TY - JOUR
T1 - The impact of bank ownership concentration on impaired loans and capital adequacy
AU - Shehzad, Choudhry Tanveer
AU - de Haan, Jakob
AU - Scholtens, Bert
PY - 2010/2
Y1 - 2010/2
N2 - This paper examines the impact of bank ownership concentration on two indicators of bank riskiness, namely banks' non-performing loans and capital adequacy. Using balance sheet information for around 500 commercial banks from more than 50 countries averaged over 2005-2007, we find that concentrated ownership (proxied by different levels of shareholding) significantly reduces a bank's non-performing loans ratio, conditional on supervisory control and shareholders protection rights. Furthermore, ownership concentration affects the capital adequacy ratio positively conditional on shareholder protection. At low levels of shareholder protection rights and supervisory control, ownership concentration reduces bank riskiness. (C) 2009 Elsevier B.V. All rights reserved.
AB - This paper examines the impact of bank ownership concentration on two indicators of bank riskiness, namely banks' non-performing loans and capital adequacy. Using balance sheet information for around 500 commercial banks from more than 50 countries averaged over 2005-2007, we find that concentrated ownership (proxied by different levels of shareholding) significantly reduces a bank's non-performing loans ratio, conditional on supervisory control and shareholders protection rights. Furthermore, ownership concentration affects the capital adequacy ratio positively conditional on shareholder protection. At low levels of shareholder protection rights and supervisory control, ownership concentration reduces bank riskiness. (C) 2009 Elsevier B.V. All rights reserved.
U2 - 10.1016/j.jbankfin.2009.08.007
DO - 10.1016/j.jbankfin.2009.08.007
M3 - Article
SN - 0378-4266
VL - 34
SP - 399
EP - 408
JO - Journal of Banking & Finance
JF - Journal of Banking & Finance
IS - 2
ER -