Determinants of Banks’ Net Interest Margins in Honduras
This paper analyzes the determinants of banks’ net interest margins in Honduras during the years 1998 to 2013 – a period characterized by increasing banks’ net interest margins, foreign bank participation and consolidation. In line with findings in the previous literature, we find that operating cos...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
University of Warsaw
2017-01-01
|
| Series: | Journal of Banking and Financial Economics |
| Subjects: | |
| Online Access: | https://jbfe.wz.uw.edu.pl/resources/html/article/details?id=198308 |
| _version_ | 1797227094376185856 |
|---|---|
| author | Koffie Nassar Edder Martinez Anabel Pineda |
| author_facet | Koffie Nassar Edder Martinez Anabel Pineda |
| author_sort | Koffie Nassar |
| collection | DOAJ |
| description | This paper analyzes the determinants of banks’ net interest margins in Honduras during the years 1998 to 2013 – a period characterized by increasing banks’ net interest margins, foreign bank participation and consolidation. In line with findings in the previous literature, we find that operating costs are the most important drivers of banks’ net interest margins. We also find that competition among banks has led to higher concentration and that funding by parent banks positively impacts foreign banks’ net interest margins. Together, these results suggest that banks, particularly foreign banks, are under pressure to consolidate and reduce operating costs in order to offer competitive interest margins. We conclude that further structural reforms and consolidation may lower banks’ net interest margins. |
| first_indexed | 2024-04-24T14:35:20Z |
| format | Article |
| id | doaj.art-5c09e69ab30e43b08f935d8d0f34b775 |
| institution | Directory Open Access Journal |
| issn | 2353-6845 |
| language | English |
| last_indexed | 2024-04-24T14:35:20Z |
| publishDate | 2017-01-01 |
| publisher | University of Warsaw |
| record_format | Article |
| series | Journal of Banking and Financial Economics |
| spelling | doaj.art-5c09e69ab30e43b08f935d8d0f34b7752024-04-03T00:42:45ZengUniversity of WarsawJournal of Banking and Financial Economics2353-68452017-01-012017152710.7172/2353-6845.jbfe.2017.1.1Determinants of Banks’ Net Interest Margins in HondurasKoffie Nassar0 Edder Martinez1Anabel Pineda2International Monetary Fund Comisión Nacional de Bancos y Seguros Comisión Nacional de Bancos y Seguros This paper analyzes the determinants of banks’ net interest margins in Honduras during the years 1998 to 2013 – a period characterized by increasing banks’ net interest margins, foreign bank participation and consolidation. In line with findings in the previous literature, we find that operating costs are the most important drivers of banks’ net interest margins. We also find that competition among banks has led to higher concentration and that funding by parent banks positively impacts foreign banks’ net interest margins. Together, these results suggest that banks, particularly foreign banks, are under pressure to consolidate and reduce operating costs in order to offer competitive interest margins. We conclude that further structural reforms and consolidation may lower banks’ net interest margins.https://jbfe.wz.uw.edu.pl/resources/html/article/details?id=198308banks’ interest marginscommercial bankspanel corrected standard errors (pcse) |
| spellingShingle | Koffie Nassar Edder Martinez Anabel Pineda Determinants of Banks’ Net Interest Margins in Honduras Journal of Banking and Financial Economics banks’ interest margins commercial banks panel corrected standard errors (pcse) |
| title | Determinants of Banks’ Net Interest Margins in Honduras |
| title_full | Determinants of Banks’ Net Interest Margins in Honduras |
| title_fullStr | Determinants of Banks’ Net Interest Margins in Honduras |
| title_full_unstemmed | Determinants of Banks’ Net Interest Margins in Honduras |
| title_short | Determinants of Banks’ Net Interest Margins in Honduras |
| title_sort | determinants of banks net interest margins in honduras |
| topic | banks’ interest margins commercial banks panel corrected standard errors (pcse) |
| url | https://jbfe.wz.uw.edu.pl/resources/html/article/details?id=198308 |
| work_keys_str_mv | AT koffienassar determinantsofbanksnetinterestmarginsinhonduras AT eddermartinez determinantsofbanksnetinterestmarginsinhonduras AT anabelpineda determinantsofbanksnetinterestmarginsinhonduras |