ساختار مالکیت، ریسک و عملکرد در صنعت بانکداری اروپا
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|18276||2007||23 صفحه PDF||سفارش دهید||محاسبه نشده|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Banking & Finance, Volume 31, Issue 7, July 2007, Pages 2127–2149
We compare the performance and risk of a sample of 181 large banks from 15 European countries over the 1999–2004 period and evaluate the impact of alternative ownership models, together with the degree of ownership concentration, on their profitability, cost efficiency and risk. Three main results emerge. First, after controlling for bank characteristics, country and time effects, mutual banks and government-owned banks exhibit a lower profitability than privately owned banks, in spite of their lower costs. Second, public sector banks have poorer loan quality and higher insolvency risk than other types of banks while mutual banks have better loan quality and lower asset risk than both private and public sector banks. Finally, while ownership concentration does not significantly affect a bank’s profitability, a higher ownership concentration is associated with better loan quality, lower asset risk and lower insolvency risk. These differences, along with differences in asset composition and funding mix, indicate a different financial intermediation model for the different ownership forms.
A firm’s ownership structure can be defined along two main dimensions. First, the degree of ownership concentration: firms may differ because their ownership is more or less dispersed. Second, the nature of the owners: given the same degree of concentration, two firms may differ if the government holds a (majority) stake in one of them; similarly, a stock firm with dispersed ownership is different from a mutual firm. Within the European banking industry different ownership structures coexist: privately owned stock banks (POBs), mutual banks (MBs), and government-owned banks (GOBs).1 POBs, in turn, have different degrees of ownership concentration. Although their roots are different, large MBs, GOBs, and POBs (with different ownership concentration) have typically evolved to a similar full-service banking model, thereby competing in the same markets within the same regulatory framework. Indeed, these banks are virtually indistinguishable in terms of their range of activities. The relevance of firms’ ownership structure has been extensively explored in the theoretical literature. As far as ownership concentration is concerned, Bearle and Means (1932) point out that the separation of ownership and control may create a conflict of interests between owners and managers. Moreover, Jensen and Meckling (1976) posit that the agency costs of deviation from value maximization increase as managers’ equity stake decreases and ownership becomes more dispersed. The argument may weaken if the dispersed ownership went along with the public trading of the firm’s securities. As pointed out by Fama (1980), the signals provided by an efficient capital market about the value of a firm’s securities are likely to discipline the firm’s management. Regarding the nature of owners, the property rights hypothesis (e.g. Alchian, 1965) suggests that private firms should perform more efficiently and more profitably than both government-owned and mutual firms. In the case of government-owned firms, as Shleifer and Vishny (1997) point out, while they are technically “controlled by the public”, they are run by bureaucrats who can be thought of as having “extremely concentrated control rights, but no significant cash flow rights”. Additionally, political bureaucrats have goals that are often in conflict with social welfare improvements and are dictated by political interests. In mutual firms, ownership cannot be concentrated as in the case of stock companies ( Fama and Jensen, 1983a and Fama and Jensen, 1983b). This may cause inefficiency as the benefits of concentrated ownership are forgone. Moving to the empirical literature and restricting the analysis to the banking industry, we briefly review previous works on relative performances concerning (i) GOBs, (ii) MBs, and (iii) concentrated banks. As far as the relative performance of GOBs is concerned, Altunbas et al. (2001), focusing on the German banking industry, find little evidence to suggest that POBs are more efficient than GOBs, although the latter have slight cost and profit advantages over POBs. Sapienza (2004) focuses on banks lending relationships in Italy, comparing the interest rate charged to two sets of companies with identical credit scores which are borrowing either from GOBs or POBs, or both. She finds that GOBs tend to charge lower interest rates than POBs. By examining the profitability of a large sample of banks from both developing and developed countries, Micco et al. (2004) find that in industrial countries there is no significant difference between the Return on Assets of GOBs and that of similar POBs. Finally, Berger et al. (2005) find that GOBs in Argentina have lower long-term performance than that of POBs. As far as the relative performance of MBs is concerned, empirical studies provide quite a rich set of stylized facts which are useful for evaluating the reasonableness of any theory of mutuality. MBs have higher expenses (O’Hara, 1981, Mester, 1989, Gropper and Beard, 1995 and Esty, 1997), lower asset risk (O’Hara, 1981, Fraser and Zardkoohi, 1996 and Esty, 1997) and lower default risk (Rasmusen, 1988, Cordell et al., 1993, Hansmann, 1996 and Fraser and Zardkoohi, 1996). However, Altunbas et al. (2001) find that German MBs have slight cost and profit advantages over German POBs. Valnek (1999), focusing on the UK banking industry, finds that MBs (mutual building societies) have lower reserves for loan losses and make lower provisions for these reserves, have similar return on assets standard deviations over time, but exhibit a lower average return on assets (whether or not risk-adjusted) than POBs. Finally, as far as ownership concentration is concerned, Kwan (2004) compares – on a univariate basis – profitability, operating efficiency and risk taking between publicly traded and privately