Economies of Scale and Deposit-Taking Financial Institutions in Canada: Study of British Columbia Credit Unions

1980 ◽  
Vol 12 (1) ◽  
pp. 58 ◽  
Author(s):  
John D. Murray ◽  
Robert W. White
Keyword(s):  
British Columbia ◽  
Financial Institutions ◽  
Economies Of Scale ◽  
Credit Unions

scholarly journals Économies d’échelle dans les opérations des caisses populaires du district de Québec

2009 ◽  
Vol 53 (1) ◽  
pp. 23-43
Author(s):  
Nabil T. Khoury
Keyword(s):  
Financial Institutions ◽  
Economies Of Scale ◽  
Empirical Studies ◽  
Credit Unions ◽  
Financial Intermediaries ◽  
Empirical Results ◽  
Technological Transition

Abstract The application of the computer to the servicing of deposit accounts at banks and non-bank financial intermediaries is a fairly recent development. Most empirical studies of economies of scale in this industry date prior to this technological transition. There is one notable exception, however, and that is the study by D. L. Daniel, W. A. Longbrake and N. B. Murphy (1972), in which they reported economies of scale in the servicing of checking deposits for computerized banks, especially when the number of such accounts exceeds the 10,600 mark. The present study examines the issue for a different type of computer-using deposit institution, namely: a sample of 128 Canadian Credit Unions located in the district of Quebec and referred to as the "Caisses Populaires" (C.P.'s). These institutions were chosen for the study because they present some unique characteristics and also because they were among the first Canadian financial institutions to computerize the servicing of their deposit operations. Following G. J. Benston (1970) and F. Bell and N. Murphy (1968), the data has been tested using two different models. The empirical results of both tests indicate that computerization did not generate any economies of scale in the checking deposit accounts. Further analysis reveals that the potential economies of scale were captured by the lessor of the equipment through a financial arrangement tying the rent to the number of cheking accounts to be serviced.

scholarly journals The Efficiency of Non-Bank Financial Intermediaries: Empirical Evidence from Malaysia

2008 ◽  
Author(s):  
Fadzlan Sufian
Keyword(s):  
Risk Factors ◽  
Data Envelopment Analysis ◽  
Empirical Evidence ◽  
Financial Institutions ◽  
Economies Of Scale ◽  
Financial Intermediaries ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Parametric Data ◽  
Dea Method

This paper investigates the performance of Malaysian non-bank financial institutions during the period of 2000-2004. Several efficiency estimates of individual NBFIs are evaluated using the non-parametric Data Envelopment Analysis (DEA) method. The findings suggest that during the period of study, scale inefficiency outweighs pure technical inefficiency in the Malaysian NBFI sector. We find that the merchant banks have exhibited a higher, technical efficiency compared to their peers. The empirical findings suggest that scale efficiency tends to be more sensitive to the exclusion of risk factors, implying that potential economies of scale may be overestimated when risk factors are excluded.  

scholarly journals Bridging the Gap? Government Subsidized Lending and Access to Capital

2013 ◽  
Vol 2 (1) ◽  
pp. 98-128 ◽  
Author(s):  
Kristle Romero Cortés ◽  
Josh Lerner
Keyword(s):  
Community Development ◽  
Financial Institutions ◽  
Regression Discontinuity ◽  
Financial Institution ◽  
Credit Unions ◽  
Credit Union ◽  
First Year ◽  
Public Funds ◽  
Union Activity

The consequences of providing public funds to financial institutions remain controversial. We examine the Community Development Financial Institution (CDFI) Fund’s impact on credit union activity, using hitherto little studied U.S. Treasury data. The CDFI Fund grants increase lending at credit unions by 3%. For every dollar awarded, 45 additional cents are loaned out to borrowers in the first year, and up to an additional $1.60 is loaned out within three years. Delinquent loan rates also increase slightly. Our panel results are supported by a broadband regression discontinuity analysis. Politics does not seem to play a role in allocating funding. (JEL G28)

Economies of Scale in Credit Unions: Further Evidence

1980 ◽  
Vol 35 (3) ◽  
pp. 769-777 ◽  
Author(s):  
JOHN D. WOLKEN ◽  
FRANK J. NAVRATIL
Keyword(s):  
Economies Of Scale ◽  
Credit Unions

scholarly journals DOES CAPITAL ADEQUACY INFLUENCE THE FINANCIAL PERFORMANCE OF LISTED BANKS IN NIGERIA?

