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Article
Publication date: 20 July 2012

Musa Pinar, Tulay Girard and Zeliha Eser

The purpose of this paper is to examine bank brand equity from consumer perspectives by comparing the consumer‐based brand equity (CBBE) dimensions of local and global banks in…

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Abstract

Purpose

The purpose of this paper is to examine bank brand equity from consumer perspectives by comparing the consumer‐based brand equity (CBBE) dimensions of local and global banks in Turkey. The paper determines if and how CBBE differs across three types of banks (state, private, and foreign).

Design/methodology/approach

Measurements of brand equity dimensions were drawn from the literature, which included brand awareness, perceived quality, brand image, brand association, organizational association, and brand loyalty. Data were collected from adult customers of three types of banks.

Findings

It was found that the overall CBBE, perceived quality, brand image/association, and brand loyalty were significantly higher for private banks than for state and foreign banks. Organizational association was the highest for state banks, followed by private banks, and the lowest for foreign banks. Foreign banks scored the lowest in perceived quality, brand loyalty, and the overall CBBE.

Originality/value

The results help foreign banks understand branding challenges/threats they may face from local banks in new markets. Such challenges might pertain to low levels of organizational associations and service quality perceived for foreign banks, as found in this study. The findings close the gap in the area of the brand equity theory that has not been adequately developed for the banking/financial industry.

Details

International Journal of Bank Marketing, vol. 30 no. 5
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 13 November 2007

Oya Culpan, Toni Marzotto and Nazmi Demir

The purpose of this paper is to examine the employment policies and practices of Turkish banks and how these practices affect the hiring and promotion of women. Turkey's banking

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Abstract

Purpose

The purpose of this paper is to examine the employment policies and practices of Turkish banks and how these practices affect the hiring and promotion of women. Turkey's banking sector consists of state‐owned, private, and foreign banks. The overall restructuring of this sector along with the increase of foreign banks is an opportunity to enquire whether human resource (HR) policies of foreign banks have a differential effect on women's employment.

Design/methodology/approach

Data were collected in three phases. Phase 1: employment data for all three bank types were analyzed with particular reference to women's employment. About 12 of the largest banks were selected for in‐depth study representing each of the three bank categories. Phase 2: bank‐specific data were collected from the HR directors including: bank structure, personnel and recruitment policies, management levels, women in each level and professional employment application. Phase 3: structured personal interviews were conducted with the HR directors in the 12 selected banks.

Findings

The HR departments of foreign banks use different assessment and selection criteria compared with Turkish private and state‐owned banks. These criteria emphasize rank‐in‐person, which enhances the upward mobility of employees. Because of their flexibility, they may advantage female employment.

Research limitations/implications

Survey data from female employees by type of bank would demonstrate a close relationship between organizational structure and women's career advancement. However, this study only interviewed HR managers. The methodology does not indicate whether and to what extent women in three banking types perceive the effect of structure on their career advancement.

Practical implications

HR practices of the three categories evidences that foreign banks in Turkey add a variety of competencies of their prospective employees in their application forms. These additional dimensions may improve the recruitment and promotion of women into management positions. It is argued that employment applications that include individual or rank‐in‐person characteristics rather than job‐based criteria advantage women.

Originality/value

This is the only study that examines women's employment stratified by Turkey's three banking categories. The effect of culture and structure on employment practices and how this influences the mobility of women are explored.

Details

Women in Management Review, vol. 22 no. 8
Type: Research Article
ISSN: 0964-9425

Keywords

Article
Publication date: 12 June 2007

Ihsan Isik

This paper analyzes the responsiveness of different ownership forms to changing business environment by drawing on Turkish experience.

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Abstract

Purpose

This paper analyzes the responsiveness of different ownership forms to changing business environment by drawing on Turkish experience.

Design/methodology/approach

This study is conducted in two stages. In the first stage, the paper uses Malmquist index theory, to estimate the total factor productivity change, technological change, efficiency change, pure efficiency change and scale efficiency change indexes for the Turkish banks. In the second stage, utilizing the generalized least regression format, it examines the significance of the productivity differences between different ownership forms after controlling for size and changes in the macro‐economy.