held US bank holding companies, finding that publicly traded banks tend to be less profitable than privately held similar bank holding companies, since they incur higher operating costs, while risk between the two groups is statistically indistinguishable. Moreover, several papers (Saunders et al., 1990, Gorton and Rosen, 1995, Houston and James, 1995 and Demsetz et al., 1997) find a significant effect of ownership concentration on risk taking, although no consensus exists on the sign of this relationship. In this paper, we study the effect of ownership structure on performance and risk in the European banking industry during the 1999–2004 period. We compare MBs, GOBs, and POBs profitability, cost efficiency and risk, controlling for ownership concentration. To the extent that MBs, GOBs, and POBs share the same range of activities, regulatory framework and institutional objectives, any structural difference in their performance could be regarded as a symptom of inefficiency of the industry and may prevent the market mechanism from working properly. For instance, an underperforming MB is not vulnerable to a take over by more efficient banks; likewise, a direct market discipline mechanism2 such as the one envisaged by the third pillar of Basel 2 cannot be effective in the case of underperforming or riskier GOBs benefiting from explicit or implicit government guarantees.3 Our empirical analysis extends the existing literature in three main directions. First, this is the first study that considers both dimensions of ownership structure (i.e. ownership concentration and nature of the owners). Second, we compare different ownership models using several measures, proxying for profitability, cost efficiency and risk. Third, rather than focusing on a single country, we use a unique dataset based on Western European countries. This paper proceeds as follows. Section 2 presents the methodology of the empirical analysis. Section 3 describes the data sources and summarizes sample characteristics. Section 4 presents the empirical results. Section 5 concludes.
نتیجه گیری انگلیسی
This paper investigates whether any significant difference exists in the performance and risk of European banks with different ownership structure. After controlling for size, output mix, asset quality, country and year effects, and specific macroeconomic growth differentials, we test for systematic differences in bank performances between mutual banks, public sector banks and private banks, and banks with different ownership concentration. Our results confirm that significant differences in performance and risk do exist, although their signs are not always consistent with expectations. More specifically, private banks appear to be more profitable than both mutual and public sector banks. However, this better profit performance stems from higher net returns on their earning assets rather than from a superior cost efficiency. In fact, and quite surprisingly, public and mutual banks’ COSTS are relatively lower. On the risk side, public sector banks have poorer loan quality and higher insolvency risk than other types of banks, while mutual banks have better loan quality and lower asset risk than both private and public sector banks. Summing up, our findings indicate that public sector banks are on average less profitable and riskier than other banks. Moreover, their banking activity seems to be very peculiar, with a larger share of their funding coming from the wholesale interbank and capital markets, a higher liquidity and lower investments in loans. This different kind of financial intermediation model appears consistent with the existence of conjectural or explicit government guarantees, which in turn allow these banks to avoid the indirect costs – in terms of capital markets effects – of their poorer asset quality and less profitable intermediation activity. Conversely, mutual banks appear much more similar to private banks. They enjoy more favorable customer relationships, which in turn explain both their higher loan quality and their lower operating costs. Their lower profitability is most likely the consequence of a lower average size and different kind of asset mix, as these banks are typically involved in more traditional financial intermediation activities than large private banks. However, as these types of financial institutions become increasingly involved in the same range of activities of any private sector bank and their activities are not confined to the ones related to the institutional objectives linked to the community they were originally set up to serve, their peculiar ownership structure based on the “one member one vote” rule which prevents them from being vulnerable to takeovers from more efficient banks becomes more and more questionable. These results have some relevant policy implications. If European banking regulators and policy makers in general really aim at leveling the playing field, safeguarding banks’ asset quality, improving the banking industry efficiency and strengthening market discipline, then they should eliminate any form of explicit guarantee protecting public banks, clearly inform capital market investors that no too-big-to-fail or other form of bailout policy will ever be applied in the future for these types of banks, and remove the obstacle to the contestability of mutual banks, which is mostly related to the “one head one vote” rule. Finally, our results concerning the ownership concentration are quite puzzling and deserve further research. While we find that the profitability of banks with more dispersed owners is not significantly different from the one of more concentrated banks, we also find that a higher ownership concentration is associated with better loan quality, lower asset risk and lower insolvency risk. To the extent that dispersed ownership banks are found to incur higher operating costs per euro of earning assets than concentrated ownership banks, this finding is consistent with the agency theory prediction: however, this same theoretical framework does not help to explain the lower loan quality and higher asset risk of banks with a less concentrated ownership structure.