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Do non-interest income activities matter for banking sector efficiency? A net interest margin perspective

Kolade Sunday Adesina & Maria Semenova

Applied Econometrics2024https://doi.org/10.22394/1993-7601-2024-73-59-77article
ABDC C
Weight
0.38

What the paper says

This paper explores the effects of non‐interest income (NII) generating activities on banking sector efficiency in 152 countries from 1996 to 2017. Contrary to previous studies that examine the effects of diversification on banking performance at the micro‐level, this study seeks to provide new insights about the effects of diversification at the aggregate level on bank efficiency. This aspect offers a chance to capture the whole banking sector and provides a broader understanding of the effects of banking sector diversification. Our baseline results reveal that engaging in NII activities is positively associated with banking sector efficiency. Using the dynamic threshold regression method, we do not find a tipping point beyond which the benefits of NII activities have an adverse impact on banking sector efficiency. These results are insensitive to different groups of countries. Our findings generally suggest that banking liberalization contributes to the efficiency of the banking sector. In this sense, the findings of this study support banking sector diversification policies implemented in many countries since the 1980s and 1990s.

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https://doi.org/https://doi.org/10.22394/1993-7601-2024-73-59-77

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@article{kolade2024,
  title        = {{Do non-interest income activities matter for banking sector efficiency? A net interest margin perspective}},
  author       = {Kolade Sunday Adesina & Maria Semenova},
  journal      = {Applied Econometrics},
  year         = {2024},
  doi          = {https://doi.org/https://doi.org/10.22394/1993-7601-2024-73-59-77},
}

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Do non-interest income activities matter for banking sector efficiency? A net interest margin perspective

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Evidence weight

0.38

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.19 × 0.4 = 0.07
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.