Bank profitability

a regional analysis by Burns, William

Publisher: Division of Business and Economic Research, College of Business Administration, University of New Orleans in [New Orleans]

Written in English
Published: Pages: 53 Downloads: 790
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Places:

  • Southern States.,
  • Louisiana,
  • New Orleans Metropolitan Area.

Subjects:

  • Banks and banking -- Southern States.,
  • Banks and banking -- Louisiana -- New Orleans Metropolitan Area.

Edition Notes

Statementby William Burns and Michele Burns.
SeriesResearch study / Division of Business and Economic Research, College of Business Administration, University of New Orleans ;, no. 40, Research study (University of New Orleans. Division of Business and Economic Research) ;, no. 40.
ContributionsBurns, Michele.
Classifications
LC ClassificationsHC107.L8 L58 no. 40, HG2604 L58 no. 40
The Physical Object
Paginationv, 53 leaves :
Number of Pages53
ID Numbers
Open LibraryOL3144826M
LC Control Number82622519

  Between and , the bank was forced to record losses of more than $10 billion, and it only barely returned to profitability in Since , its stock price has fallen 95 percent. Although profitability for the large credit card banks has fallen over the years, credit card earnings have almost always been higher than returns on all commercial bank activities. 4 Earnings patterns for were consistent with historical experience: The average return on all assets, before taxes and extraordinary items, was percent.   Profitability is closely related to profit – but with one key difference. While profit is an absolute amount, profitability is a relative one. It is the metric used to determine the scope of a.   But their profitability remains below their long-run cost of capital, which most banks estimate to be in the range of %. 1 Low profitability prospects translate into low bank valuations, as observed in price-to-book ratios well below one, hindering the ability to raise capital, where : Luis de Guindos.

Trends in bank profitability and factors affecting it are major indicators of changes in the state of health of national banking systems. This publication provides nationally aggregated financial statements of banks data for OECD member countries. The coverage of banks is not the same in each country, though the objective is to include all institutions that conduct ordinary banking business. To examine how profitability affects the value of your bank, we compare median P/TBV multiples for four groups of banks segmented by return on average tangible equity (Figures 3 and 4 on the prior page). A bank’s return on equity can be measured as the product of the asset base’s profitability (or return on assets) and balance sheet leverage. determinants of the profitability might have a wider dimension, considering not only the afore-mentioned internal determinants but also the external determinants of the bank’s profitability. Additionally, and no less importantly, the econometric analysis in most empirical literature does not take into consideration the classical problems of.   According to our profitability peer database, fully absorbed branch pre-tax profits as a percent of branch deposits declined % between the end of to today’s abysmal %. Direct branch pre-tax profits, which only takes into account direct branch operating expenses, declined 63% during that period to %.

profitability prospects translate into low bank valuations, as observed in price-to-book ratios well below one, hindering the ability to raise capital, where needed. European bank profitability has been structurally weak since well before unconventional monetary policy measures were introduced. Broadly speaking, the sources of that weakness can beAuthor: Luis de Guindos. Trends in bank profitability and factors affecting it are major indicators of changes in the state of health of national banking systems. This publication provides nationally aggregated financial statements of banks data for OECD member countries. The coverage of banks is not the same in each.   Ramlall (, p.2) divides the determinant factors of banking profitability into two groups: 1. External factors. They can be divided into further two categories: macroeconomic environment and market/industry characteristics. 2. Internal factors that is characteristics which are bank-specific. "Bank profitability and risk taking in a prolonged environment of low interest rates: a study of interest rate risk in the banking book of Dutch banks," DNB Working Cited by: 2.

Bank profitability by Burns, William Download PDF EPUB FB2

Bank Profitability. Like all businesses, banks profit by earning more money than what they pay in expenses. The major portion of a bank's profit comes from the fees that it charges for its services and the interest that it earns on its assets.

