Universal banking : the effects of diversification on bank profits in a low interest world
This paper aims to determine the impact of diversification of banks’ activities on their profitability, under the universal banking model. A universal bank provides a one-stop-shop for all financial services to consumers. We examined a panel dataset consisting of 47 NYSE-listed US banks from 2009 to...
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| Main Authors: | , , |
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| Other Authors: | |
| Format: | Final Year Project |
| Language: | English |
| Published: |
Nanyang Technological University
2020
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10356/138904 |
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| Institution: | Nanyang Technological University |
| Language: | English |
| Summary: | This paper aims to determine the impact of diversification of banks’ activities on their profitability, under the universal banking model. A universal bank provides a one-stop-shop for all financial services to consumers. We examined a panel dataset consisting of 47 NYSE-listed US banks from 2009 to 2017. In this post-crisis period of low-interest-rate environment, we found that a more diversified bank would generally enjoy greater returns, after controlling for certain bank-specific factors. Furthermore, we also found that for our sample, banks that maintained approximately 18% of interest revenue from their operations could maximise their profit. |
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