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Revisiting bank profitability, performance and stability in Asia Pacific (2012-2018) using the EAGLES framework

Revisiting bank profitability, performance and stability in Asia Pacific (2012-2018) using the... Determinants of bank performance, profitability and distress have been extensively assessed by modelling the microeconomic and macroeconomic factors. These factors while important are inadequate, otherwise the financial crises would not have been so devastating that led to bank closures and bankruptcies across the globe. For example the CAMEL bank rating model that forms the basis of central bank regulators has proven insufficient. This research applies the EAGLES framework that was built on the CAMELS bank rating model. The study focussed on 48 banks across Asia Pacific between 2012 to 2018. In particular the study shall highlight the strategic response quotient (SRQ) of the EAGLES framework. The SRQ is derived from the computation of the interaction of four financial data components, namely, interest income, fee-based income, interest cost and operational expenses. The paper found that the identified data components predicted and presented bank stability and profitability with a unique perspective. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Electronic Finance Inderscience Publishers

Revisiting bank profitability, performance and stability in Asia Pacific (2012-2018) using the EAGLES framework

International Journal of Electronic Finance , Volume 10 (1-2): 15 – Jan 1, 2020

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd
ISSN
1746-0069
eISSN
1746-0077
DOI
10.1504/IJEF.2020.110301
Publisher site
See Article on Publisher Site

Abstract

Determinants of bank performance, profitability and distress have been extensively assessed by modelling the microeconomic and macroeconomic factors. These factors while important are inadequate, otherwise the financial crises would not have been so devastating that led to bank closures and bankruptcies across the globe. For example the CAMEL bank rating model that forms the basis of central bank regulators has proven insufficient. This research applies the EAGLES framework that was built on the CAMELS bank rating model. The study focussed on 48 banks across Asia Pacific between 2012 to 2018. In particular the study shall highlight the strategic response quotient (SRQ) of the EAGLES framework. The SRQ is derived from the computation of the interaction of four financial data components, namely, interest income, fee-based income, interest cost and operational expenses. The paper found that the identified data components predicted and presented bank stability and profitability with a unique perspective.

Journal

International Journal of Electronic FinanceInderscience Publishers

Published: Jan 1, 2020

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