Its major expense is the interest paid on its liabilities. The purpose of this study was to assess the impact of financial innovations on the profitability of banks in Ghana.

A case study was carried out on Fidelity Bank Ghana Limited, to ascertain how the bank embarks on financial innovation and its impact. Banking Profitability and Performance Management measure the operational efficiency of a bank. Profitability based measurement on the other hand can serve as a more robust and inclusive means to measure terms of Price/ Book (P/B) multiple at which their shares trade.

Trends in bank profitability and factors affecting it are major indicators of changes in the state of health of national banking systems. These OECD statistics, based on financial statements of banks, provide a unique tool for analysing developments in bank profitability. ALSO AVAILABLE ON CD-ROM AND ON LINE Bank Profitability is also available on CD-ROM, in Beyond 20/20™ for.

Financial structure and bank profitability (English) Abstract. Countries differ in the extent to which their financial systems are bank-based or market-based.

The financial systems of Germany and Japan, for example, are considered bank-based because banks play Cited by:   The study of banking profitability involving a range of bank which is the biggest in scale belong to Demirguc-Kunt and Huizinga (). Their paper considered such banking characteristics as legal indicators, macroeconomic conditions, financial structure, size, taxation and regulation and others to study the determinants of bank profitability.

Moody’s|KMV Economics of the Bank and of the Loan Book 5 management activities of the bank from the underwriting and non-portfolio services of the bank. This decomposition is very useful in understanding bank performance, as these two parts of the bank have File Size: KB.

Equity will be a buffer for the bank when there is a fluctuation in profitability. Equity-to-assets ratio can have a positive or negative relationship with bank profitability.

A bank that has a relatively big portion of equity is a prudent bank; hence they have Author: Nuraini Yuanita. BANK PROFITABILITY: FINANCIAL STATEMENTS OF BANKS 1.

Standard framework for detailed statistics by country National data are grouped and, where necessary, re-classified to fit as far as possible into the following standard framework of presentation.

Income statement 1. Interest incomeFile Size: 10KB. Trends in bank profitability and factors affecting it are major indicators of changes in the state of health of national banking systems.

OECD statistics published annually under the title Bank Profitability -- Financial Statements of Banks, provide a unique tool for analysing developments in bank profitability in twenty-nine Member countries.

Cyclical factors have helped improve bank profitability in recent years. Bank performance is closely linked to economic activity. In fact, bank profitability has improved in the past few years on the back of continued economic growth, with euro area banks’ ROE reaching 6% in.

“Low-For-Long” Interest Rates and Banks’ Interest Margins and Profitability: Cross- Country Evidence Stijn Claessensa,b,c, Nicholas Colemana, and Michael Donnellya Abstract: Interest rates in many advanced economies have been low for almost a decade now and are often expected to remain by: 4.

Get this from a library. Bank Profitability. [OECD Publishing; Organisation for Economic Co-operation and Development] -- This publication complements Bank Profitability: Financial Statements of Banks.

The notes included in this volume were prepared to facilitate. To determine the profitability of banks, simply looking at the earnings per share isn't quite enough. It's also important to know how efficiently a bank is using its assets and equity to generate.

Bank Profitability and Risk Control: Economics Books @ Skip to main content. Try Prime Hello, Sign in Account & Lists Sign in Account & Lists Orders Try Prime Cart. Books. Go Search Today's Deals Best Sellers Customer Service Find a 3/5(1).

Fluctuations of bank profitability matter also because of the “bank capital channel” (Van den Heuvel, ), which is based on the hypothesis of an imperfect market for bank equity: banks cannot easily issue new equity because of the presence of agency costs and tax disadvantages (Myers and Majluf,Cornett and Tehranian, Cited by: Bank Performance: A Theoretical and Empirical Framework for the Analysis of Profitability, Competition and Efficiency (Routledge International Studies in Money and Banking Book 48) - Kindle edition by Bikker, Jacob, Bos, Jaap W.B.

