Open AccessPerformance of China-Owned Banks in Hong Kong
Author(s) -
Xiaoxi Zhang,
Kevin Daly
Publication year - 2012
Publication title -
s and p : sound and pictures
Language(s) - English
Resource type - Journals
ISSN - 1675-722X
DOI - 10.32890/ijbf2012.9.3.8459
Subject(s) - net interest margin , profitability index , mainland china , return on assets , china , business , equity (law) , net interest income , license , return on equity , financial system , interest rate , monetary economics , economics , finance , political science , law
This paper reports results on the performance of mainland China-owned banks operating in Hong Kong and compares them Hong Kong (SAR) owned banks and Foreign owned banks. In general, the test model performs well under diagnostic tests on variables such as net interest margin, non-interest expense, impaired loans ratio, equity multiplier and ownership structures. Profitability, as measured by return on assets and return on equity for Chinese owned banks increased over the period 2004-2011. Chinese owned banks recorded increased performance in terms of net interest margin and equity multiplier but decreased with respect to non-interest expense and impaired loans ratio. Banks having a license also appears to be a major contributor to banks profitability across HKSAR. Compared to Hong Kong based foreign banks and local Hong Kong banks, we found that in general the mainland China banks tend to perform poorly across a number of key banking performance indicators.