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Bank business models

Author

Listed:
  • Rungporn Roengpitya
  • Nikola Tarashev
  • Kostas Tsatsaronis

Abstract

We identify three business models using balance sheet characteristics of 222 international banks and a data-driven procedure. We find that institutions engaging mainly in commercial banking activities have lower costs and more stable profits than those more heavily involved in capital market activities, mainly trading. We also find that retail banking has gained ground post-crisis, reversing a pre-crisis trend.

Suggested Citation

  • Rungporn Roengpitya & Nikola Tarashev & Kostas Tsatsaronis, 2014. "Bank business models," BIS Quarterly Review, Bank for International Settlements, December.
    • Handle: RePEc:bis:bisqtr:1412g
    as

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    References listed on IDEAS

    as
    1. Ayadi, Rym & De Groen, Willem Pieter, 2014. "Banking Business Models Monitor 2014: Europe," CEPS Papers 9713, Centre for European Policy Studies.
    2. Manganelli, Simone & Altunbas, Yener & Marqués-Ibáñez, David, 2011. "Bank risk during the financial crisis: do business models matter?," Working Paper Series 1394, European Central Bank.
    3. Edward Zaik & John Walter & Gabriela Retting & Christopher James, 1996. "Raroc At Bank Of America: From Theory To Practice," Journal of Applied Corporate Finance, Morgan Stanley, vol. 9(2), pages 83-93, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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