ASEAN bank integration framework an analysis on the determinants of profitability performance of ASEAN banks

Date of Publication

4-6-2019

Document Type

Master's Thesis

Degree Name

Master of Science in Computational Finance

Subject Categories

Finance and Financial Management

College

Ramon V. Del Rosario College of Business

Department/Unit

Financial Management

Thesis Adviser

Rene B. Betita

Defense Panel Chair

Tomas S. Tiu

Defense Panel Member

Michael Gines Munsayac
Myra V. De Leon

Abstract/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.

Abstract Format

html

Language

English

Format

Electronic

Accession Number

CDTG008193

Keywords

Banks and banking--Southeast Asia; Bank profits--Southeast Asia

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2-17-2025

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