Bank market power, ownership, regional presence and revenue diversification

evidence from Africa

Research output: Contribution to journalArticleResearchpeer-review

7 Citations (Scopus)

Abstract

We provide the first evidence that African banks with greater market power in lending and deposit markets earn more from non-traditional activities. This is consistent with dominant banks' ability to identify better non-traditional opportunities and utilize their greater bargaining capacity in contract creation. Non-African-owned banks are found to exploit non-traditional banking and earn higher non-interest income. In contrast, African banks in other African countries focus more on traditional financial intermediation. Our findings are important to other emerging markets because their banks are traditionally focused on financial intermediation and regulations and supervision in relation to non-traditional activities are relatively less developed.

Original languageEnglish
Pages (from-to)36-62
Number of pages27
JournalEmerging Markets Review
Volume27
DOIs
Publication statusPublished - 1 Jun 2016

Keywords

  • Africa
  • Bank market power
  • Bank ownership
  • Lerner index
  • Non-interest income

Cite this

@article{fa5f476b53f84742a01b2985e50475c7,
title = "Bank market power, ownership, regional presence and revenue diversification: evidence from Africa",
abstract = "We provide the first evidence that African banks with greater market power in lending and deposit markets earn more from non-traditional activities. This is consistent with dominant banks' ability to identify better non-traditional opportunities and utilize their greater bargaining capacity in contract creation. Non-African-owned banks are found to exploit non-traditional banking and earn higher non-interest income. In contrast, African banks in other African countries focus more on traditional financial intermediation. Our findings are important to other emerging markets because their banks are traditionally focused on financial intermediation and regulations and supervision in relation to non-traditional activities are relatively less developed.",
keywords = "Africa, Bank market power, Bank ownership, Lerner index, Non-interest income",
author = "My Nguyen and Shrimal Perera and Michael Skully",
year = "2016",
month = "6",
day = "1",
doi = "10.1016/j.ememar.2016.03.001",
language = "English",
volume = "27",
pages = "36--62",
journal = "Emerging Markets Review",
issn = "1566-0141",
publisher = "Elsevier",

}

Bank market power, ownership, regional presence and revenue diversification : evidence from Africa. / Nguyen, My; Perera, Shrimal; Skully, Michael.

In: Emerging Markets Review, Vol. 27, 01.06.2016, p. 36-62.

Research output: Contribution to journalArticleResearchpeer-review

TY - JOUR

T1 - Bank market power, ownership, regional presence and revenue diversification

T2 - evidence from Africa

AU - Nguyen, My

AU - Perera, Shrimal

AU - Skully, Michael

PY - 2016/6/1

Y1 - 2016/6/1

N2 - We provide the first evidence that African banks with greater market power in lending and deposit markets earn more from non-traditional activities. This is consistent with dominant banks' ability to identify better non-traditional opportunities and utilize their greater bargaining capacity in contract creation. Non-African-owned banks are found to exploit non-traditional banking and earn higher non-interest income. In contrast, African banks in other African countries focus more on traditional financial intermediation. Our findings are important to other emerging markets because their banks are traditionally focused on financial intermediation and regulations and supervision in relation to non-traditional activities are relatively less developed.

AB - We provide the first evidence that African banks with greater market power in lending and deposit markets earn more from non-traditional activities. This is consistent with dominant banks' ability to identify better non-traditional opportunities and utilize their greater bargaining capacity in contract creation. Non-African-owned banks are found to exploit non-traditional banking and earn higher non-interest income. In contrast, African banks in other African countries focus more on traditional financial intermediation. Our findings are important to other emerging markets because their banks are traditionally focused on financial intermediation and regulations and supervision in relation to non-traditional activities are relatively less developed.

KW - Africa

KW - Bank market power

KW - Bank ownership

KW - Lerner index

KW - Non-interest income

UR - http://www.scopus.com/inward/record.url?scp=84964336662&partnerID=8YFLogxK

U2 - 10.1016/j.ememar.2016.03.001

DO - 10.1016/j.ememar.2016.03.001

M3 - Article

VL - 27

SP - 36

EP - 62

JO - Emerging Markets Review

JF - Emerging Markets Review

SN - 1566-0141

ER -