Thumbnail Image
Item

Are international banks different? Evidence on bank performance and strategy

Bertay,Ata
; 
Demirguc-Kunt,Asli
; 
Huizinga,Harry
Abstract
This paper provides evidence on how bank performance and strategies vary with the degree of bank internationalization using data for 113 countries during 2000–15. Bank internationalization is associated with lower valuations and lower returns on equity. After the global financial crisis, international banks were revalued particularly if they had stable funding in the form of deposits and if they had more generous deposit insurance coverage. For international banks headquartered in developing countries, bank internationalization is related negatively with the cyclicality of their domestic credit growth with respect to home country GDP growth, smoothing local downturns. In contrast, if the international bank is from a high-income country investing in a developing country, its subsidiary bank lending is relatively procyclical, which can be destabilizing.
Description
Publisher Copyright: © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2022.
Date
2024-10
Journal Title
Journal ISSN
Volume Title
Publisher
Collections
Tilburg University Research Output Collection
Show all metadata
Files
Thumbnail Image
s10693-022-00390-3.pdf
Adobe PDF, 1.46 MB
Research Projects
Organizational Units
Journal Issue
Keywords
bank internationalization, financial crisis, deposit funding, procyclicality, F36 - Financial Aspects of Economic Integration, G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages, G28 - Government Policy and Regulation, SDG 1 - No Poverty, SDG 10 - Reduced Inequalities
Citation
Bertay, A, Demirguc-Kunt, A & Huizinga, H 2024, 'Are international banks different? Evidence on bank performance and strategy', Journal of Financial Services Research, vol. 66, no. 2, pp. 101-142. https://doi.org/10.1007/s10693-022-00390-3
URI
https://hdl.handle.net/20.500.14602/78556
Embedded videos