Bank diversification and performance: Empirical evidence from Japan
This article examines the relationship between bank diversification and performance in the Japanese banking sector. We use panel data from 141 banks over the period 2000–2022 to investigate whether banks can improve profitability and reduce risk through diversification strategies. Our evidence shows...
Gespeichert in:
Veröffentlicht in: | International review of finance 2024-09, Vol.24 (3), p.449-492 |
---|---|
1. Verfasser: | |
Format: | Artikel |
Sprache: | eng |
Schlagworte: | |
Online-Zugang: | Volltext |
Tags: |
Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
|
container_end_page | 492 |
---|---|
container_issue | 3 |
container_start_page | 449 |
container_title | International review of finance |
container_volume | 24 |
creator | Wu, Yichang |
description | This article examines the relationship between bank diversification and performance in the Japanese banking sector. We use panel data from 141 banks over the period 2000–2022 to investigate whether banks can improve profitability and reduce risk through diversification strategies. Our evidence shows that diversification can improve bank profitability at the cost of a decline in net interest margins, suggesting banks are using the interest business as a loss leader to promote other business lines. We find that asset diversification has a risk‐reducing effect, which supports the portfolio hypothesis. Some evidence also implies that there is a more complex nonlinear relationship. This can be partly attributed to bank type, as the diversification effects vary across different types of banks. Furthermore, the decomposition of non‐interest income reveals that fees and commissions negatively influence return on assets while simultaneously reducing bank risk. |
doi_str_mv | 10.1111/irfi.12449 |
format | Article |
fullrecord | <record><control><sourceid>proquest_cross</sourceid><recordid>TN_cdi_proquest_journals_3130572945</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><sourcerecordid>3130572945</sourcerecordid><originalsourceid>FETCH-LOGICAL-c2939-3747a70623c4fb7228cbe823fd99e7b700fc1d2a50d2075ca125b03986d0c6a63</originalsourceid><addsrcrecordid>eNp9kFtLAzEQhYMoWGpf_AUB34StuW2y8U2XVisFQRR8C9lcINq9mLSV_ntT12fnZQ4z35yBA8AlRnOc6yZEH-aYMCZPwAQzXhVZ09OsKZcFw-T9HMxSCg0qaUWp4HgC6nvdfUIb9i6m4IPR29B3UHcWDi76Pra6M-4WLtohxLzdQLcP1uUZ9LFv4ZMedHcBzrzeJDf761Pwtly81o_F-vlhVd-tC0MklQUVTGiBOKGG-UYQUpnGVYR6K6UTjUDIG2yJLpElSJRGY1I2iMqKW2S45nQKrkbfIfZfO5e26qPfxS6_VBRTVAoiWZmp65EysU8pOq-GGFodDwojdcxJHXNSvzllGI_wd9i4wz-kWr0sV-PND6Y-aX0</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>3130572945</pqid></control><display><type>article</type><title>Bank diversification and performance: Empirical evidence from Japan</title><source>Access via Wiley Online Library</source><creator>Wu, Yichang</creator><creatorcontrib>Wu, Yichang</creatorcontrib><description>This article examines the relationship between bank diversification and performance in the Japanese banking sector. We use panel data from 141 banks over the period 2000–2022 to investigate whether banks can improve profitability and reduce risk through diversification strategies. Our evidence shows that diversification can improve bank profitability at the cost of a decline in net interest margins, suggesting banks are using the interest business as a loss leader to promote other business lines. We find that asset diversification has a risk‐reducing effect, which supports the portfolio hypothesis. Some evidence also implies that there is a more complex nonlinear relationship. This can be partly attributed to bank type, as the diversification effects vary across different types of banks. Furthermore, the decomposition of non‐interest income reveals that fees and commissions negatively influence return on assets while simultaneously reducing bank risk.</description><identifier>ISSN: 1369-412X</identifier><identifier>EISSN: 1468-2443</identifier><identifier>DOI: 10.1111/irfi.12449</identifier><language>eng</language><publisher>Melbourne: John Wiley & Sons Australia, Ltd</publisher><subject>bank diversification ; bank risk ; Japanese banks ; profitability</subject><ispartof>International review of finance, 2024-09, Vol.24 (3), p.449-492</ispartof><rights>2024 International Review of Finance Ltd.</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><cites>FETCH-LOGICAL-c2939-3747a70623c4fb7228cbe823fd99e7b700fc1d2a50d2075ca125b03986d0c6a63</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://onlinelibrary.wiley.com/doi/pdf/10.1111%2Firfi.12449$$EPDF$$P50$$Gwiley$$H</linktopdf><linktohtml>$$Uhttps://onlinelibrary.wiley.com/doi/full/10.1111%2Firfi.12449$$EHTML$$P50$$Gwiley$$H</linktohtml><link.rule.ids>314,780,784,1417,27924,27925,45574,45575</link.rule.ids></links><search><creatorcontrib>Wu, Yichang</creatorcontrib><title>Bank diversification and performance: Empirical evidence from Japan</title><title>International review of finance</title><description>This article examines the relationship between bank diversification and performance in the Japanese