Effects of Non-Interest Income Diversification on Stock Return and Risk of Thai Commercial Bank in the Stock Exchange of Thailand

Authors

นายวิโรจน์ ไพบูลย์เวชสวัสดิ์, รศ.ดร.สรศาสตร์ สุขเจริญสิน

Published

พัฒนาการเศรษฐกิจปริทรรศน์

Abstract

The purpose of this study is to expand the empirical study results on the impact of non-interest income distribution to the return and risk of banks of a group of 10 commercial banks that are listed on the Stock Exchange of Thailand over the period of 19 years from 1997-2015. From the empirical study, it is found that the bank’s adjusted non-interest revenues have increasing pattern and there is a positive relationship between non-interest revenues and profitability. In addition, it is found that the increasing trend of the proportional income from commission fees and the income from various investments lead to a reduction in the risk-adjusted rate of return of the banks. Especially, when the commercial banks adjust the distribution index by depending too much on non-interest revenues (over-diversification) will negatively affect the risk-adjusted rate of return.

(2564). Effects of Non-Interest Income Diversification on Stock Return and Risk of Thai Commercial Bank in the Stock Exchange of Thailand. พัฒนาการเศรษฐกิจปริทรรศน์, 15(2), 111-134.