Determinants of Bank Performance in Thailand: Foreign vs. Domestic Banks

  • Sasin Kirakul
Keywords: Determinants of bank performance, domestic banks, foreign banks

Abstract

The purpose of this study is to identify the determinants of foreign banks’ performance in Thailand compared to those of domestic counterparts using bank-specific, macroeconomic, and multinational factors. The findings indicate a statistically negatively significant impact of asset size and GDP growth, a positive effect of capital adequacy ratio, and a mixed influence of liquidity risk on the performance of domestic banks. For foreign banks, significant and positive determinants of bank performance are liquidity risk, cost-to-income ratio, and capital adequacy ratio, whereas the trade relationship between the home country and Thailand is negatively significant for foreign banks’ profitability.

Downloads

Download data is not yet available.

References

Anawatchakul, H. (2011). Determinants of profitability of Thai commercial banks. Thammasat University.
Bank of Thailand. (2006). Thailand’s Financial Sector Master Plan Handbook.
Chantapong, S. (2003). Comparative Study of Domestic and Foreign Bank Performance in Thailand: The Regression Analysis. Journal of Economic Change and Restructuring, 38, 63-83.
Dinh, L. (2013). Foreign Banks in Vietnam: Determinants of Profitability and Comparison with Domestic Banks. Proceedings of World Business and Social Science Research Conference 24-25 October, 2013, Bangkok, Thailand, ISBN: 978-1-922069-33-7160
Frederick, N. K. (2015). Factors Affecting Performance of Commercial Banks in Uganda – A Case for Domestic Commercial Banks. International Review of Business Research Papers, 11(1), 95-113.
Heffernan, S., & Fu, M. (2008). The Determinants of Bank Performance in China. Applied Financial Economics, 20, 1585-1600. Retrieved from SSRN: http://ssrn.com/abstract=1247713
Ling, C.S., Ying, G. H., Ling, H. K., Kuan, L. P., & Yean, S. J. (2013). Economic Factors Affecting Performance of Foreign Banks in Malaysia. Universiti Tunku Abdul Rahman.
Molyneux, P., Thorton, J., (1992). Determinants of European Bank Profitability: A Note. Journal of Banking and Finance, 16, 1173-1178.
Muda, M., Shaharuddin, A., & Embaya, A. (2013). Comparative Analysis of Profitability Determinants of Domestic and Foreign Islamic Banks in Malaysia. International Journal of Economics and Financial Issues, 3(3). 559-569.
Perera, S., Skully, M., & Chaudhry, Z. (2013). Determinants of Commercial Bank Profitability: South Asian Evidence. Asian Journal of Finance and Accounting, 5(1). 365-380.
Sarita, B., Zandi, G. & Shahabi, A. (2012). Determinants of performance of Indonesian banking: A cross-sectional and dynamic panel data analysis. International Journal of Economics and Finance Studies, 4(2), 41-55.
Sufian, F., & Chong, R.R. (2008). Determinants of bank profitability in a developing economy: Empirical evidence from the Philippines. Journal of Accounting and Finance, 4(2), 91-112.
Syafri, M. (2012). Factors Affecting Bank Profitability in Indonesia. The 2012 International Conference on Business and Management. 236-242.
Uzhegova, O. (2015). The relative importance of industry- & country-specific factors for bank performance in developed and emerging economies. Review of European Studies, 7(7), 365-384.
Wong, J., Fong, T., Wong, E., and Choi, K. F. (2007). Determinants of the Performance of Banks in Hong Kong. Hong Kong Monetary Authority Quarterly Bulletin. 5-15.
Ximenes, J. & Li, L. (2013). Bank-Specific and Macroeconomic Factors Related to Bank Profitability and Stock Return in Thailand. University of the Thai Chamber of Commerce.
Zeitun, R. (2012). Determinants of Islamic and Conventional Banks Performance in GCC Countries using Panel Data Analysis. Global Economy and Finance Journal, 5(1), 53-72.
Published
2019-02-26
Section
Research articles