The determinants of bank net interest margins: A panel evidence from South Asian countries

Yearly average net interest margins (%) in South Asian countries. This paper studies the determinants of net interest margins of banks (NIMs) in four South Asian countries (Bangladesh, India, Nepal and Pakistan) in the period 1997–2012 using panel data of 230 banks. The study is in line of Ho–Saunde...

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Bibliographic Details
Published in:	Research in International Business and Finance Vol. 37; pp. 501 - 514
Main Authors:	Islam, Md. Shahidul, Nishiyama, Shin-Ichi
Format:	Journal Article
Language:	English
Published:	Elsevier B.V 01.05.2016 Elsevier BV
Subjects:	Net interest margins Non-performing loan Spread Net interest margins Non-performing loan Spread C23 G21
ISSN:	0275-5319, 1878-3384
Online Access:	Get full text
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Summary:	Yearly average net interest margins (%) in South Asian countries. This paper studies the determinants of net interest margins of banks (NIMs) in four South Asian countries (Bangladesh, India, Nepal and Pakistan) in the period 1997–2012 using panel data of 230 banks. The study is in line of Ho–Saunders (1981) dealership model and its later expansions but extended the model by adding new variable the relative size of the banks and also classifying the determinants of interest margins as bank specific, industry specific and macroeconomic specific variables. We found that liquidity and equity positions, required reserve and operating expenses to total asset ratios affect net interest margins positively while relative size of the banks, market power and economic growth affect inversely.
ISSN:	0275-5319 1878-3384
DOI:	10.1016/j.ribaf.2016.01.024