGbEbP8BTTAcHM</recordid><startdate>20230324</startdate><enddate>20230324</enddate><creator>Mehzabin, Saima</creator><creator>Shahriar, Ahanaf</creator><creator>Hoque, Muhammad Nazmul</creator><creator>Wanke, Peter</creator><creator>Azad, Md. Abul Kalam</creator><general>Emerald Group Publishing Limited</general><scope>AAYXX</scope><scope>CITATION</scope><scope>7RO</scope><scope>7X1</scope><scope>7XB</scope><scope>ABUWG</scope><scope>AFKRA</scope><scope>ANIOZ</scope><scope>AXJJW</scope><scope>AZQEC</scope><scope>BENPR</scope><scope>BEZIV</scope><scope>CCPQU</scope><scope>DWQXO</scope><scope>K6~</scope><scope>PIMPY</scope><scope>PQBIZ</scope><scope>PQEST</scope><scope>PQQKQ</scope><scope>PQUKI</scope><scope>Q9U</scope><orcidid>https://orcid.org/0000-0003-3463-2738</orcidid></search><sort><creationdate>20230324</creationdate><title>The effect of capital structure, operating efficiency and non-interest income on bank profitability: new evidence from Asia</title><author>Mehzabin, Saima ; Shahriar, Ahanaf ; Hoque, Muhammad Nazmul ; Wanke, Peter ; Azad, Md. Abul Kalam</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c1866-3a0dd41411223d7e44d68411edac4c5043154bdb69b26a4b5aceb08149c708203</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2023</creationdate><topic>Banking industry</topic><topic>Banks</topic><topic>Capital assets</topic><topic>Capital structure</topic><topic>Corporate taxes</topic><topic>Debt financing</topic><topic>Efficiency</topic><topic>Emerging markets</topic><topic>Hypotheses</topic><topic>Long term debt</topic><topic>Profit margins</topic><topic>Profitability</topic><topic>Recessions</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Mehzabin, Saima</creatorcontrib><creatorcontrib>Shahriar, Ahanaf</creatorcontrib><creatorcontrib>Hoque, Muhammad Nazmul</creatorcontrib><creatorcontrib>Wanke, Peter</creatorcontrib><creatorcontrib>Azad, Md. Abul Kalam</creatorcontrib><collection>CrossRef</collection><collection>Asian Business Database</collection><collection>ProQuest: Accounting and Tax</collection><collection>ProQuest Central (purchase pre-March 2016)</collection><collection>ProQuest Central (Alumni)</collection><collection>ProQuest Central</collection><collection>ProQuest Accounting, Tax & Banking Collection</collection><collection>ProQuest Asian & European Business Collection</collection><collection>ProQuest Central Essentials</collection><collection>AUTh Library subscriptions: ProQuest Central</collection><collection>ProQuest Business Premium Collection</collection><collection>ProQuest One Community College</collection><collection>ProQuest Central Korea</collection><collection>ProQuest Business Collection</collection><collection>ProQuest - Publicly Available Content Database</collection><collection>One Business</collection><collection>ProQuest One Academic Eastern Edition (DO NOT USE)</collection><collection>ProQuest One Academic</collection><collection>ProQuest One Academic UKI Edition</collection><collection>ProQuest Central Basic</collection><jtitle>Asian journal of economics and banking</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Mehzabin, Saima</au><au>Shahriar, Ahanaf</au><au>Hoque, Muhammad Nazmul</au><au>Wanke, Peter</au><au>Azad, Md. Abul Kalam</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>The effect of capital structure, operating efficiency and non-interest income on bank profitability: new evidence from Asia</atitle><jtitle>Asian journal of economics and banking</jtitle><date>2023-03-24</date><risdate>2023</risdate><volume>7</volume><issue>1</issue><spage>25</spage><epage>44</epage><pages>25-44</pages><issn>2615-9821</issn><eissn>2633-7991</eissn><abstract>Purpose
The Asian banking system has been appreciated with many distinct qualities including consistent in profitability. Many studies have examined the profitability of Asian banking sector from diverse perspectives. However, studies on bank profitability in connection to the capital structure, operating efficiency and non-interest income are only a few. This study investigates the influence of capital structure as estimated by leverage ratio and long-term debt, operating efficiency and non-interest income on the profitability of the banking industry in 28 countries of Asia.
Design/methodology/approach
This paper utilizes fixed effect regression model by involving panel data with sample of 492 banks from 28 countries of Asia for the time span of 15 years from 2004 to 2018.
Findings
The results confirm that an increase in total debt ratio increases the profit margin of the bank as supported by the agency cost theory, suggesting that the debt financing increases the profitability of the firm. In addition, the findings reveal that lowering the operating expenses and managing of costs effectively can boost the profitability of bank. Furthermore, non-interest income plays a vital role when the interest rates are lower. Hence the study suggests that a careful investment in this sector can generate income as well as increase the profit margin of the banking arena.
Originality/value
The paper examines the profitability of bank by including impact of leverage ratio and long-term debt as a measure of capital structure along with the influence of operational efficiency and non-interest income which contributes to the understanding of the existing literature.</abstract><cop>London</cop><pub>Emerald Group Publishing Limited</pub><doi>10.1108/AJEB-03-2022-0036</doi><tpages>20</tpages><orcidid>https://orcid.org/0000-0003-3463-2738</orcidid><oa>free_for_read</oa></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 2615-9821 |
| ispartof | Asian journal of economics and banking, 2023-03, Vol.7 (1), p.25-44 |
| issn | 2615-9821 2633-7991 |
| language | eng |
| recordid | cdi_proquest_journals_2789198093 |
| source | Emerald Open Access; ProQuest - Publicly Available Content Database |
| subjects | Banking industry Banks Capital assets Capital structure Corporate taxes Debt financing Efficiency Emerging markets Hypotheses Long term debt Profit margins Profitability Recessions |
| title | The effect of capital structure, operating efficiency and non-interest income on bank profitability: new evidence from Asia |
| url | http://sfxeu10.hosted.exlibrisgroup.com/loughborough?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2024-09-23T08%3A17%3A53IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-proquest_cross&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=The%20effect%20of%20capital%20structure,%20operating%20efficiency%20and%20non-interest%20income%20on%20bank%20profitability:%20new%20evidence%20from%20Asia&rft.jtitle=Asian%20journal%20of%20economics%20and%20banking&rft.au=Mehzabin,%20Saima&rft.date=2023-03-24&rft.volume=7&rft.issue=1&rft.spage=25&rft.epage=44&rft.pages=25-44&rft.issn=2615-9821&rft.eissn=2633-7991&rft_id=info:doi/10.1108/AJEB-03-2022-0036&rft_dat=%3Cproquest_cross%3E2789198093%3C/proquest_cross%3E%3Cgrp_id%3Ecdi_FETCH-LOGICAL-c1866-3a0dd41411223d7e44d68411edac4c5043154bdb69b26a4b5aceb08149c708203%3C/grp_id%3E%3Coa%3E%3C/oa%3E%3Curl%3E%3C/url%3E&rft_id=info:oai/&rft_pqid=2789198093&rft_id=info:pmid/&rfr_iscdi=true |