ASEAN bank integration framework an analysis on the determinants of profitability performance of ASEAN banks
Using two regression analysis, Arellano Bond estimator and Simultaneous Equation, this paper studies the bank specific and macroeconomic determinants of banks profitability, return on asset and net interest margin, of 45 banks across six countries (Indonesia, Malaysia, Philippines, Singapore, Thaila...
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| Format: | text |
| Language: | English |
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Animo Repository
2019
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| Subjects: | |
| Online Access: | https://animorepository.dlsu.edu.ph/etd_masteral/7152 |
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| Institution: | De La Salle University |
| Language: | English |
| Summary: | Using two regression analysis, Arellano Bond estimator and Simultaneous Equation, this paper studies the bank specific and macroeconomic determinants of banks profitability, return on asset and net interest margin, of 45 banks across six countries (Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam) of the ASEAN region for the period of 2012-2016. Results show that there is a high level of persistency for net interest margin due to tight competition within the region. Inflation is the only variable with positive and significant impact while nonperforming loans ratio, long term borrowing rate and reserve requirement ratio have negative and significant impact to return on asset. For net interest margins, only loan to deposit ratio has positive and significant impact while bank size, cost to income ratio and long term borrowing rate have negative and significant impact. Most of the factors that have significant impact on bank’s profitability are bank specific. Internal policies changes are more appropriate in order to improve profit performance. These policies should be executed properly and should be aligned with the current macroeconomic policies implemented. |
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