Bank market power, ownership, regional presence and revenue diversification: evidence from Africa

My Nguyen, Shrimal Perera, Michael Skully

Research output: Contribution to journalArticleResearchpeer-review

13 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

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