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This study investigates the relationship between noninterest income and profitability for a sample of banks in Europe and Middle East and North Africa (MENA) using unbalanced panel data for the period 2009-2020. The sample consists 1014 bank, of which 230 banks in MENA and 784 in Europe with a total number of observations equals to 3608. The fixed-effect model incorporates bank level and a set of external variables to control for the macroeconomic environment and the structures of the banking systems. The results reveal a significant positive link in MENA and no link in Europe. However, MENA banks are more concentrated, less integrated, less efficient and operate in a monopolistic competitive environment, which enables them to charge higher fees and commissions. Their profitability may be stemming from heavy investment in noninterest products. Policymakers may consider separating noninterest activities from interest activities, particularly those that are highly risky. Further, profitability may be due to higher fees and commissions; policymakers may consider addressing the issue of antitrust regulations to create a more competitive financial system. In Europe, noninterest income does not affect profitability, which could be due to the downturn of economic activity since 2008, the complex structure of the universal banking system.

The banking industry forms an integral part of the entire economy. For long, the basic function of banks was to lend and receive funds and earn the difference in the form of interest. But after liberalization, the entry of several private and foreign banks led to intense competition and deregulation of interest. As a consequence, the profitability of banking sector declined considerably. To overcome this growing instability in profits, the banks shifted their focus from fund-based to fee-based activities that involve the receipt of revenue by providing services. Though private banks and foreign banks have extensively increased their share in fee income, public banks still operate majorly on the traditional sources of income generation. The purpose of this research is to identify the problems faced by banks in expanding their fee-based services and study the effect of increasing share of fee income on the financial performance of the banks. Using the regression analysis and paired t-test, the impact of fee income on the overall profitability is tested. It is observed that fee income has a positive impact on the profitability and financial performance of the banks. Using the trend forecasting, it is validated that increasing the share of fee income in public banks leads to increase in profitability. Moreover, a model is developed that indicates the problems faced by banks in diversifying their fee-based services, the measures to be undertaken and the anticipated outcomes therein.

This paper investigates the effect of revenue diversification on bank performance and risk. Using a panel dataset of 226 listed banks across 11 emerging economies and a new methodological approach, System Generalized Method of Moments estimators (System GMM), the results in this paper provide empirical evidence of the impact of the observed shift towards non-interest income generating activities on insolvency risk and bank performance. The core finding is that diversification across and within both interest and non-interest income generating activities decrease insolvency risk and enhance profitability. The results also show that these benefits are largest for banks with moderate risk exposures. By extension, these results have significant strategic implications for bank managers, regulators and supervisors who share a common interest in boosting bank performance and stability.

PurposeThis study investigates and compares the earnings management strategies of financially distressed and non-distressed banks.Design/methodology/approachUsing a regression analysis, this study examines a sample of banks operating in the MENA region. We focus on real earnings management strategies via commission and fee income (CF) and accrual-based earnings management strategies via loan loss provisions (LLP). A subsample analysis was performed, lagged dependent variables and additional control variables were included as a robustness check.FindingsThe findings consistently reveal a more extensive use of real earnings management strategies via CF among distressed banks than among non-distressed ones. Specifically, banks smooth their income via CF under distress conditions. However, LLP-based earnings management strategies are only implemented in healthy banks. These behaviors persist in banks that operate under different monitoring systems and institutional settings.Research limitations/implicationsThis study marks its entry into the literature debate on accounting and non-accounting decisions that influence bank financial reporting. It argues that, in the presence of financial difficulties, bank managers define earnings management strategies based on the probability of being detected, rather than looking at their costs.Practical implicationsFrom a prudential perspective, the findings suggest the need for prudential rules to supervise the reporting of CF income associated with high fees or discount incentives used intentionally by bank managers to convince clients to delay or accelerate payments and, consequently, affect reported earnings.Originality/valueThis study adds to the literature by investigating the effect of bank financial distress on both real and accrual-based earnings management to provide a comprehensive analysis of bank earnings management strategies in the presence of financial difficulties.

This study examines the interaction of bank risk and non-interest income (trading and non-trading) controlling for the executive incentive compensation effect. We do not find executive stock option compensation (ESO) directly impacts bank risk. On the contrary, bank non-interest income, both trading and non-trading revenue components, positively and significantly affects bank risk. This result is robust to the difference-in-difference regressions, bank fixed effect, and the exclusion of too-big-to-fail banks. In a simultaneous equations setting, non-interest income activities affect bank risk of all types, while ESO does not. Moreover, idiosyncratic risk has a positive effect on bank non-interest income activities, but systematic risk has no effect. This result suggests that executives of banks with high idiosyncratic risk have more incentive to expand into the territory of non-interest income activities. Since high-risk banks pose more concern to investors and regulators, we further examine bank risk by means of quantile regressions which dissect the behavior of banks at the tail risk distribution. The findings point out that banks’ decision to diversify into non-traditional business lines is associated with risks in high-risk banks. The impact of non-interest income/trading revenues on bank risk increases in risk, and often the largest impact is spotted for banks with extreme risks. This implies that the leverage effect of non-interest income/trading activities is larger in high-risk banks.

