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[...]this study aims to empirically study the changing bank income structure with particular emphasis on interest income, Nil, and its sub-components for the Indian SCBs during 2001 -2021 and the extent of income diversification to check whether it differs across different ownership groups in India. [...]the study explores the correlations between interest income and various sources of NIL By doing so, it seeks to assist Indian banks in optimizing their income mix to enhance financial performance and stability. [...]we investigate whether ownership groups of SCBs significantly influence the levels of income diversification in the Indian banking sector. [...]the study identifies the bank groups that are the most and least diversified in terms of revenue sources and offers recommendations for enhancing diversity.

This paper investigates risk shifting in commercial banks in the emerging market of Vietnam, where banks fund domestic asset portfolios almost exclusively from deposits and with limited issuance of securities. We investigate the relationship between these banks' income diversification strategies and their overall level of risk during the recent period of deregulation and global financial crisis. Our results show that those commercial banks that have shifted to non-interest income activities in fact face higher levels of risk. This finding is at odds with theories that argue that diversification is a strategy for risk reduction and has broader implications for domestic system stability. The analysis provides a framework for evaluating these issues in other emerging markets. Risk Management (2016) 18, 217–235. doi:10.1057/s41283-016-0008-2; published online 1 December 2016

Traditional commercial banks are impacted by financial disintermediation amid the advent of online banking. Lower revenue has forced banks to focus on new non-interest revenue to increase bank revenue. With banks' serious efforts toward digital transformation, this study is interested in examining whether digital transformation can affect non-interest income in China. Nonetheless, as the net profit of Chinese banks has dropped by 4.95 percent, rapid digital transformation does not promote non-interest income effectively. This study foresees the crucial role of financial inclusion in moderating the case and sets this as the ultimate aim of this study. This article uses the GMM to conduct an empirical study on the data of 116 banks from 2014 to 2021. As expected, the results show a non-favorable effect of digital transformation on non-interest income, but financial inclusion successfully brings a positive note. Hence, to grow together with customers, while initially, banks may have to lower the interest charges, efforts to enhance everyone's pursuit for a better financial life may help banks to enjoy more profit via higher non-interest income.

This study is aimed to examine the impact of income diversification on bank risk in Vietnam before and during the COVID-19 pandemic by studying commercial banks over the period 2012-2020. By employing the fixed effects model (FEM) and general least squares model (FGLS), our main result shows that the higher the level of income diversification, the lower the risk of default. However, the diversification strategy should be conducted based on each source of non-interest income, in particular banks need to limit the increase in direct income from service activities, and reduce service fees to increase other indirect revenues, such as benefiting from transaction size and CASA value. This is different from previous studies. Besides, banks should improve the quality of foreign exchange business, securities investment and increase income from other non-interest activities. We also find that bank's default risk tends to decrease when the COVID-19 pandemic breaks out. However, contrary to our hypothesis, the impact of the COVID-19 pandemic on the relationship between income diversification and default risk of commercial banks in Vietnam has not been confirmed.

We show that maturity transformation does not expose banks to interest rate risk—it hedges it. The reason is the deposit franchise, which allows banks to pay deposit rates that are low and insensitive to market interest rates. Hedging the deposit franchise requires banks to earn income that is also insensitive, that is, to lend long term at fixed rates. As predicted by this theory, we show that banks closely match the interest rate sensitivities of their interest income and expense, and that this insulates their equity from interest rate shocks. Our results explain why banks supply long-term credit.

In the future, when the process of economic integration in the banking sector is more powerful, and competitive, diversifying revenue is an inevitable and objective trend to help the banks increase profits, minimize risks and improve their competitive position in the system. The research is on the relationship between revenue diversification, risk and bank performance using data from audited financial statements and annual reports of 26 commercial banks listed and unlisted in Vietnam during the period 2010–2018. The research method uses Generalized Method of Moment (GMM) modeling techniques to solve endogenous problems, variance and autocorrelation in the research model. Research results show that diversification negatively impacts profitability and the higher the diversification, the higher the risk of commercial banks. However, the more diversified listed banks, the more increased the bank’s stability. The banks show the weakness and lack of experience of the banking system in developing a reasonable profit transformation model. The revenue diversification of banks is currently passive and moves slowly. Interest income is still the motivation of bank development, boosting profit growth. Growth, as well as the contribution from service activities, is not commensurate with potentials; although there are many positive points, they are not enough to cover risks from net interest income activities.

