Bank performance during the COVID-19 pandemic: does income diversification help?

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dc.citation.issue1
dc.citation.volume26
dc.contributor.authorHo TH
dc.contributor.authorNguyen DT
dc.contributor.authorLuu TB
dc.contributor.authorLe TDQ
dc.contributor.authorNgo TD
dc.date.accessioned2024-06-04T03:22:43Z
dc.date.available2024-06-04T03:22:43Z
dc.date.issued2023-06-11
dc.description.abstractThe Covid-19 pandemic’s economic effect led to tighter credit standards and a decline in the market for many types of loans. With a rich database of 1,231 banks in 90 countries from 2018Q1 to 2021Q4, we conducted a timely, broad-based international study to investigate whether non-interest activities, serving as a shock absorber, can promote bank performance before and during the Covid−19 pandemic. When using a dynamic panel data model with a system GMM estimator, our findings indicate that banks should be encouraged to diversify their income sources to reduce the adverse effects of the shock. With comparative analysis, we also found heterogeneous effects of income diversification on bank performance by its components, in pre-Covid−19 and during-Covid−19 periods, in both developed and developing countries. This study implies that bank managers should diversify income sources, especially fee-based services, trading activities, and foreign currency, to foster financial performance and stability during exogenous shocks.
dc.description.confidentialfalse
dc.identifier.citationHo TH, Nguyen DT, Luu TB, Le TDQ, Ngo TD. (2023). Bank performance during the COVID-19 pandemic: does income diversification help?. Journal of Applied Economics. 26. 1.
dc.identifier.doi10.1080/15140326.2023.2222964
dc.identifier.eissn1667-6726
dc.identifier.elements-typejournal-article
dc.identifier.issn1514-0326
dc.identifier.urihttps://mro.massey.ac.nz/handle/10179/69720
dc.languageEnglish
dc.publisherTaylor and Francis Group
dc.publisher.urihttps://www.tandfonline.com/doi/full/10.1080/15140326.2023.2222964
dc.relation.isPartOfJournal of Applied Economics
dc.rights(c) 2023 The Author/s
dc.rightsCC BY 4.0
dc.rights.urihttps://creativecommons.org/licenses/by/4.0/
dc.subjectDiversification
dc.subjectProfitability
dc.subjectRisk-taking
dc.subjectCovid-19
dc.titleBank performance during the COVID-19 pandemic: does income diversification help?
dc.typeJournal article
pubs.elements-id462466
pubs.organisational-groupOther
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