Impact of Non-Interest Income on Bank Efficiency: Evidence from Sri Lanka

IF 0.6 Q4 ECONOMICS
J. Weerasuriya, R. Rathnayake, P. Fernando
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引用次数: 0

Abstract

Purpose: To explore the impact of non-traditional activities on both the cost and profit efficiency of banks as the measures of banks’ performance for the context of Sri Lanka. Design/Methodology/Approach: This study has considered systemically important banks in Sri Lanka as the sample and a panel data set for the period 2009 to 2019 obtained from annual reports of the banks. Estimation of bank efficiency was based on Stochastic Frontier Analysis (SFA). The efficiency of banks estimated using Cobb-Douglas and Translog Frontier forms. Findings: The efficiency scores indicate that profit efficiency of banks have decreased due to the involvement in non-traditional activities while the cost efficiency of banks have increased due to the involvement in non-traditional activities. The analysis shows that technology development has a significant impact on profit inefficiency under both cobb-douglas and translog models, while ATM development has only a significant impact on cost inefficiency under translog model when banks engage in both traditional and non-traditional banking activities. Yet, both profit and cost inefficiency of banks does not influence due to the ownership status of banks under the both models. Originality: This study contributes to the extant literature by highlighting the impact of inclusion of non-interest income as the secondary source of banks’ income to the banks’ performance in terms of profit and cost efficiencies as existing literature is silent regarding in this aspect.
非利息收入对银行效率的影响:来自斯里兰卡的证据
目的:以斯里兰卡为背景,探讨非传统活动对银行成本和利润效率的影响,作为衡量银行绩效的指标。设计/方法/方法:本研究将斯里兰卡具有系统重要性的银行作为样本,并从银行的年度报告中获得2009年至2019年的面板数据集。银行效率的估计基于随机前沿分析(SFA)。利用科布-道格拉斯表格和Translog Frontier表格估算银行效率。研究发现:效率得分表明,银行的利润效率因参与非传统活动而降低,而银行的成本效率则因参与非传统活动而提高。分析表明,在cobb-douglas模型和translog模型下,技术发展对利润无效率都有显著影响,而在translog模型下,当银行从事传统和非传统银行业务时,ATM发展仅对成本无效率有显著影响。然而,在两种模式下,由于银行的所有权地位,银行的利润和成本低效率都不受影响。独创性:本研究对现有文献的贡献在于突出了将非利息收入作为银行收入的第二来源对银行利润和成本效率绩效的影响,因为现有文献在这方面没有提及。
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
CiteScore
2.10
自引率
11.10%
发文量
10
期刊介绍: The purpose of the Journal is to publish (in English language) peer-reviewed articles, reviews and scholarly comments on issues relating to contemporary global macroeconomics and public finance by which is understood: The Journal is for all professionals concerned with contemporary Macroeconomics and Public Finance and is a forum for all views on related subjects. The Editorial Board welcomes articles of current interest on research and application on the areas mentioned above. The Journal will be international in the sense that it seeks research papers from authors with an international reputation and articles that are of interest to an international audience. In pursuit of the above, the journal shall: a. draw on and include high quality work from the international community of scholars including those in the major countries of Asia, Europe, Asia Pacific, the United States, other parts of the Americas and elsewhere with due representation for considerations of the readership. The Journal shall include work representing the major areas of interest in contemporary research on Macroeconomics and Public Finance and on a wide range of issues covering macro- economics, tax and fiscal issues, banking and finance, international trade, labour economics, computational and mathematical methods, etc. The Journal would particularly engage papers on pure and applied economic theory and econometric methods. b. avoid bias in favour of the interests of particular schools or directions of research or particular political or narrow disciplinary objectives to the exclusion of others. c. ensure that articles are written in a terminology and style which makes them intelligible, not merely within the context of a particular discipline or abstract mode, but across the domain of relevant disciplines.
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