Determinants of Banks’ Net Interest Margins in Honduras
Journal Title: Journal of Banking and Financial Economics - Year 2017, Vol 1, Issue 7
Abstract
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 fi ndings in the previous literature, we fi nd that operating costs are the most important drivers of banks’ net interest margins. We also fi nd 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.
Authors and Affiliations
Koffie Nassar, Edder Martinez, Anabel Pineda
Keywords
Related Articles
- EP ID EP298346
- DOI 10.7172/2353-6845.jbfe.2017.1.1
- Views 88
- Downloads 0
Comparing the Performance of Logit and Probit Early Warning Systems for Currency Crises in Emerging Market Economies
We compare how logit (fi xed effects) and probit early warning systems (EWS) predict in-sample and out-of-sample currency crises in emerging markets (EMs). We look at episodes of currency crises that took place in 29 EMs...
Sovereign Debt Restructurings in Belize: Debt Sustainability and Financial Stability Aspects
This paper examines the causes, processes, and outcomes of the two Belize sovereign debt restructurings in 2006–07 and in 2012–13, which occurred outside an IMF-supported program. It finds that the motivation for the two...
Feedback to the ECB’s Monetary Analysis: The Bank of Russia’s Experience with Some Key Tools
The paper investigates to what extent some basic tools of the ECBs monetary analysis can be useful for other central banks given their specific institutional, economic and financial environment. We take the case of the B...
Trade Policy Barriers: An Obstacle to Export Diversification in Eurasia
Despite trade liberalization efforts made by Eurasian countries, the export structure of the region shows significant levels of concentration across export destinations. To shed light on this observation, this research a...
The Finance and Growth Nexus Re-Examined: Do All Countries Benefi t Equally?
A large theoretical and empirical literature has focused on the impact of fi nancial deepening on economic growth throughout the world. This paper contributes to the literature by investigating whether this impact differ...