• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.1101-1111
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• 2021

The current study aims to investigate the influence of different categories of ownership held by different types of board members on bank performance. The study uses a sample of Saudi listed banks for the period from 2011 to 2018. The results of the panel data analysis using firm fixed-effects regression model indicate that bank performance is significantly and positively affected by the chairman ownership and the CEO ownership. However, board independent members' ownership has a negative influence on bank performance. While non-executive board members' ownership and family board members have an insignificant impact on bank performance. Control variables, including board size, non-executive board members, government ownership, leverage, and bank size are significantly associated with bank performance. Overall, the results indicate that Saudi bank performance is higher in smaller banks that have smaller boards with lower non-executive members, lower portion of shares held by independent board members, higher portion of shares held by the chairman, CEO, and government, and higher leverage. The results of this study provide important implications for regulatory authorities and market participants in Saudi Arabia and countries with ownership concentration to understand the actual role of different categories of board ownership on firm performance in addition to optimize board ownership.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.11
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• pp.647-656
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• 2020

This study empirically examines the effect of ownership structure on bank diversification and risk-taking behavior. The population of this study is based on all commercial banks listed in Bangladesh. Thirty-two conventional commercial banks were randomly selected from thirty-three conventional banks for this study. Data was collected from the annual reports of the concerned banks from 2000 to 2017. To analyze the data, we had applied the two-stage least squares (2SLS) estimator. The results of the analysis show that ownership structure i.e. managerial ownership, institutional ownership, general public ownership, and ownership concentration have a significant negative impact on bank diversification. On the other hand, institutional ownership, managerial ownership, and general public ownership have a significant positive impact on Z-score, and ownership concentration has an insignificant but positive impact on the Z-score of banks in Bangladesh. Therefore, the study opposes the benefits of diversification and promotes ownership structure which is capable of ensuring better financial stability by reducing the probability of risk. The policy-makers especially, Bangladesh banks should evaluate the fact of this study to issue guidelines on corporate governance, bank diversification, and risk-taking behavior of commercial banks.

• Journal of Digital Convergence
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• v.11 no.4
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• pp.177-188
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• 2013

This study examines how managerial ownership structure affects the borrower's choice of private versus public debt using 2,608 firm-year data for 2006-2008. This paper investigates the relationship between managerial ownership structure and debt choice. Managerial ownership is measured using number of stocks and unexercised stock-options and debt is classified public and private debt. The results find that there is a positive association between managerial ownership and the private debt dependence and also find that when firms finance additional funds, higher managerial ownership leads managers to choose private debt not public debt. Since private debt can be classified into bank debt and non bank debt, this paper examines the relationship between managerial ownership and a choice of bank debt. The results indicate that managers with higher ownership are more likely to use bank debt over public debt and non bank debt. By examining the relation between managerial ownership and a debt choice, this paper has following contributions. First, this study shows that managerial ownership affects the choice of the source of financing using three different proxies of managerial ownership. Second, this study classified private debt into bank debt and non-bank debt and provide the evidence of preference toward private debt especially bank debt among other financing sources. Finally, there are extensive studies related to capital structure and managerial ownership, but there is little empirical research on the debt choice and managerial ownership. Thus, this paper adds to literature by exploring the effects of managerial ownership on a debt choice.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.10
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• pp.675-685
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• 2020

The main purpose of this study is to investigate the potential effect of ownership concentration on the relationship between board composition and bank performance. The study employs a sample of Saudi banks listed on Saudi stock exchange (TADAUWL) over the period from 2011 to 2018. To test the study hypotheses and control for endogeneity issues, the Ordinary Least Square (OLS) and the Two-Stage Least Squares (2SLS) techniques are used. The empirical results reveal a significant negative moderating effect of ownership concentration on the association between board composition and bank performance, which confirms the study argument and supports hypotheses. The results indicate that board composition in terms of independent board members, executive board members, and non-executive board members in banks with higher ownership concentration have a weaker positive influence on bank performance. For control variables, the results are almost consistent with theoretical perspectives and previous empirical evidence. The results of this study have important implications for regulatory authorities, companies, and market participants in Saudi Arabia and countries with high concentrated ownership to understand how ownership concentration could affect corporate governance and firm performance and to identify appropriate actions to protect board composition from the influence of ownership concentration.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.5
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• pp.305-311
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• 2022

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is projected to provide several chances for Vietnam's banking industry to expand into the international market. This study examines the influence of foreign ownership on credit risk in Vietnamese commercial banks before the context of participation in the CPTPP. Using a sample of 28 commercial banks between 2009 and 2020, we find that foreign ownership has a negative relationship with bank credit risk. The regression methods used include the least-squares method, fixed-effects model, random effects model, and general least squares method. The research model adds interactive variables, which will help to reflect the role of intermediary factors more accurately such as listing on the stock market, capital ratio to the relationship between foreign ownership and bank credit risk. The test results reveal that increasing the foreign ownership ratio has a bigger impact on reducing credit risk for listed banks and banks with low capital than for other commercial banks. The government should flexibly adjust the foreign ownership ratio according to the capital size and role of each bank so that it can make good use of investment capital from abroad when Vietnam joins the CPTPP.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.3
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• pp.43-51
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• 2022

