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Ownership concentration and bank profitability

Ozili, Peterson Kitakogelu and Uadiale, Olayinka (2017) 'Ownership concentration and bank profitability.' Future Business Journal, 3 (2). pp. 159-171. ISSN 2314-7210

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We investigate whether ownership concentration influences bank profitability in a developing country context. We focus on bank ownership concentration measured as the amount of direct equity held by a majority shareholder categorised into: high ownership concentration, moderate ownership concentration and disperse ownership. We find that banks with high ownership concentration have higher return on assets, higher net interest margin and higher recurring earning power while banks with dispersed ownership have lower return on assets but have higher return on equity. Also, higher cost efficiency improves the return on assets of widely-held banks and the return on equity of banks with moderate ownership. The findings have implications.

Item Type: Article
Uncontrolled Keywords: Corporate governance; Ownership structure; Agency theory; Profitability; Firm performance; Banks; Return on asset; Return on equity, Ownership Concentration; Bank Profitability, Bank Performance;
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD58.7 Organizational behavior, change and effectiveness. Corporate culture
H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
H Social Sciences > HF Commerce
H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
Divisions: Faculty of Social Sciences > Essex Business School
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 01 Aug 2017 14:34
Last Modified: 08 Jan 2022 00:33

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