An Empirical Analysis of Non-Interest Income's Effect on Commercial Bank Performance
The share of non-interest income in commercial banks' operating revenue has steadily risen, dramatically affecting their overall operational performance. Using panel data for sixteen Chinese listed commercial banks from 2007 to 2013, variable intercept and variable coefficient models were cons...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Austrian Statistical Society
2024-12-01
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| Series: | Austrian Journal of Statistics |
| Online Access: | https://www.ajs.or.at/index.php/ajs/article/view/1875 |
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| _version_ | 1841543700441726976 |
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| author | Yimeng Wang Aisyah Abdul-Rahman Syajarul Imna Mohd Amin Ainul Huda Jamil |
| author_facet | Yimeng Wang Aisyah Abdul-Rahman Syajarul Imna Mohd Amin Ainul Huda Jamil |
| author_sort | Yimeng Wang |
| collection | DOAJ |
| description |
The share of non-interest income in commercial banks' operating revenue has steadily risen, dramatically affecting their overall operational performance. Using panel data for sixteen Chinese listed commercial banks from 2007 to 2013, variable intercept and variable coefficient models were constructed, accounting for variables including macroeconomic growth rate. The impact of non-interest revenue on the performance of commercial banks was empirically investigated, together with the quantity of bank assets and the cost-to-income ratio. The study results indicate a sizeable negative association with operational costs and a substantial positive correlation with total bank assets, macroeconomic growth, and commercial bank performance. However, the effect of non-interest income on performance differs depending on the kind of commercial bank. Central state-owned commercial banks' non-interest revenue and performance are favorably correlated; nevertheless, urban commercial banks' non-interest revenue and performance are negatively correlated. Therefore, it is recommended that Chinese commercial banks formulate differentiated development strategies based on their characteristics to enhance overall profitability.
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| format | Article |
| id | doaj-art-7b237d5c80fb4d349de75144524cf355 |
| institution | Kabale University |
| issn | 1026-597X |
| language | English |
| publishDate | 2024-12-01 |
| publisher | Austrian Statistical Society |
| record_format | Article |
| series | Austrian Journal of Statistics |
| spelling | doaj-art-7b237d5c80fb4d349de75144524cf3552025-01-13T07:12:25ZengAustrian Statistical SocietyAustrian Journal of Statistics1026-597X2024-12-0153510.17713/ajs.v53i5.1875An Empirical Analysis of Non-Interest Income's Effect on Commercial Bank PerformanceYimeng Wang0Aisyah Abdul-RahmanSyajarul Imna Mohd AminAinul Huda Jamil Universiti Kebangsaan Malaysia The share of non-interest income in commercial banks' operating revenue has steadily risen, dramatically affecting their overall operational performance. Using panel data for sixteen Chinese listed commercial banks from 2007 to 2013, variable intercept and variable coefficient models were constructed, accounting for variables including macroeconomic growth rate. The impact of non-interest revenue on the performance of commercial banks was empirically investigated, together with the quantity of bank assets and the cost-to-income ratio. The study results indicate a sizeable negative association with operational costs and a substantial positive correlation with total bank assets, macroeconomic growth, and commercial bank performance. However, the effect of non-interest income on performance differs depending on the kind of commercial bank. Central state-owned commercial banks' non-interest revenue and performance are favorably correlated; nevertheless, urban commercial banks' non-interest revenue and performance are negatively correlated. Therefore, it is recommended that Chinese commercial banks formulate differentiated development strategies based on their characteristics to enhance overall profitability. https://www.ajs.or.at/index.php/ajs/article/view/1875 |
| spellingShingle | Yimeng Wang Aisyah Abdul-Rahman Syajarul Imna Mohd Amin Ainul Huda Jamil An Empirical Analysis of Non-Interest Income's Effect on Commercial Bank Performance Austrian Journal of Statistics |
| title | An Empirical Analysis of Non-Interest Income's Effect on Commercial Bank Performance |
| title_full | An Empirical Analysis of Non-Interest Income's Effect on Commercial Bank Performance |
| title_fullStr | An Empirical Analysis of Non-Interest Income's Effect on Commercial Bank Performance |
| title_full_unstemmed | An Empirical Analysis of Non-Interest Income's Effect on Commercial Bank Performance |
| title_short | An Empirical Analysis of Non-Interest Income's Effect on Commercial Bank Performance |
| title_sort | empirical analysis of non interest income s effect on commercial bank performance |
| url | https://www.ajs.or.at/index.php/ajs/article/view/1875 |
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