banking sector. We use panel data from 141 banks over the period 2000–2022 to investigate whether banks can improve profitability and reduce risk through diversification strategies. Our evidence shows that diversification can improve bank profitability at the cost of a decline in net interest margins, suggesting banks are using the interest business as a loss leader to promote other business lines. We find that asset diversification has a risk‐reducing effect, which supports the portfolio hypothesis. Some evidence also implies that there is a more complex nonlinear relationship. This can be partly attributed to bank type, as the diversification effects vary across different types of banks. Furthermore, the decomposition of non‐interest income reveals that fees and commissions negatively influence return on assets while simultaneously reducing bank risk.</description><subject>bank diversification</subject><subject>bank risk</subject><subject>Japanese banks</subject><subject>profitability</subject><issn>1369-412X</issn><issn>1468-2443</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2024</creationdate><recordtype>article</recordtype><recordid>eNp9kFtLAzEQhYMoWGpf_AUB34StuW2y8U2XVisFQRR8C9lcINq9mLSV_ntT12fnZQ4z35yBA8AlRnOc6yZEH-aYMCZPwAQzXhVZ09OsKZcFw-T9HMxSCg0qaUWp4HgC6nvdfUIb9i6m4IPR29B3UHcWDi76Pra6M-4WLtohxLzdQLcP1uUZ9LFv4ZMedHcBzrzeJDf761Pwtly81o_F-vlhVd-tC0MklQUVTGiBOKGG-UYQUpnGVYR6K6UTjUDIG2yJLpElSJRGY1I2iMqKW2S45nQKrkbfIfZfO5e26qPfxS6_VBRTVAoiWZmp65EysU8pOq-GGFodDwojdcxJHXNSvzllGI_wd9i4wz-kWr0sV-PND6Y-aX0</recordid><startdate>202409</startdate><enddate>202409</enddate><creator>Wu, Yichang</creator><general>John Wiley & Sons Australia, Ltd</general><general>Blackwell Publishing Ltd</general><scope>AAYXX</scope><scope>CITATION</scope></search><sort><creationdate>202409</creationdate><title>Bank diversification and performance: Empirical evidence from Japan</title><author>Wu, Yichang</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c2939-3747a70623c4fb7228cbe823fd99e7b700fc1d2a50d2075ca125b03986d0c6a63</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2024</creationdate><topic>bank diversification</topic><topic>bank risk</topic><topic>Japanese banks</topic><topic>profitability</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Wu, Yichang</creatorcontrib><collection>CrossRef</collection><jtitle>International review of finance</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Wu, Yichang</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Bank diversification and performance: Empirical evidence from Japan</atitle><jtitle>International review of finance</jtitle><date>2024-09</date><risdate>2024</risdate><volume>24</volume><issue>3</issue><spage>449</spage><epage>492</epage><pages>449-492</pages><issn>1369-412X</issn><eissn>1468-2443</eissn><abstract>This article examines the relationship between bank diversification and performance in the Japanese banking sector. We use panel data from 141 banks over the period 2000–2022 to investigate whether banks can improve profitability and reduce risk through diversification strategies. Our evidence shows that diversification can improve bank profitability at the cost of a decline in net interest margins, suggesting banks are using the interest business as a loss leader to promote other business lines. We find that asset diversification has a risk‐reducing effect, which supports the portfolio hypothesis. Some evidence also implies that there is a more complex nonlinear relationship. This can be partly attributed to bank type, as the diversification effects vary across different types of banks. Furthermore, the decomposition of non‐interest income reveals that fees and commissions negatively influence return on assets while simultaneously reducing bank risk.</abstract><cop>Melbourne</cop><pub>John Wiley & Sons Australia, Ltd</pub><doi>10.1111/irfi.12449</doi><tpages>44</tpages></addata></record> |
fulltext | fulltext |
identifier | ISSN: 1369-412X |
ispartof | International review of finance, 2024-09, Vol.24 (3), p.449-492 |
issn | 1369-412X 1468-2443 |
language | eng |
recordid | cdi_proquest_journals_3130572945 |
source | Access via Wiley Online Library |
subjects | bank diversification bank risk Japanese banks profitability |
title | Bank diversification and performance: Empirical evidence from Japan |
url | https://sfx.bib-bvb.de/sfx_tum?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2024-12-24T18%3A10%3A30IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-proquest_cross&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=Bank%20diversification%20and%20performance:%20Empirical%20evidence%20from%20Japan&rft.jtitle=International%20review%20of%20finance&rft.au=Wu,%20Yichang&rft.date=2024-09&rft.volume=24&rft.issue=3&rft.spage=449&rft.epage=492&rft.pages=449-492&rft.issn=1369-412X&rft.eissn=1468-2443&rft_id=info:doi/10.1111/irfi.12449&rft_dat=%3Cproquest_cross%3E3130572945%3C/proquest_cross%3E%3Curl%3E%3C/url%3E&disable_directlink=true&sfx.directlink=off&sfx.report_link=0&rft_id=info:oai/&rft_pqid=3130572945&rft_id=info:pmid/&rfr_iscdi=true |