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Al-Qaraleh, MKM, 2023. Profitability and efficiency of the UK commercial banks over periods of unstable markets: 2010-2021. PhD, Nottingham Trent University.
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Mu'ath Khalaif Musallam Al-Qaraleh 2023..pdf - Published version Download (2MB) | Preview |
Abstract
The thesis has been directed to empirically investigate the financial performance (profitability and efficiency) of the UK commercial banks using an unbalanced panel dataset covering 416 bank-year observations of 38 domestic and foreign commercial banks operating in the UK from 2010 to 2021. This period reflects numerous financial, political, and economic decisions and events, such as the post-2007/09 global financial crisis, the Basel Capital Accord (Basel III), Brexit, and the Covid-19 pandemic. As financial institutions are sensitive to such events, the financial performance (profitability and efficiency) of the UK banking sector is subjected to be affected by these events. The banking sector faces various challenges in dealing with the urgent requirements of this contemporaneous system. These challenges force banks' management to put extra effort into managing their financial activities to improve their profitability and efficiency, increasing stakeholder wealth. In line with other fundamental businesses, the banking sector is recognised as building the country's economy and guaranteeing stability for that economy. To this end, efficient financial performance requires UK commercial banks' managers, supervisors, and financial policymakers to know and understand the determinants of performance measures (profitability and efficiency). This research investigates the association between UK commercial banks' profitability and presumed bank-specific (internal), industry-specific, and macroeconomic (external) explanatory variables. Also, the efficiency of UK commercial banks is evaluated using two stages. In the first stage, the Data Envelopment Analysis (DEA) double bootstrap method was applied to examine bank efficiency scores, providing a comprehensive explanation and comparison of efficiency between different bank groups based on the size, ownership status and ownership structure. In the second stage, regression models were used to investigate the determinants of banks' efficiency.
Also, for both performance measures, profitability and efficiency, the research period has been divided into two sub-periods (before and after 2016, the year of Brexit) to investigate the determinants of profitability and efficiency of the UK commercial banks. This research applies the methods of the Generalised Method of Moments (GMM, employing the system and difference estimators with both (one-step) and (two-step) procedures) to estimate the dynamic panel data models. The Ordinary Least Squares (OLS) and the Fixed Effect (FE) models are used for comparison. This research contributes to the existing literature by using a dataset covering the recent and the more extended period from 2010 to 2021. It considers additional factors, such as Basel III liquidity ratios, Brexit and Covid-19, not employed in previous studies of the UK banks' profitability and efficiency. This research provides the basis for developing in-depth knowledge of the UK commercial banks to improve their financial performance (profitability and efficiency) and efficient decision-making by UK commercial bank managers. It also helps policymakers with future decisions to balance market conditions for banks, which will contribute to overall economic stability.
| Item Type: | Thesis |
|---|---|
| Creators: | Al-Qaraleh, M.K.M. |
| Contributors: | Name Role NTU ID ORCID |
| Date: | March 2023 |
| Rights: | The copyright in this work is held by the author. You may copy up to 5% of this work for private study or personal, non-commercial research. Any re-use of the information contained within this document should be fully referenced, quoting the author, title, university, degree level and pagination. Queries or requests for any other use, or if a more substantial copy is required, should be directed to the author. |
| Divisions: | Schools > Nottingham Business School |
| Record created by: | Laura Ward |
| Date Added: | 15 Jan 2024 09:07 |
| Last Modified: | 15 Jan 2024 09:07 |
| URI: | https://irep.ntu.ac.uk/id/eprint/50681 |
https://orcid.org/0000-0002-2258-900XActions (login required)
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