| dc.description.abstract | Recently, due to the rapid development of information technology, new financial products have been increasing introduced. It urged a new financial business which combined banking, stocks and bonds, insurance and investment. The liberalization, globalization, large-scale, and diversification of banking has been a trend. Since the financial industry in Taiwan opened up the establishment of new banks in 1991, the competition among the numerous financial institutes has become intensive. the non-performing loan ratio is increasingly getting high and the profits are getting low. Banks are faced with a great impact. In view of the situation, the government urged the merge of the banks and the establishment of financial holding companies to enhance the competitive strength of the banks.
This research applied Panel Data method with samples of 35 local banks in Taiwan to do the empirical investigation. To figure out the elements which affects the profitability performance of the banks, it utilized and analyzed each bank’s finance, service year material from 1993 to 2005.
The conclusions of this research are as follows. First, for the sample of all the banks, the capital adequacy ratio, the total assets turnover, non-interest income ratio and earning spread ratio are positively and significantly associated with the return on assets, while the non-performing loan ratio and the operating expenses ratio are negatively and significantly related to the return on assets. The sample of all banks and independent banks are mostly the same on real diagnosis result; the only difference is that the ratio of deposits to loans of the sample of independent banks is negatively and significantly related to the return on assets. However, for the sample of independent banks, the capital adequacy ratio does not have anything to do with return on assets. Secondly, for the sample of all the banks and independent banks, non-interest income ratio and earning spread ratio are positively and significantly related to the net income to operating revenue, while operating expenses ratio is negatively and significantly related to the net income to operating revenue. Besides, for the sample of independent banks, ratio of deposits to loans is positively and significantly associated with net income to operating revenue. Third, for the sample of financial holding company subsidiary banks, the scale of assets is positively and significantly related to return on assets and net income to operating revenue, while ratio liabilities to net equity and operating expenses ratio are negatively and significantly related to return on assets and net income to operating revenue.
This research can provide the financial officials of the government and the executives of the banks with the information to make a financial policy and supervise the financial institutes. It can also provide the information to the investors and the depositors while they are choosing and evaluating a bank. | en_US |