Bank performance and Non-interest income diversification: Evidence from Chinese commercial banks.
This paper aims to investigate the impact of non-interest income diversification on the performance of commercial banks in China. We conduct an empirical analysis using the panel data of 159 Chinese commercial banks from 2006 to 2020. The results indicate that there is a positive relationship betwee...
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| Format: | Article |
| Language: | English |
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Public Library of Science (PLoS)
2025-01-01
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| Series: | PLoS ONE |
| Online Access: | https://doi.org/10.1371/journal.pone.0321899 |
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| _version_ | 1849309837869973504 |
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| author | Yuan Zhao Yixi Mei Jun Wang |
| author_facet | Yuan Zhao Yixi Mei Jun Wang |
| author_sort | Yuan Zhao |
| collection | DOAJ |
| description | This paper aims to investigate the impact of non-interest income diversification on the performance of commercial banks in China. We conduct an empirical analysis using the panel data of 159 Chinese commercial banks from 2006 to 2020. The results indicate that there is a positive relationship between the degree of non-interest income diversification and bank performance. We suggest the commercial banks to actively develop diversified non-interest business and to balance the proportion of interest and non-interest income. Furthermore, we conduct heterogeneity analysis and find remarkable differences existing among different types of commercial banks. The results show that the effect of non-interest income diversification on bank performance is more significant for the small-sized or local commercial banks whose target customers are local residents. We also take a further analysis with interaction terms and find that the positive effect of non-interest income diversification on bank performance is stronger for those with higher market competitiveness. Our findings have implications for bank managers about expanding banks' income resources through diversified business strategies and can provide experience for small or local banks seeking to advance the performance. |
| format | Article |
| id | doaj-art-e5b0d59df0684797b42cdd209c706da2 |
| institution | Kabale University |
| issn | 1932-6203 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | Public Library of Science (PLoS) |
| record_format | Article |
| series | PLoS ONE |
| spelling | doaj-art-e5b0d59df0684797b42cdd209c706da22025-08-20T03:53:57ZengPublic Library of Science (PLoS)PLoS ONE1932-62032025-01-01205e032189910.1371/journal.pone.0321899Bank performance and Non-interest income diversification: Evidence from Chinese commercial banks.Yuan ZhaoYixi MeiJun WangThis paper aims to investigate the impact of non-interest income diversification on the performance of commercial banks in China. We conduct an empirical analysis using the panel data of 159 Chinese commercial banks from 2006 to 2020. The results indicate that there is a positive relationship between the degree of non-interest income diversification and bank performance. We suggest the commercial banks to actively develop diversified non-interest business and to balance the proportion of interest and non-interest income. Furthermore, we conduct heterogeneity analysis and find remarkable differences existing among different types of commercial banks. The results show that the effect of non-interest income diversification on bank performance is more significant for the small-sized or local commercial banks whose target customers are local residents. We also take a further analysis with interaction terms and find that the positive effect of non-interest income diversification on bank performance is stronger for those with higher market competitiveness. Our findings have implications for bank managers about expanding banks' income resources through diversified business strategies and can provide experience for small or local banks seeking to advance the performance.https://doi.org/10.1371/journal.pone.0321899 |
| spellingShingle | Yuan Zhao Yixi Mei Jun Wang Bank performance and Non-interest income diversification: Evidence from Chinese commercial banks. PLoS ONE |
| title | Bank performance and Non-interest income diversification: Evidence from Chinese commercial banks. |
| title_full | Bank performance and Non-interest income diversification: Evidence from Chinese commercial banks. |
| title_fullStr | Bank performance and Non-interest income diversification: Evidence from Chinese commercial banks. |
| title_full_unstemmed | Bank performance and Non-interest income diversification: Evidence from Chinese commercial banks. |
| title_short | Bank performance and Non-interest income diversification: Evidence from Chinese commercial banks. |
| title_sort | bank performance and non interest income diversification evidence from chinese commercial banks |
| url | https://doi.org/10.1371/journal.pone.0321899 |
| work_keys_str_mv | AT yuanzhao bankperformanceandnoninterestincomediversificationevidencefromchinesecommercialbanks AT yiximei bankperformanceandnoninterestincomediversificationevidencefromchinesecommercialbanks AT junwang bankperformanceandnoninterestincomediversificationevidencefromchinesecommercialbanks |