Australian Specific Bank Features and the Impact of Income Diversification on Bank Performance and Risk

25 Pages Posted: 23 Jun 2015

See all articles by Piyadasa Edirisuriya

Piyadasa Edirisuriya

Monash University; Financial Research Network (FIRN)

Abey Gunasekarage

Monash University; Monash University

Michael J. Dempsey

Ton Duc Thang University (TDTU)

Multiple version iconThere are 2 versions of this paper

Date Written: June 2015

Abstract

Since financial market deregulation, Australian banks have significantly diversified from a dependence on simple products such as interest‐bearing loans to a broader range of financial products services. Such initiatives have transformed the structure of the Australian banking industry and are destined to receive scrutiny following the announcement of Australia's financial services inquiry. Against the common view that attempts by firms to diversify can be expected to impact negatively on financial performance, we find no strong evidence to suggest that diversification has been unfavourable to the performance of Australian banks. We find rather that Australia's banks have improved their risk‐return profiles as an outcome of diversification.

Suggested Citation

Edirisuriya, Piyadasa and Gunasekarage, Abeyratna and Dempsey, Michael J., Australian Specific Bank Features and the Impact of Income Diversification on Bank Performance and Risk (June 2015). Australian Economic Papers, Vol. 54, Issue 2, pp. 63-87, 2015, Available at SSRN: https://ssrn.com/abstract=2621824 or http://dx.doi.org/10.1111/1467-8454.12043

Piyadasa Edirisuriya (Contact Author)

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Abeyratna Gunasekarage

Monash University ( email )

Building 11E
Clayton, Victoria 3800
Australia

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

Michael J. Dempsey

Ton Duc Thang University (TDTU) ( email )

District 7
Ho Chi Minh City, 3001
Vietnam

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
334
PlumX Metrics