Browse > Article
http://dx.doi.org/10.17703/JCCT.2019.5.4.277

A Study on Determinants of Financial Soundness of Savings Banks  

Bae, Soo Hyun (Business School. Daegu Catholic University)
Publication Information
The Journal of the Convergence on Culture Technology / v.5, no.4, 2019 , pp. 277-282 More about this Journal
Abstract
This study analyzed the determinants of the financial Soundness of savings banks. In particular, empirical analysis was carried out on how the loan deposit ratio correlates with financial soundness after restructuring. As the restructuring of savings banks was finalized in 2014, asset management changed and it is time to analyze the financial characteristics of savings banks. In summary, the relationship between the savings bank lending rate and the NPL ratio is estimated to have a negative value at the 1% significance level. In other words, the higher the mortgage rate, the lower the substandard and below ratio. It can be said that it is not easy for a savings bank to build an aggressive loan portfolio. In other words, the more difficult it is to finance loans through savings deposits, the more likely the risk aversion tends to be. The higher the corporate loan ratio, average interest expense, and economic growth rate, the higher the risk index. The larger the asset size and the higher the loan growth rate, the lower the risk index. Increasing the mortgage rate may reduce risk-seeking behavior, but it does not mean that it is unconditionally positive for savings banks. Therefore, the loan deposit rate regulation should reduce the incentives for excessive asset expansion and manage preemptive soundness through lending portfolio management.
Keywords
Savings Banks; Loan Deposit Ratio; Financial Soundness; NPL ratio;
Citations & Related Records
Times Cited By KSCI : 1  (Citation Analysis)
연도 인용수 순위
1 Jong-Hee Kim, "A Study on the Impact of Financial Regulation on the Behavior of Banks' Loan Concentration" Journal of Knowledge Studies, Vol. 17, No. 2, pp. 59-92, 2019.   DOI
2 Ji Yong Seo, "The Study on Influence from Change of Financial Soundness of Korean Banks over Loan Portfolio", Industrial Economics Research, Vol. 24, No. 4, pp. 2075-2088, 2011.
3 Kyu-bok Lee, Soojin Lee, "Analysis and Implication of Loan Portfolios by Characteristics of Saving Banks in Korea after Recent Restructuring", KIF Research Report, pp. 1-87, 2017.
4 Soo Hyun Bae, "A Study on the Financial Stability of Saving Banks Small-Credit Loans, Global business administration review, Vol. 14, No. 3, pp. 99-118, 2017.   DOI
5 Minhyuk Kim, Jinwoo Park, "Regulation and Bank Risk:Evidence from Savings Banks in Korea", The Korean Journal of Financial Management, Vol. 35, No. 2, pp. 233-256, 2018. https://doi.org/10.22510/kjofm.2018.35.2.008   DOI
6 Tae Hoon Yeon, "Competition and Risk-Taking in Korean Mutual Savings Banks" KIF Research Report, pp. 1-55, 2018.
7 Hardy, Daniel C. and Ceyla Pazarba io lu, "Leading Indicators of Banking Crises: Was Asia Different?", IMF Working Paper 98/91, Jun, 1998. https://doi.org/10.5089/9781451951745.001
8 Cole, Rebel A..Jeffery W. Gunther, "Separating the likelihood and timing of bank failure", Journal of Banking & Finance, Vol. 19, pp. 1073-1089, 1995. https://doi.org/10.1016/0378-4266(95)98952-m   DOI
9 Foos, Daniel, Lars Norden and Martin Weber, "Loan Growth and Riskiness of Banks", Journal of Banking and Fianace, 34, pp. 2929-2940, 2010. https://doi.org/10.1016/j.jbankfin.2010.06.007   DOI
10 Soo Hyun Bae, "The Effects of Ownership Concentration on Savings Bank Diversification by using Panel Data" The Journal of the Convergence on Culture Technology (JCCT), Vol. 5, No. 2, pp. 77-82, 2019.   DOI
11 Korea Institute of Finance, "Proposed amendment to the Enforcement Decree of the Mutual Savings Bank Act, including the introduction of a regulation on savings bank business rights" Korea Institute of Finance Press release, pp. 1-2, 2019.
12 Maeil Business Newspaper Press Release, https://www.mk.co.kr/news/economy/view/2019/01/54008/.
13 Changwon Ryu, "Risk Factors and Prospects of Savings Bank Business Rights" Financial Risk Review, Hana Institute of Finance, pp. 112-117, 2016.