Findings

Under the “traditional banking definition,” productivity growth during the period was 1.2 percent for state banks, 3.9 percent for private banks and 14.2 percent for foreign banks. Under the “non‐traditional banking definition,” the productivity gain over the period was 2.9 percent for state banks, 9.5 percent for private banks and 17.0 percent for foreign banks.

Research limitations/implications

The future research can extend the data set and may include more explanatory factors to characterize the bank forms that record the fastest productivity growth.

Practical implications

Private ownership appears to be more adaptive to new environment. Foreign banks can be used as a policy instrument to induce efficiency and productivity improvements in local banking industries. Liberalization of markets through competition boosts economic performance.

Originality/value

In analyzing impacts of reforms, the significance of inter‐temporal change should be tested to better guide regulators, investors and managers.

Details

Studies in Economics and Finance, vol. 24 no. 2
Type: Research Article
ISSN: 1086-7376

Keywords

Book part
Publication date: 28 September 2020

Yuki Masujima

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…

Abstract

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.

Details

Emerging Market Finance: New Challenges and Opportunities
Type: Book
ISBN: 978-1-83982-058-8

Keywords

Article
Publication date: 24 July 2020

Faizi Weqar, Ahmed Musa Khan and Syed Mohammed Imamul Haque

The purpose of this paper is to inspect the effect of intellectual capital (IC) on the financial performance (FP) of Indian banks.

Abstract

Purpose

The purpose of this paper is to inspect the effect of intellectual capital (IC) on the financial performance (FP) of Indian banks.

Design/methodology/approach

The study uses the data of 58 Indian banks, namely, 20 nationalised banks, 17 private Indian banks and 21 private foreign banks, for the period between 2009 and 2018. A modified value-added intellectual coefficient methodology was used for measuring the efficiency of the IC.

Findings

The efficiency of IC significantly enhances the profitability and productivity of the Indian banks. Overall, human capital is the most substantial component of IC in augmenting the profitability and productivity of the Indian banking industry. Structural capital and physical capital are vital only for improving profitability while the contribution of relational capital towards the banks’ FP is nominal. The result also shows that amongst the three categories of Indian banks, private foreign banks are most efficient in leveraging their IC.

Research limitations/implications

The study results are only restricted to Indian banks and the data of only 58 banks are used for drawing the inferences.

Originality/value

The paper fills the void in the existing literature of IC and corporate FP by using the data set of Indian banks divided into the public sector, private Indian and private foreign banks.

Details

Measuring Business Excellence, vol. 24 no. 4
Type: Research Article
ISSN: 1368-3047

Keywords

Article
Publication date: 1 October 2018

Nitin Arora, Nidhi Grover Arora and Kritika Kanwar

The issue of mounting non-performing assets (NPAs) in Indian banking industry is serious and attracting attention of academia and policy planners. Thus, the purpose of this paper…

Abstract

Purpose

The issue of mounting non-performing assets (NPAs) in Indian banking industry is serious and attracting attention of academia and policy planners. Thus, the purpose of this paper is to test the hypothesis whether NPAs in Indian commercial banking have reached at alarming state where they start affecting the technical efficiency levels adversely or not.

Design/methodology/approach

The efficiency score have been computed using case model (model with NPAs as bad/undesirable output) vs control model (model without NPAs as bad/undesirable output) methodology under meta-frontier data envelopment analysis framework.

Findings

It has been noticed that the effect of NPAs on overall technical efficiency and its various components is insignificant. The comparison of the case models (i.e. model with NPAs as bad output) with the control models (i.e. model without NPAs) reveals insignificant difference in average efficiency scores and rank distribution of commercial banks. The major source of inefficiency is technology gap (i.e. structure, setup and objectives of banking) among public, domestic private and foreign private categories of banks.

Practical implications

Though NPAs are increasing in Indian banking industry and specifically in Indian public sector banks because of their compulsory lending to priority sector yet the banks have huge scope to extend credit to priority sector as the NPAs have not reached at alarming stage where they start affecting adversely the efficiency performance.

Originality/value

Given the fact that the banking penetrations, structure and objectives differ significantly across ownership, separate frontiers for each ownership (public, private and foreign banks) category has been used to evaluate the technical efficiency levels of 81 commercial banks operating in India over the period 2005 to 2013.

