Oil booms, bank productivity and natural resource curse in finance

Using a rich monthly microdata, this study is the first one to investigate the effect of commodity booms on bank productivity in the context of resource-endowed economies. Consistent with the axiom of a natural resource curse in finance, we find significant decline in banks’ total factor productivity (TFP) during episodes of oil booms. •Natural resource endowment can hinder financial development.•Study explores the effect of oil booms on bank-level productivity.•Empirical strategy exploits monthly microdata on Kazakh banking sector.•We find significant decline in banks’ total factor productivity during oil booms.•Poor bank productivity is an axiom of the natural resource curse in finance.