Abstract
| Original language | English |
|---|---|
| Pages (from-to) | 69 - 85 |
| Number of pages | 17 |
| Journal | Journal of Asian Economics |
| Volume | 41 |
| DOIs | |
| Publication status | Published - 2015 |
Cite this
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Bank diversification, performance and stock market response: Evidence from listed public banks in South Asian countries. / Edirisuriya, Piyadasa; Gunasekarage, Abeyratna; Dempsey, Michael Joseph.
In: Journal of Asian Economics, Vol. 41, 2015, p. 69 - 85.Research output: Contribution to journal › Article › Research › peer-review
TY - JOUR
T1 - Bank diversification, performance and stock market response: Evidence from listed public banks in South Asian countries
AU - Edirisuriya, Piyadasa
AU - Gunasekarage, Abeyratna
AU - Dempsey, Michael Joseph
PY - 2015
Y1 - 2015
N2 - Our concern in the present paper is with the financial viability of banks in the recently liberalised economies of the South Asian region as they have diversified their revenue and assets bases. To this end, we examine how stock markets have responded to bank diversification in this region over the period start-1999 to end-2012. We find that when banks diversify from interest-only income, they achieve higher market-to-book valuations and improved solvency, but only up to a point, beyond which these performance indicators are negatively associated with higher levels of diversification. It appears that a continued diversification of assets bases away from traditional loan assets does not of itself imply an improved market performance. We explore these issues in the context of four South Asian countries (Bangladesh, India, Pakistan, and Sri Lanka).
AB - Our concern in the present paper is with the financial viability of banks in the recently liberalised economies of the South Asian region as they have diversified their revenue and assets bases. To this end, we examine how stock markets have responded to bank diversification in this region over the period start-1999 to end-2012. We find that when banks diversify from interest-only income, they achieve higher market-to-book valuations and improved solvency, but only up to a point, beyond which these performance indicators are negatively associated with higher levels of diversification. It appears that a continued diversification of assets bases away from traditional loan assets does not of itself imply an improved market performance. We explore these issues in the context of four South Asian countries (Bangladesh, India, Pakistan, and Sri Lanka).
U2 - 10.1016/j.asieco.2015.09.003
DO - 10.1016/j.asieco.2015.09.003
M3 - Article
VL - 41
SP - 69
EP - 85
JO - Journal of Asian Economics
JF - Journal of Asian Economics
SN - 1049-0078
ER -