Profitability–Stability Nexus in Commercial Banks: Evidence from BRICS

IF 2.3 Q3 BUSINESS

Global Business Review Pub Date : 2023-10-16 DOI:10.1177/09721509231184765

Anjali Sain, Smita Kashiramka

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引用次数: 0

Abstract

The financial stability of the banking sector is a prerequisite for a thriving and stable economy. Against this backdrop, this article investigates the relationship between bank profitability and the financial stability of the banks by explicitly capturing the role of bank size, institutional quality and market concentration. A sample of 776 banks operating in Brazil, Russia, India, China and South Africa over the period 2005–2020 are examined using panel regression and System GMM. Our findings support this axiom, and we conclude that bank profitability plays a critical role in determining the stability of the financial system. Our results are consistent across alternate measures of stability (VaR and ∇CoVaR), albeit insignificant. Furthermore, the results support the existence of the concentration–stability hypothesis in the banking industry of BRICS nations. The findings also indicate that non-interest income and NPA have a negative impact on stability, whereas institutional quality plays a significant role in maintaining the stability of the banking industry in these emerging economies. This article tries to provide empirical research investigating the association of the financial stability of banks with profitability, non-interest income ratio, market concentration and institutional quality.

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商业银行的盈利能力-稳定性关系:来自金砖国家的证据

银行业的金融稳定是经济繁荣稳定的先决条件。在此背景下，本文通过明确捕获银行规模、机构质量和市场集中度的作用来研究银行盈利能力与银行金融稳定性之间的关系。利用面板回归和系统GMM对2005-2020年期间在巴西、俄罗斯、印度、中国和南非经营的776家银行进行了抽样研究。我们的研究结果支持这一公理，我们得出结论，银行盈利能力在决定金融体系的稳定性方面起着关键作用。我们的结果在其他稳定性度量(VaR和∇CoVaR)中是一致的，尽管不显著。此外，研究结果支持了金砖国家银行业集中度-稳定性假设的存在。研究结果还表明，非利息收入和不良资产回报率对银行业的稳定性有负面影响，而在这些新兴经济体中，制度质量在维持银行业稳定方面发挥着重要作用。本文试图对银行财务稳定性与盈利能力、非利息收入比率、市场集中度和制度质量之间的关系进行实证研究。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Global Business Review BUSINESS-

CiteScore

7.10

自引率

12.50%

发文量

107

期刊介绍： Global Business Review is designed to be a forum for the wider dissemination of current management and business practice and research drawn from around the globe but with an emphasis on Asian and Indian perspectives. An important feature is its cross-cultural and comparative approach. Multidisciplinary in nature and with a strong practical orientation, this refereed journal publishes surveys relating to and report significant developments in management practice drawn from business/commerce, the public and the private sector, and non-profit organisations. The journal also publishes articles which provide practical insights on doing business in India/Asia from local and global and macro and micro perspectives.