The determinants of bank net interest margins: A panel evidence from South Asian countries
By M. Islam, Shin’ichi Nishiyama. 2016
137 citations recorded by the source corpus.
Abstract This paper studies the determinants of net interest margins of banks (NIMs) in four South Asian countries (Bangladesh, India, Nepal and Pakistan) in the period 1997–2012 using panel data of 230 banks. The study is in line of Ho–Saunders (1981) dealership model and its later expansions but extended the model by adding new variable the relative size of the banks and also classifying the determinants of interest margins as bank specific, industry specific and macroeconomic specific variables. We found that liquidity and equity positions, required reserve and operating expenses to total asset ratios affect net interest margins positively while relative size of the banks, market power and economic growth affect inversely.
Subfields: Accounting, Finance
View Paper: https://www.semanticscholar.org/paper/dfbf42da7c9d2131449250b53fc64ced85864575
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Citations in the corpus
- The impact of bank capital, bank liquidity and credit risk on profitability in postcrisis period: A comparative study of US and Asia (2019, background): “Islam and Nishiyama (2016) document that liquidity, as measured by total loans to total deposit ratio, has a positive impact on profitability in case of net interest margin, but this relationship is insignificant.”
- The effect of credit risk, liquidity risk and bank capital on bank profitability: Evidence from an emerging market (2020, background): “Dietrich and Wanzenried (2011), Ongore and Kusa (2013), and Islam and Nishiyama (2016) also agreed that credit risk has a negative impact on bank profitability.”