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This study examines the effects of foreign branch activity on commercial banks in the Central, Eastern, and Southeastern European countries for the period 1995–2015. The author shows that more foreign bank branches are present in countries that have higher taxes and regulatory restrictions on bank activity. The increased activity of foreign bank branches adversely affects lending by foreign banks, and to a lesser extent, that of state-owned banks. The author attributes this finding to the fact that foreign bank branches and foreign banks compete for the same type of clients, namely, multinational corporations.

This chapter analyzes the relations among bank mergers, changes in boards and their networks, and changes in the global footprint of merging banks. We examine all mergers involving U.S. banks with foreign branches between 1986 and 2004. We find that while the largest banks have become even larger through mergers, their boards have stayed roughly the same size with the same pattern of connections, leaving banks relatively less central in the intercorporate network. And while global banks previously had more globally oriented boards, this is no longer the case, as the link between board networks and strategy has become more tenuous. Because global banks were particularly prone to merging, the average commercial bank in the U.S. is now far more domestically oriented than firms in most other industries. American banks have thus become more domestic at the same time that the rest of American industry has grown much more global.

In this chapter we study the intra-group transactions between the parent bank and its foreign subsidiaries in European Union (EU) countries during the crisis. We use hand-collected data from annual statements on related party transaction and find that they may create a serious problem for the stability of the foreign banks’ subsidiaries. Moreover, as some of those subsidiary banks were large by assets in some of the member states the related party transactions with the parent bank created a serious threat to the host countries’ financial system stability. We attribute this transaction to the weak governance in foreign subsidiaries. We suggest improvements in governance as well as greater disclosure of related party transactions in bank holding companies in Europe.

Branching is not the only way for foreign banks to enter a national market, and it is impractical when there are informational and cultural barriers and asymmetries among countries. The purpose of this paper is to analyze the determinants of cross-border branching in the Latin American banking sector, a region with regulatory disparity and political and economic instability, offering elements to a grounded strategic decision.

This study uses data from six Latin American countries. To account for the preponderance of zero counts, classes of zero-inflated models are applied (Poisson, negative binomial, and mixed). Model fit indicators obtained from differences between observed and estimated counts are used for comparisons, considering branches in each region established by banks from every other foreign region of the sample.

Branching by foreign banks is positively correlated with the population, GDP per capita, household disposable income, and economic freedom score of the host country. The opposite holds for the unemployment rate and entry regulations of the host country.

Few paper address cross-border banking in emerging economies. This paper analyzes cross-border branching in Latin America in the context of the current financial integration and bank strategy. Econometrically, its pioneering design allows modeling of inflation of zeros, over-dispersion, and the multilevel data structure. This design allowed testing of a novel country-level variable: the host country’s economic freedom score.

This paper aims to examine the relevance of cross-border activity in the European banking sector, evaluating the role of differences in regulation to explain the level of interest in entering foreign markets.

The sample considers all banks in the European Union (EU 28) existing at year-end 2017, and information about the ultimate owners’ nationality to classify local and foreign banks is collected. The analysis provides a mapping of regulatory restrictions for foreign banks and evaluates how they impact the role of foreign players in the deposit and lending markets.

Results show that the lower are the capital adequacy requirements, the higher are the amounts of loans and deposits offered by non-European Economic Area banks and, additionally, the higher the probability of having a foreign bank operating in the country.

This paper provides new evidence on regulatory arbitrage opportunities in the EU and outlines differences among EU countries not previously studied.

Since 1970 there has been a phenomenal growth in the establishment of foreign commercial banks in the United States thus altering the competitive dimension of US banking markets. An analysis of the state of foreign banking presence in the United States is here provided using recent disaggregated bank‐level information. Foreign commercial banks' country of origin, timing of entry, forms of involvement, main areas of specialisation, and related offices in the United States are investigated.

Expanding access to financial services for the 70 percent of Ghanaians who are unbanked is critical. Bank branches have been the primary channel for financial service delivery, but this may be changing because of technological innovations. Analysts believe branch-based banking still has a role in promoting financial inclusion. The purpose of this paper is to examine the pattern of bank branch presence across rural and urban Ghana; the disparities in the spatial distribution of domestic, foreign, and rural and community bank branches; and the district level characteristics associated with the pattern of spatial distribution of bank branches.

The study uses spatial analyst tools, geographically weighted Poisson regression, and data from Ghana’s banking sector to show the inequality in availability of branch-based services and to highlight the district and regional level differences in the determinants of branch allocation.

The study finds evidence of inequality in access to financial services. Physical bank branches are disproportionately more accessible in the urban south compared to the rural north. The study also finds that population size, percentage of urban residents, workforce size, and literacy level are associated with bank allocation but the results vary by district.

Branch banking needs modernization to continue to bring financial services in closer proximity. Development of physical and electronic infrastructure could attract financial institutions to serve deprived areas with significant concentration of unbanked populations.

Findings of the study point to the need for banks to re-envision branch banking technology to make branch banking more interactive. Banks need to find ways to fuse transferable elements of mobile phone banking into branch-based banking, not just to attract younger technology-savvy customers but also to help make operations more attractive, efficient, and cost effective.

This chapter investigates a shock transmission path between a home country (a country where globalized banks’ headquarters are located) and a host country (Indonesia as the emerging market) through the lending channel of global banks’ local branches (i.e., the internal transfer channel). Using novel data of monthly individual foreign bank’s balance sheet in Indonesia, the author finds the evidence that shocks to a parent bank and a home economy are transmitted to a host economy through the foreign banks’ internal capital market. With the Indonesia banks’ capital injections and their difficulty in financing dollar funds without risk premiums since the 1998s crisis, the foreign banks’ dollar lending in Indonesia is a good showcase of internal capital markets. A change in a home stock market index and industrial production appears to have a negative effect on growth rates in foreign currency loans of foreign banks in the host market. On the other hand, high growth rates in the parent bank’s stock price in the home market lead to an increase in foreign banks’ US dollar lending in the host country. This effect does not appear in local currency lending because limited hedging instruments against foreign exchange risk results in immobility of bank capital in the local currency.

An analysis of domestic and foreign banks’ internal performance by investigating their financial ratios shows that banks in Bahrain, Oman, the United Arab Emirates (GCC countries) have improved their performance over the past several years. Commercial banks in these GCC economies are well capitalised and have adopted modern banking services. Most banks are found to be financially sound by international standards, measured by all key financial ratios. Their operations can be characterised by satisfactory asset quality, more than minimum BIS capital/asset ratio, and high level of profitability. External performance is measured by evaluating banks’ market shares, regulatory compliance and public confidence; and most of the banks show better progress. Harmonization of the banks’ supervisory and accounting systems towards IAS has contributed to the safety and competitiveness of the banking sector.

This study aims to explore the challenges faced by foreign banks in the Kingdom of Saudi Arabia (KSA). It is important to explore the challenges as extant literature provides limited guidelines about this issue.

A mixed-method approach was used by canvassing 71 questionnaires and 36 semi-structured interviews. The sample included senior managers of foreign bank branches working in the Saudi market by the end of 2019. The quantitative data were analyzed using the distribution fitting algorithmic approach, and it is supported by the qualitative data analyzed using the thematic analysis method.

Results indicate that foreign banks encounter various challenges including government policies and regulations, the Saudi legal system, high “Saudization” ratio of the workforce, technological advances, high competition and overall economic change (oil price change). It seems that these challenges represent the KSA’s specific business environment.

This study will advance the extant literature on foreign bank entry with evidence from a unique context. This study could also help regulators, policymakers and bankers to better understand foreign banks’ entry into emerging and developing markets.