Purpose: Financial banking intermediaries are sensitive to changes in market interest rates. The volatility of market interest rates affects the level of bank net interest income and determines the bank interest rate policy. Banks are actively managing structural interest rate risks to mitigate the negative effects of changes in market interest rates. The post-crisis period is characterised by unconventional monetary policy, and one of the basic objectives of the monetary instrument is a negative interest rate policy. This paper researches the effects on the bank net interest income structure with an impact on bank performance indicators. The basic research hypothesis is that during the financial crisis and a negative interest rate policy, the movement of bank interest income does not converge compared to a bank interest expense.Methodology: According to the characteristics of the dataset, which includes 32 listed banks from Great Britain, Switzerland and the European Union for the period 2002-2019, panel data analysis is applied. To analyse the effect of the interest rate level on total interest income and total interest expense, we formed two models. Fixed-effects models were used for parameter estimation. Results: A bank interest expense is more sensitive to unconventional macroeconomic policy than bank interest income. Conclusion: The traditional interest earning customer related business can enable banks to stabilise the bank performance indicator during market disruption.

This article attempts to analyse the impact of bank size, both absolute and systemic, on performance in terms of returns and risk and business model in terms of activity mix. The sample includes 550 firm year observations of commercial banks in India between 2006 and 2016, spanning a time period of 11 years. On the performance front, the results indicate that neither of the size measures affects the return on assets or ROE of either public or private sector banks. On the other hand, the absolute size reduces the risk of bank insolvency. At the business model level, the proportion of fee-based and net-interest income decreases with increasing absolute size and increases with increasing systemic size. Conversely, the proportion of interest income increases with increasing absolute size and decreases with increasing systemic size. This highlights the banks’ increasing reliance on non-traditional sources of income with increasing systemic size in the Indian context.

Este estudio busca analizar de qué forma los ingresos diferentes a intereses impactan el riesgo bancario en el caso de la economía colombiana. Para esto, se construye un panel de datos para el periodo 2016-2022 con 29 establecimientos de crédito. Los resultados muestran que el aumento de los ingresos no tradicionales globales no incrementa ni las probabilidades de quiebra ni el riesgo de crédito. No obstante, cuando se analizan los ingresos por su tipo, se encuentra que el aumento de los ingresos por operaciones con divisas y comisiones sí pueden impulsar el riesgo bancario. Por lo tanto, la sugerencia es mejorar la regulación sobre los ingresos no tradicionales debido a su rápido crecimiento y las posibilidades de generar inestabilidad macrofinanciera.

[...]to make the investment Sharī'ah compliant, the investor needs to purge his share of the interest income that has accrued to the company to the extent of his investment in the shares of the company.According to this method, the purging amount is calculated by dividing the total prohibited income by the total number of outstanding shares of the company and then multiplying the resulting figure by the number of shares owned by the investor.[...]Purging Amount = (2,000/300)·(0) = (6.67)·(0) = USD 0 million It means that, since the investor does not own the shares at the end of the year, there will be no purging liability at all on the investor who had held the shares when the interest was received by the company. c.Purging Calculation under the Modified AAOIFI Purging Method Under the modified AAOIFI purging method, the investor needs to purge the interest income for the period during which the shares were held by him.Despite that, using the dividendbased method, the investor is required to purge only an amount of USD 0.48 million, i.e., less than 1% of the interest received by the company on his account.[...]this is restricted to the case where the company distributes a dividend. b. If the company does not declare a dividend, or if it declares a dividend but the investor had already sold his shares earlier, the investor is not required to purge any amount though the interest was earned while he held the shares. c. Under the AAOIFI method, the investor is required to purge the entire interest amount of USD 66.7 million received by the company on behalf of the shares of the investor, irrespective of whether or not the company declares a dividend. d. However, this liability becomes his responsibility only if he continued to hold the shares until the end of the accounting period.