Please use this identifier to cite or link to this item:
http://hdl.handle.net/11375/27250
Title: | Non-traditional banking activities and bank financial reporting quality |
Authors: | Guo, Mengyang Jin, Justin Liu, Yi Nainar, S.M. Khalid Michael Lee-Chin & Family Institute for Strategic Business Studies |
Keywords: | Banking;Non-interest income;Earnings quality;Discretionary loan loss provisions |
Publication Date: | Jan-2021 |
Series/Report no.: | Michael Lee-Chin & Family Institute for Strategic Business Studies Working Paper;2021-01 |
Abstract: | We examine whether and how non-traditional banking activities affect the quality of banks’ financial reporting. We find that a bank’s ratio of non-interest income (derived from nontraditional activities) to total operating income is positively and significantly associated with the magnitude of discretionary loan loss provisions, our proxy for financial reporting quality. Valuation Insight: Earnings from non-traditional activities (non-interest income) are found to cause banks to increase discretionary loan-loss provisions and, accordingly, imply lower financial reporting quality. From a valuation perspective, the non-interest income therefore has a smaller impact on firm value than interest income. |
Description: | 39 p. ; Includes bibliographical references (pp. 25-28). October 2020 ; This version: January 1, 2021. |
URI: | http://hdl.handle.net/11375/27250 |
Appears in Collections: | Michael Lee-Chin & Family Institute for Strategic Business Studies Working Paper Series |
Files in This Item:
File | Description | Size | Format | |
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sbv_wp_2021-01.pdf | 346.9 kB | Adobe PDF | View/Open |
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