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Bank Shareholder Returns and Risk: An International Perspective

John S. Jahera Jr. (Colonial Bank Distinguished Professor, Auburn University Department of Finance, Auburn University)
David A. Whidbee (Associate Professor, Department of Finance, Washington State University)

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 November 1997

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158

Abstract

The global banking environment is experiencing significant change as regulatory and geographical barriers to competition are reduced. As these barriers are removed, greater integration of banking services is developing throughout the world affecting the performance and structure of banking institutions. This research examines the stock returns and volatility of stock returns for a sample of banks in the United States, Europe, Canada and Japan. The general focus is to identify factors influencing the return and risk and to examine cross‐country differences in these factors. The results suggest that while size does not affect return volatility for any of the categories of banks, it does affect returns for banks in Japan, the U.S. and other non‐universal banking systems. Likewise, the investment in fixed assets appears consistently to adversely affect returns. A number of differences are found across country borders and across type of institutions (i.e. universal versus non‐universal banks).

Citation

Jahera, J.S. and Whidbee, D.A. (1997), "Bank Shareholder Returns and Risk: An International Perspective", Managerial Finance, Vol. 23 No. 11, pp. 79-96. https://doi.org/10.1108/eb018657

Publisher

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MCB UP Ltd

Copyright © 1997, MCB UP Limited