This paper examines the main factors affecting the bank performance under the Basel II implementation in Vietnam, a transitional economy in Asia. We pay special attention to the implementation duration of the Basel II convention and how it affects profitability. Thereby, we can evaluate the effectiveness of Basel II in the whole system according to the roadmap to 2020. We employ the panel data regression method to analyze a sample of 300 bank-year observations from 25 commercial banks during the 2008-2019 period. Our empirical findings show that the size of the bank, net interest margin, state ownership, and Basel II convention have positive effects on bank profitability. However, our empirical findings indicate that bank age and branch number negatively reduce bank performance. Finally, our results indicate that commercial banks earn extra profit from delaying the implementation of Basel II. However, commercial banks will encounter higher credit, and operational risks arising from delaying the implementation of Basel II standards. Therefore, our study contributes to the insights into the bank's management to enhance profitability, especially after implementing Basel II in a transitional economy. Finally, our study also provides policy implications for bank managers and banking supervisory to maintain the sustainable development of the banking system.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.10
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• pp.327-339
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• 2021

This study examines the impact of bank restructuring on the financial performance of commercial banks in Vietnam. The data for this study was obtained from the audited financial statements of 30 Vietnamese commercial banks from 2007 to 2019. Multiple regression analysis was used for investigation. Financial performance, as evaluated by ROAA, ROEA, and NIM, is the dependent variable. Financial restructuring, ownership restructuring, and operational restructuring are the independent variables. Pooled least squares (Pooled OLS), fixed effects model (FEM), random effects model (REM), and system generalized moment regression model (System GMM) are the estimate methods used to increase the accuracy of the regression coefficient. The research results show that the variables of financial restructuring activities such as government intervention and the ratio of equity to total assets; variables of ownership restructuring such as capital adequacy ratio, privatization of state-owned commercial banks, mergers, and acquisitions; variables of operational restructuring such as employees, branches, the cost to total assets; GDP variables and the second restructuring period have a positive impact on financial performance. Variables such as debt-to-capital ratio, bad debt ratio, state ownership ratio, expense-income ratio, and inflation have a negative effect on financial performance.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.7
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• pp.195-201
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• 2021

This study aims to assess the impact of ownership structure of commercial banks on bank credit risk in Vietnam. The authors used the unbalanced table data of 28 commercial banks in the period from 2004 to 2020 with 439 observations. The ratio of loan loss provisioning to loans (CR) is selected as a dependent variable representing credit risk at commercial banks. The regression methods used include: least squares method (OLS), fixed-effect model (FEM), random-effect model (REM) and general least squares method (GLS). The results reveal that, with interaction variable between the ratio of equity to total assets and foreign ownership, the national GDP annual growth rate is negatively associated with credit risk. With the ratio of equity to total assets, the interaction variable between equity and state ownership, and bank size have a significant positive impact on credit risk. In addition, inflation has negligible impact on the credit risk of commercial banks in Vietnam over the research period. The findings of this study suggest that, if foreign-owned banks increase equity capital, there will be a stronger impact on reducing credit risk than other banks. On the other hand, when state-owned commercial banks in Vietnam increase equity, they will have higher credit risk.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.9
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• pp.1-10
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• 2020

The purpose of this study is to investigate the relationship between diversification and the performance of commercial banks, while taking into account the ownership status of these banks in Sri Lanka. Two-way relationship between diversification and performance was scrutinised by employing the 2SLS regression technique. The data consists of 17 registered commercial bank in Sri Lanka between 2001-2016. The results show a strong significant bidirectional relationship exists between diversification and bank performance. The performance of Sri Lankan banks has been significantly improved by their diversification attempts. In other words, the banks whose incomes are more diversified from various sources, they are more profitable and successful in long-term. On the other hands, the results also reveal that bank performance positively and significantly affects diversification. This finding suggests that the banks with great profitability are more capable in diversify their operations. Furthermore, private sector banks, both listed and unlisted, are significantly more diversified than their government-owned counterparts, but their performance is not necessarily superior to government-owned banks. This may be the result of the economic environment and the perception of the public, which have allowed the government-owned banks to entertain significant market power over the private sector banks in the country.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.15 no.8
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• pp.4895-4900
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• 2014

This study examined the impact of Government-ownership of banks on the firm size using South Korean data. The impact of Government ownership of banks as both the largest lender of government banks and the bank loan dependency of firms on government-ownership bank were measured. Empirical models considering endogenous problems and various effects of firm size were developed. All results in this paper showed that government-ownership of the main banks might have a relationship with the smaller firms. In addition, the bank loan dependency of firms on government-ownership banks might have effects on the firm size. A higher loan dependency of firms on government-owned banks resulted in smaller firms. This study used micro firm level data to analyze, from several perspectives, the relationship between government-owned banks and firm size. The existing studies go as far as inferring the effects of government-owned banks showing theoretical evidence, performing surveys, or using international comparison data. This study is differentiated from existing studies in that it analyzed in a direct manner the effects of the government-owned banks on both the firm size. This study provides insights into the privatization of government-owned banks.