The impact of non-interest income on the performance of commercial banks in the ASEAN region

This study investigates how non-interest income affects the performance of commercial banks in the ASEAN region. Using data from 36 commercial banks in ASEAN countries from 2008 to 2020 and Bayesian analysis techniques, the results of this study indicate that non-interest income negatively affects c...

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Bibliographic Details
Published in:Journal of risk and financial management 2023-01, Vol.16 (1), p.1-16
Main Authors: Phan, Thi Thu Hang, Pham, An Ha Thi, Le, Hoang Anh, Lam, Thai Bao Ngoc
Format: Article
Language:English
Subjects:
ASEAN
Banking industry
Banks
Bayesian analysis
Commercial banks
Cost control
Diversification
Hypotheses
non-interest income
Profitability
threshold regression
Volatility
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Summary:This study investigates how non-interest income affects the performance of commercial banks in the ASEAN region. Using data from 36 commercial banks in ASEAN countries from 2008 to 2020 and Bayesian analysis techniques, the results of this study indicate that non-interest income negatively affects commercial banks' performance in the ASEAN region. In addition, the quantile regression results demonstrated that non-interest income negatively affects commercial banks' performance in the ASEAN region at all three percentiles (25th, 50th, and 75th). Additionally, we identified a non-interest income threshold of 59.3 percent of total income for commercial banks in the ASEAN region. In light of banking competition and the necessity for commercial banks to diversify their income streams, we offer a variety of policy implications to increase the performance of commercial banks.
ISSN:1911-8074
1911-8066
1911-8074
DOI:10.3390/jrfm16010018