Details

Benchmarking: An International Journal, vol. 25 no. 7
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 2 October 2017

Sreejata Banerjee and Divya Murali

This paper aims to examine whether the Indian banking system is robust to withstand unexpected shocks from external and domestic macroeconomic factors after financial…

Abstract

Purpose

This paper aims to examine whether the Indian banking system is robust to withstand unexpected shocks from external and domestic macroeconomic factors after financial liberalization in 1992. As proposed by Demirgüç-Kunt and Detragiache (1998) and Kaminsky and Reinhart (1999) banking crisis follows financial liberalization. India embarked financial deregulation from 1992, whereas the ongoing global financial crisis (GFC) could jeopardize bank portfolios.

Design/methodology/approach

Stress test is undertaken through the vector auto regressive (VAR) model to examine if decline in GDP, exchange rate volatility and foreign capital portfolio funds adversely impact bank asset quality through higher defaults. The VAR model is run for banks belonging to public, private or foreign ownership. Soundness of banks is measured by the non-performing assets (NPAs) with quarterly data from 1997 to 2014. Post-VAR estimation technique, Granger causality test (GC) and impulse response function (IRF) are used to check for robustness of the VAR model findings.

Findings

The authors found that there is little divergence among banks of different ownership in responding to the shocks from REER, foreign capital flows and GDP output gap. IRF shows that GDP shock to NPA of public and private banks takes more than nine and eight quarters to stabilize. Foreign banks are impacted by the same macroeconomic factors. The stress test exhibits that public banks are more vulnerable and need recapitalization. Moreover, domestic banks are not adversely affected by the GFC, and credit for this could be attributed to the Reserve Bank of India’s (RBI’s) regulatory policy.

Research limitations/implications

Surprisingly, capital market indices do not influence banks’ NPA, and this needs further investigation. The limitation arises from the fact that stock market index for banks was launched only in the early 2000. Missing data and limited number of banks shares traded in the market could explain the trivial results.

Practical implications

Findings of this study will be useful to RBI policymakers and bank managers. The exchange-rate risk faced by borrowers that lead to increased NPAs is an issue that the RBI would be interested to examine. The impact of foreign capital flows, adversely influencing the NPAs of banks, is a significant issue that the RBI is concerned with.

Social implications

Banking sector crisis has serious repercussions, causing loss of household savings and decline in confidence in the banking sector.

Originality/value

This topic was explored in India only by Bhattacharya and Roy in (2008). No other similar work has been done to the authors’ knowledge in stress test of banks in India across different ownership. The authors’ study period covers the GFC and shows that it has not caused devastation as it has in developed countries.

Details

Studies in Economics and Finance, vol. 34 no. 4
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 2 February 2010

Pooja Malhotra and Balwinder Singh

This exploratory study is an attempt to present the present status of Internet banking in India and the extent of Internet banking services offered by Internet banks. In addition…

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Abstract

Purpose

This exploratory study is an attempt to present the present status of Internet banking in India and the extent of Internet banking services offered by Internet banks. In addition, it seeks to examine the factors affecting the extent of Internet banking services.

Design/methodology/approach

The data for this study are based on a survey of bank websites explored during July 2008. The sample consists of 82 banks operating in India at 31 March 2007. Multiple regression technique is employed to explore the determinants of the extent of Internet banking services.

Findings

The results show that the private and foreign Internet banks have performed well in offering a wider range and more advanced services of Internet banking in comparison with public sector banks. Among the determinants affecting the extent of Internet banking services, size of the bank, experience of the bank in offering Internet banking, financing pattern and ownership of the bank are found to be significant.

Research limitations/implications

The primary limitation of the study is the scope and size of its sample as well as other variables (e.g. market, environmental, regulatory etc.) which may have an effect on the decision of the banks to offer a wide range of Internet banking services.

Originality/value

The purpose of the study is to help fill significant gaps in knowledge about the Internet banking landscape in India. The findings are expected to be of great use to the government, regulators, commercial banks, other financial institutions, e.g. co‐operative banks planning to offer Internet banking, bank customers and researchers. The bankers as well as society at large will come to know where the banks lag in terms of adoption of Internet banking and in providing different products and services. An understanding of the factors affecting the extent of Internet banking services is essential both for economists studying the determinants of growth and for the creators and producers of such technologies. Moreover, this paper contributes to the empirical literature on diffusion of financial innovations, particularly Internet banking, in a developing country, i.e. India.