Download it once and read it on your Kindle device, PC, phones or tablets. Use features like bookmarks, note taking and highlighting while reading Bank Performance 3/5(1). Economic literature pays a great deal of attention to the performance of banks, expressed in terms of competition, concentration, efficiency, productivity and profitability.

This book provides an. In the literature, bank profitability is usually expressed as a function of internal and external determinants.

The internal determinants originate from bank accounts (balance sheets and/or profit and loss accounts) and therefore could be termed micro or bank-specific determinants of profitability.

Measuring Lending Profitability at the Loan Level: An Introduction FINANCIAL PERFORMANCE market, and uses its own cost of funds as a pricing assumption, the conclusion will invariably be that all of their loans are extremely profitable, and that the bank can offer the lowest loan rates in File Size: 1MB.

How to Calculate Profitability Ratios for Banks. In an economy that is ever-fluctuating, investors want to know that their money is safe. Since some banks have performed financial belly-flops, you may want to investigate a bank's profitability before you place your money in their care.

Three primary measures of. Over this period, bank funding costs have been exceptionally low, but the average rates of return on bank assets have continued to fall.

Loans made in the past at relatively high interest rates have been replaced by new loans with lower interest rates as well as by low-yielding reserves and securities.

Profitability is the degree to which an activity yields profit or financial gain. While this concept is simple to understand, in reviewing a bank’s financial statements where profitability can be easily measured for past performance, bankers often don’t measure the profitability of a loan at inception and certainly not with the same level of certainty.

This is especially true when the loan. This paper investigates the determinants of bank profitability in the light of bank specific variables, industry related factors and macroeconomic influences, using a panel of selected banks that Author: Eze Simpson Osuagwu. The price-to-book (P/B) ratio is an evaluation metric that is used to compare the current market price of a company’s stock to its book P/B ratio is favored by value investors for its.

Impact of NPAs on Bank Profitability: An Empirical Study: /ch NPA is a “termite” for the banking sector. It affects liquidity and profitability of the bank to a great extent; in addition, it also poses a threat to theAuthor: Saurabh Sen, Ruchi L. Sen. Trends in bank profitability and factors affecting it are major indicators of changes in the state of health of national banking systems.

This publication provides nationally aggregated financial statements of banks data for OECD member countries. How have other sources of bank profitability changed over time. Ninth District banks' net income or profit was up a healthy 23 percent from to Part of this increase came from higher net interest income, the difference between what banks earned from.

on the determinants of bank profitability (ROAA, ROAE, and risk-adjusted returns) and the price-to-book ratio, high problem loans ratios, high funding costs, and low-cost efficiency (cost-to-income ratio) are associated with low bank profitability.

This paper contributes to the existing literature on bank profitability and financial stabilityAuthor: TengTeng Xu, Kun Hu, Udaibir S Das. But their profitability remains below their long-run cost of capital, which most banks estimate to be in the range of %.

1 Low profitability prospects translate into low bank valuations, as observed in price-to-book ratios well below one, hindering the ability to raise capital, where : Reg Hub. Downloadable! This paper examines the impact of negative policy interest rate (NPIR) on bank profitability.

In particular, we analyze the impact on its profitability after adding the gap cost to the Monti-Klein()'s bank profit function which considers three important interest rates in the monetary policy transmission- interbank rate, deposit rate, and loan : Jae-Joon Han, Inhwan So.Understanding Bank Profitability MarchThis program is designed to provide an overview of the key factors that drive bank profitability and to promote a better understanding of financial statements and key financial ratios.

Abreu M., Mendes V. (), Commercial bank interest margins and profitability: evidence for Some EU Countries, Proceedings of the Pan-European Conference Jointly organized by the IEFS-UK & University of Macedonia Economic and Social Sciences, Thessaloniki, Greece, 17–20 : Mariarosa Borroni, Simone Rossi.