Thierno Amadou Barry

Ownership Structure and Bank Efficiency in the asia pacific region

This paper focuses on efficiency measures of banks from six countries in Southeast and East Asia. We use a two-stage approach to study the post-crisis period 1999-2004. We first estimate technical efficiencies using Data Envelopment Analysis and test for cross-country differences. Efficiency scores are relatively high for South Korea and relatively low for the Philippines. We then investigate the link between ownership structure and efficiency controlling for various factors such as size, risk and the economic environment. We find that efficiency scores are higher for banks which are held by minority private shareholders and banks that are foreign-owned.

Bank Ownership Structure, Market Discipline and Risk: Evidence from a Sample of Privately Owned and Publicly Held European Banks

The objective of this paper is to analyze the influence of ownership structure on the risk taking behavior of European commercial banks. We consider five categories of shareholders (managers/directors, institutional investors, non financial companies, individuals and families, and banks). Controlling for various factors, we find that asset risk is lower for banks where a higher proportion of total stocks is held by families and individuals who have less diversified portfolios. We also find that the probability of default of banks is higher when non financial companies or institutional investors hold a higher proportion of total equity. However, these results do not hold for listed banks in which non financial companies hold higher stakes suggesting that the market might be limiting the risk-taking incentives of such shareholders. We further show that market forces might be more effective in influencing risk in banks with a higher involvement of non financial companies than in banks with a higher portion of stock held by institutional investors.

Bank ownership structure, lending corruption and the regulatory environment

We empirically examine whether bank lending corruption is influenced by the ownership structure of banks, a country’s regulatory environment and its level of economic development. We find that corruption in lending is higher when state-owned banks or family-owned banks provide a higher proportion of credit to the economy, in both developed and developing countries. A stronger regulatory environment, either through a stronger supervisory regime or a higher quality of external audits, helps to curtail bank lending corruption if induced by family-controlled ownership, but not if induced by state-controlled ownership. We further find that controlled-ownership of banks by other banks contributes to reduce corruption in lending; the same applies to widely-held ownership of banks, but only for developed countries.

Falling under the control of a different type of owner : risk-taking implications for Banks

ABSTRACT European banks have experienced significant changes in the type of entity that owns them (another bank, an individual or a family, a non-financial company, an institutional investor, a government, a foreign entity, a domestic entity…). In this paper, we look at the influence of ownership type changes on risk and profitability. Working with a panel of commercial banks from 17 European countries, we find that although banks that experience a change in ownership type do not exhibit lower or higher risk or profitability than other banks, their risk and profitability is significantly affected after the change takes place. The type of the acquirer plays a significant role in explaining the observed changes. When the acquirer is a non-financial company, the state or an institutional investor, the level of risk increases after the change while the level of profitability remains unchanged. Conversely, when the acquirer is a bank, we find that the level of risk-adjusted profitability decreases. Banks acquired by a different type of owner during the global financial crisis do not perform better or worse than they did before.