Details

Internet Research, vol. 20 no. 1
Type: Research Article
ISSN: 1066-2243

Keywords

Article
Publication date: 12 November 2018

Aparna Bhatia and Megha Mahendru

This paper aims to endeavour to assess revenue efficiency (RE) scores of Scheduled Commercial Banks operating in India. Differences in RE are studied across varying ownership as…

Abstract

Purpose

This paper aims to endeavour to assess revenue efficiency (RE) scores of Scheduled Commercial Banks operating in India. Differences in RE are studied across varying ownership as well. The study also determines the nature of return to scale of Indian SCBs as whole as well as classified across ownership. Number of banks operating as leaders and laggards has also been calculated.

Design/methodology/approach

RE of banks is calculated by using the non-parametric approach, namely, data envelopment analysis (DEA). Further, the differences in the efficiency scores are examined by applying Panel Tobit Regression.

Findings

The results of DEA suggest that none of the banks has ever achieved full RE score of 1 in any of the years under study. An inconsistent pattern of RE is seen. Private sector banks have performed better than their counterparts in public and foreign sector. Maximum number of banks operating on decreasing return to scale are from public sector, and the highest number of banks operating on constant return to scale belong to Foreign Sector. More number of banks operates as laggards in the Indian financial system. Thus, there still exists room for improvement for banks in all sectors.

Originality/value

With specific reference to India, less empirical work has been carried out with respect to RE. As only two studies so far from the literature are available that consider RE exclusively, namely, Ram Mohan and Ray (2004) and Bhatia and Mahendru (2015). However, Ram Mohan and Ray (2004) considered only the reformatory phase, whereas Bhatia and Mahendru (2015) analyzed the performance for specific points of time only. None of the study has been able to give any concrete findings according to sector-wise performance of banks in terms of RE parameters.

Details

International Journal of Law and Management, vol. 60 no. 6
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 26 November 2021

Shakeb Akhtar, Mahfooz Alam and Mohd Shamim Ansari

This study aims to empirically evaluate the performance of commercial banks operating in India.

Abstract

Purpose

This study aims to empirically evaluate the performance of commercial banks operating in India.

Design/methodology/approach

The efficiency of the commercial banks is evaluated using the data envelopment analysis (DEA) approach. We measure the technical, pure technical and scale efficiency of the sampled conventional banks using the input-oriented model. We employed an extended DEA window analysis approach based on a panel sample of 47 banks in the Indian scenario. The period of study is from 2009 to 2018.

Findings

The results obtained from CRS and VRS measures envisage that Indian banks have failed to manage their inputs efficiently and convert them into outputs. It implies that Indian banks do not operate at an optimum level. Moreover, the results show that public banks exhibit superior efficiency scores followed by private and foreign banks. Apart from the aggregate sector level, we also investigate the performance of Indian banks at the individual level for in-depth analysis. The individual bank-level analysis reports that the public sector banks (PSBs) are the most efficient followed by foreign banks, whereas, the least efficient are the private banks.

Research limitations/implications

The findings of our study have implications for government, financial institutions and policymakers to access the verve and flexibility of the Indian banking system. The government should consider restructuring inefficient banks to enhance overall performance. This can be considered by improvement in managerial efficiency, efficient allocation of scarce resources and appropriate scale of operation. However, the findings of the study should be interpreted in light of the period of study for the banks being operational (as we filter out banks that ceased to exist) in India and empirical methods employed. The results may vary if alternative measures are used.

Originality/value

The present paper investigates the efficiency of the Indian banking sector employing the Data Envelopment Window Analysis (DEWA) technique. To the best of our knowledge, the present study is perhaps the first one to employ the DEWA measure on the Indian banking industry to gauge their performance over time.

Details

Benchmarking: An International Journal, vol. 29 no. 9
Type: Research Article
ISSN: 1463-5771

Keywords

1 – 10 of over 28000