Russian Banking: The Impact of Ownership on Efficiency and Performance

28 Pages Posted: 6 Feb 2012

See all articles by Ulla Bernhart

Ulla Bernhart

affiliation not provided to SSRN

Bernhard Mahlberg

Institute for Industrial Research (IWI); Vienna University of Economics and Business - Institute for Production Management

Peter R. Haiss

WU Vienna University of Economics and Business; UniCredit Bank Austria; IES Vienna - Institute for the International Education of Students

Date Written: August 1, 2010

Abstract

This paper analyses the development of the Russian banking sector over the period 2001-2007 to assess the impact of ownership on the operations of commercial banks. The stochastic frontier approach is employed for a sample of the 50 largest Russian banks to determine cost efficiency differences between foreign-owned, domestic private and state-owned banks. We find that cost efficiency of the Russian banking market decreased over the observed period if technical change is taken into account. The estimation results further suggest that foreign banks are more efficient than state-owned banks, and state-owned banks achieve higher efficiency levels than private domestic banks. These results are consistent with the development of the market share of private domestic banks after the crisis. Finally the lower efficiency of the private segment of the Russian banking sector seems to be due to the higher interest rates, which private banks have to pay for their deposits.

Keywords: Bank Efficiency, State Ownership, Foreign ownership, Russia

JEL Classification: G21, P30, P34

Suggested Citation

Bernhart, Ulla and Mahlberg, Bernhard and Haiss, Peter R., Russian Banking: The Impact of Ownership on Efficiency and Performance (August 1, 2010). Available at SSRN: https://ssrn.com/abstract=1505951 or http://dx.doi.org/10.2139/ssrn.1505951

Ulla Bernhart

affiliation not provided to SSRN ( email )

Bernhard Mahlberg (Contact Author)

Institute for Industrial Research (IWI) ( email )

Mittersteig 10/4
Vienna, 1050
Austria
+43 1 513 44 11 0 (Phone)
+43 1 513 44 11 2099 (Fax)

HOME PAGE: http://www.iwi.ac.at/

Vienna University of Economics and Business - Institute for Production Management ( email )

Welthandelsplatz 1
Building D2, Entrance C, 3rd floor
Vienna, 1020
Austria
+43 1 313 36 - 5615 (Phone)

HOME PAGE: http://https://www.wu.ac.at/en/prodmanengl/

Peter R. Haiss

WU Vienna University of Economics and Business ( email )

Institute for Export Management
Welthandelsplatz 1
Vienna, A-1020
Austria
++43-664 812 29 90 (Phone)
++43-50505 8944214 (Fax)

UniCredit Bank Austria ( email )

Schottengasse 6-8
Vienna, A-1010
Austria
++43-(0)50505 44214 (Phone)
++43-(0)50505 89 44214 (Fax)

HOME PAGE: http://www.bankaustria.com

IES Vienna - Institute for the International Education of Students

Johannesgasse 7
Vienna, A-1010
Austria

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