The Effect of Multiple Large Shareholders on Banks’ Profitability and Risk

The wide-ranging academic literature on corporate governance in the banking sector includes only a few studies on bank ownership and, specifically, on the comparative power of shareholders within the corporate structure. This paper reports an investigation into the presence of multiple large shareho...

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Bibliographic Details
Published in:Sustainability 2021-02, Vol.13 (4), p.1888
Main Authors: Soana, Maria Gaia, Barbieri, Laura, Lippi, Andrea, Rossi, Simone
Format: Article
Language:English
Subjects:
Banking industry
Banks
Boards of directors
Commercial banks
Corporate governance
Corporate structure
Economics
Executive compensation
Generalized method of moments
Hypotheses
Institutional investments
Investment policy
Literature reviews
Participation
Risk
Risk reduction
Shareholder meetings
Stockholders
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Summary:The wide-ranging academic literature on corporate governance in the banking sector includes only a few studies on bank ownership and, specifically, on the comparative power of shareholders within the corporate structure. This paper reports an investigation into the presence of multiple large shareholders and their influence on profitability and risk in the long-term, considering a sample of 697 U.S. and European listed commercial banks from 2008 to 2018. It was found that the number of large and institutional shareholders has a positive impact on profitability, but no effect on risk. However, long-term ownership by multiple large shareholders contributes to decreasing risk in banks.
ISSN:2071-1050
2071-1050
DOI:10.3390/su13041888