本文利用縱橫資料迴歸模型探討國內35家銀行於新冠肺炎疫情前、後之股東權益報酬率影響因素，區分衍生性金融商品、資產配置與收入來源等三類指標變數。實證研究發現疫情前、後銀行操作交易目的衍生性金融商品之利率與匯率皆未顯著提升獲利能力；非交易目的之利率與匯率因用於規避風險而非預期會增加銀行獲利能力。疫情前資產配置，僅存放央行及拆借銀行同業顯著正向影響，代表同業資金周轉需求可獲取較高的利息收入；疫情後資產配置透支、貼現及放款受降息利差縮小而負向影響，亦可能因疫情期間違約風險升高，授信趨於保守所致。惟疫情前、後收入來源僅手續費收入皆顯著提升獲利能力，且亦發現疫情後各變數惟手續費收入正成長，表明手續費成為疫情後銀行重要之收入來源。

The purpose of this paper is to consider the impact on bank risk of portfolio diversification between traditional margin income and fee-based income for banks operating in Australia. Considering several performance variables, this analysis compares the benefits of diversification across different bank types relative to margin income and fee income. Further, regression analysis considers bank risk and revenue concentration. This paper documents that fee-based income is riskier than margin income but offers diversification benefits to bank shareholders. While improving bank risk-return tradeoff, these benefits are of second order importance compared to the large negative impact of poor asset quality on shareholder returns. These results have implications for all stakeholders in Australian banks. The results suggest that shareholders of banks will benefit from increased bank exposure to non-interest income via diversification. From a regulatory perspective, diversification reduces the possibility of systemic risk, but caution must be offered with respect to banks pursuing absolute returns rather than monitoring risk-return trade-offs, and so exploiting the benefits of the implied guarantee offered by \"too big to fail\" However, shareholders should also monitor bank exposure to non interest income to ensure that they do not become over-exposed to the point where the volatility effect outweighs the diversification benefits. The results of this study suggest that Australian regulators should consider requiring increased disclosure of the composition of bank non-interest income. Such disclosure would aid in understanding the changing nature of banking in Australia. Given the recent sub-prime crisis in the USA and the role played by fee based income sourced from securitization, increased disclosure of the nature of bank non interest income is now of global importance. This disclosure is particularly germane within the context of the implementation of Basle II, with its increased emphasis upon market discipline, given that Stiroh found increased disclosure in this area is accompanied by improved market pricing for risk.

ANZ Bank New Zealand Ltd. posted a year-over-year increase in profit for the quarter ended Dec. 31, 2017, on the back of a surge in net funds management and insurance income. The bank's profit after income tax for the fiscal first quarter rose to NZ$510 million from NZ$393 million in the year-ago period.

Access to dental care in France faces two main barriers: high out-of-pocket costs and a widely uneven distribution of dentists. Multiprofessional primary care groups (MPCGs) are currently in development to improve primary care efficiency and enhance the attractiveness of medically underserved areas. We aim to address the research question: What factors influence the income and activity of self-employed dentists, and how do multiprofessional primary care groups (MPCGs) and local socio-economic conditions shape these outcomes? We use data merging an administrative health insurance database and information from tax declarations of professionals in 2017, which we combined with contextual socio-economic information on the areas where dentists practice. There were 20,961 self-employed dentists, including 201 working in MPCGs, in 2017. We study various aspects of dentists’ practices, including net income, turnover, activity volumes, and case mix among professionals. We analyze their associated factors by conducting standard OLS regression methods. Male, middle-aged, and self-employed dentists with children provided more services and saw more patients than others. In line with market behaviour expectations, the dental bill increases with the local median income, while the volume of procedures decreases in parallel, echoing labour-leisure trade-offs. The activity and annual income of dentists decreased in areas with high densities of dental practitioners. Despite the limited number of dentists in MPCGs, our results advocate for a deeper investigation of the topic, as MPCG dentists provided more dental care than others in terms of volume, with a higher share of young patients and lower extra fees per service. Key points - Male, middle-aged, and self-employed dentists with children provided more services and saw more patients than others. - The activity and annual income of dentists decreased in areas with high densities of dental practitioners. - Dentists in multiprofessional group practice provided more dental care than those in other settings in terms of volume, with a higher share of young patients and lower extra fees per service.

We analyze the determinants of fee income activities and their impact on financial performance and the risk profile of German banks between 1995 and 2011. We find empirical evidence that for all German universal banks, risk-adjusted returns on equity and total assets are positively affected by an increase in fee business. We show that commercial banks induce much higher risk by expanding their fee-generating activities than do cooperative and savings banks. We also examine how banks' expansion into fee-based services affects their interest margin. We find that banks with a strong focus on fee business charge lower interest margins.