2019 ◽  
Vol 4 (2) ◽  
pp. 69-80
Author(s):  
Arekhandia Alfred Ukinamemen ◽  
Hassan O. Ozekhome
Keyword(s):  
Financial Performance ◽  
Financial Institutions ◽  
Economies Of Scale ◽  
Fixed Effect Model ◽  
Bank Loans ◽  
Capital Adequacy ◽  
Productive Capacity ◽  
Economic Output ◽  
Systemic Crises ◽  
The Impact

Capital adequacy is important for the effective operation of any institution, particularly, its sustenance, viability and future growth. Banks as core financial institutions require sufficient capital base for its fund requirement and needs. Against this premise, banks and other financial institutions must keep balance between capital and available risk in its assets in order to reduce the likelihood of systemic crises, financial fragility and thus guarantee stability. This study empirically examines the impact of capital adequacy on the financial performance of banks in Nigeria. A sample of ten (10) listed banks on the basis of size and availability of data were examined over the period 2010 to 2017, using descriptive statistics, and multivariate panel data estimation technique, after conducting the Hausman, test of correlated random samples, wherein the fixed effect model was selected as the appropriate model. The empirical results revealed that banks’ capital adequacy ratio has a positive and significant impact on the financial performance of banks in Nigeria. Other variables found to be significant in the determination of the financial performance of banks in Nigeria are; bank size, bank loans and advances, debt ratio and growth rate of output. Against the backdrop of these findings, we recommend amongst others; sufficient capital base for banks, increased bank size through economies of scale measures, efficient deployment of bank resources, increased economic output (economic productive capacity) that will stimulate bank performance. These, will, in no doubt, reduce banks’ vulnerability to systemic crises and consequently enhance their stability for national growth through efficient financial intermediation.

Credit unions’ acquisitions of banks and thrifts

2019 ◽  
Vol 11 (3) ◽  
pp. 306-318
Author(s):  
David A. Walker ◽  
Kathryn I. Smith
Keyword(s):  
Capital Structure ◽  
Design Methodology ◽  
Economies Of Scale ◽  
Financial Analysis ◽  
Credit Unions ◽  
Credit Union ◽  
Social Implications ◽  
Economies Of Scope ◽  
Content Type ◽  
Practical Implications

Purpose In total, 14 credit unions have acquired 16 banks and savings institutions since 2012; 7 additional acquisitions are in progress and are expected to close before year-end 2019. The analysis of the population of these acquisitions spans the paths of annual differences in CAMEL ratios. Most acquirers have a somewhat revised capital structure and are often benefiting from economies of scope, as well as economies of scale. Since their acquisitions, the acquiring credit unions have become less risky, measured by simulated CAMEL ratios, and they are lending a larger share of their deposits. There is no apparent financial reason to discourage credit unions from acquiring additional banks and savings institutions. The National Credit Union Administration does not need to be particularly hesitant to allow credit unions to acquire banks and thrifts. Design/methodology/approach Financial analysis is done via simulated CAMEL ratios. Findings After acquiring banks, credit unions are less risky and lend a greater share of their deposits. Research limitations/implications The study analyzes the population of the credit unions that have acquired banks since 2012, but the population consists of 14 banks acquiring 16 credit unions. Practical implications Credit unions should not be prohibited from further acquisitions of banks and thrifts. Social implications Credit union members are better served after a credit union acquires a bank. Originality/value No previous study has explored the effects of credit unions acquiring banks and thrifts, which began in 2012.

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