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Factors affecting net interest margin of ASEAN banks


Ahmad, Nor Hayati and Md Nayan, Najat and Ariff, Mohd (2004) Factors affecting net interest margin of ASEAN banks. In: Asia Pacific Economics and Business Conference 2004, 7-9th October 2004, City Bayview Hotel, Penang, Malaysia. (Unpublished)

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Abstract

As one of the key financial intermediaries, banks play a significant role as providers of credits and liquidity to the Asean economies. Banks are able to execute this economic role efficiently provided they are profitable. The issue is: What affects banks' net interest margins in this region? This paper investigates six factors affecting net interest margin (NIM) of conimercial banlts in Malaysia, Thailand, Japan, Korea, Australia and New Zealand over 1998 to 2002. Although the banks are operating in different economies: the investigation reveals that loan to deposit ratio significantly affects the banks' NIM in all six Asean countries. Operating expenses to total assets and leverage emerge as the next significant factors affecting NIM of banks in most of the Asean countries. The findings also show that adjusted R-squared for Australian, Thailand and New Zealand banks falls within 38-42 percent range while R-squared for Malaysia, Korea and Japan falls within 15-37 percent range. The implications of the results are discussed in the paper.

Item Type: Conference or Workshop Item (Paper)
Additional Information: Jointly Organized by Faculty of Economics and Management, Universiti Putra Malaysia and Malaysian Agricultural Economics Association (PETA)
Uncontrolled Keywords: Banks, net interest margins, banks performance, profitability, leverage and ASEAN
Subjects: H Social Sciences > HG Finance
Divisions: College of Business
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 17 Nov 2011 06:26
Last Modified: 17 Nov 2011 06:26
URI: http://repo.uum.edu.my/id/eprint/3562

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