Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Income Diversification Strategy on Bank Stability: International Banks Evidence
Dublin Core
Title
Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Income Diversification Strategy on Bank Stability: International Banks Evidence
Income Diversification Strategy on Bank Stability: International Banks Evidence
Subject
income diversification, non-interest income, bank stability, bank zscore, GM
Description
This study aims to analyze the implementation of the income diversification strategy on bank stability carried out by international banks. This study uses panel data from 32 international banking companies from 2010-2019 with a total of 320 firm years of observation. The generalized method of moments is used as a statistical analysis tool for
panel data. The study results show that the mplementation of the income diversification
strategy carried out by international banks was convincingly able to increase bank stability. This indicates that international banks were able to perform cost diversification efficiency to achieve better stability. Furthermore, the use of high leverage could reduce bank stability. This study shows robust results in the measurement of income diversification using either the Herfindahl Hirschman Index (HHI) or the ratio of non-interest income to total income. This is a premier formal assessment of the nexus between income diversification strategies and risk management among the largest commercial banks in the world context. This research is expected to be useful for banking management, regulators, and investors in the banking sector.
panel data. The study results show that the mplementation of the income diversification
strategy carried out by international banks was convincingly able to increase bank stability. This indicates that international banks were able to perform cost diversification efficiency to achieve better stability. Furthermore, the use of high leverage could reduce bank stability. This study shows robust results in the measurement of income diversification using either the Herfindahl Hirschman Index (HHI) or the ratio of non-interest income to total income. This is a premier formal assessment of the nexus between income diversification strategies and risk management among the largest commercial banks in the world context. This research is expected to be useful for banking management, regulators, and investors in the banking sector.
Creator
Handy Octavianus, Khaira Amalia Fachrudin
Source
DOI: 10.26905/jkdp.v26i3.7764
Publisher
Universitas Merdeka Malang
Date
July 2022
Contributor
Sri Wahyuni
Rights
ISSN: 2443-2687 (Online) ISSN: 1410-8089 (Print)
Format
PDF
Language
English
Type
Text
Coverage
Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Files
Collection
Citation
Handy Octavianus, Khaira Amalia Fachrudin, “Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Income Diversification Strategy on Bank Stability: International Banks Evidence,” Repository Horizon University Indonesia, accessed February 5, 2025, https://repository.horizon.ac.id/items/show/4855.
Income Diversification Strategy on Bank Stability: International Banks Evidence,” Repository Horizon University Indonesia, accessed February 5, 2025, https://repository.horizon.ac.id/items/show/4855.