THE EFFECTS OF BANK'S ATTRIBUTES ON THE RELATIONSHIP BETWEEN RISK AND PERFORMANCE

Chia-Hao Lee ； Shuh-Chyi Doong ； Hua-Tung Chao

《Advances in Financial Planning and Forecasting》 7期 (2016/10) Pp. 191-207

https://doi.org/10.6292/AFPF.2016.07.09

摘要

This paper examines whether the relationship between bank's risk and financial performance changes with bank's attributes. The findings suggest that, in Taiwan's banking industry, bank's risk has negative effects on financial performance. Namely, the lower the bank's risk is, the better the bank's financial performance is. This phenomenon is more apparent in case of small-sized banks. By further categorizing Taiwan's banks into financial holding group's subsidiary banks and banks that are not subsidiaries of any financial holding group, it can be found that the risk of financial holding banks has negative effects on financial performance. However, the risk of those non-financial holding banks has positive effects, indicating that they rely on holding high-risk assets to improve their financial performance. To prevent those non-financial holding banks from improving their performance by neglecting their operating risk, the government must develop appropriate financial regulatory policies to avoid the crisis of financial institutions.

關鍵字

Bank Size ； Capital Adequacy Ratio ； Bank Performance ； Panel Threshold Model

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