Czech Commercial Banks´ Net Interest Margin Analysis with Regards to the Changes of Recent Years
|Thesis title in Czech:||Analýza čisté úrokové marže českých bank s ohledem na nedávné změny v sektoru|
|Thesis title in English:||Czech Commercial Banks´ Net Interest Margin Analysis with Regards to the Changes of Recent Years|
|Key words:||bankovnictví, preference klientů, konkurence, digitalizace, regulatorní požadavky, čistá úroková marže, regresní analýza|
|English key words:||Banking, Clients´ Preferences, Competition, Digitalization, Regulatory Requirements, Net Interest Margin, Regression Analysis|
|Academic year of topic announcement:||2014/2015|
|Type of assignment:||Bachelor's thesis|
|Department:||Institute of Economic Studies (23-IES)|
|Supervisor:||prof. PhDr. Petr Teplý, Ph.D.|
|Author:||hidden - assigned by the advisor|
|Date of registration:||21.05.2015|
|Date of assignment:||05.06.2015|
|Date and time of defence:||14.06.2016 08:00|
|Venue of defence:||IES, m314|
|Date of electronic submission:||13.05.2016|
|Date of proceeded defence:||14.06.2016|
|Reviewers:||Mgr. Dominika Katuščáková|
|Since digital world became a new normal, banks have been forced to constantly adapt their services to the changing demands of clients. This, together with the tightening regulatory requirements, the dynamics present in the financial market and the growing competition from non-banking institutions, has put a lot of pressure on banks and much has changed in the industry recently.
This thesis analyzes the recent trends in the banking sector and shows their quantitative consequences, while the greatest emphasis is placed on net interest margin, a commonly accepted measure of profitability and efficiency of financial intermediation. A regression analysis is performed to find the main determinants of the margin for Czech banks. Consequently, the most significant determinants are linked back to the general trends, their interconnectedness is explained and a potential future development of the margins is discussed.
|Černohorský, J. and Teplý, P. (2011). Základy financí. Prague: Grada.
Hinssen, P. (2010). The New Normal. Gent: MachMedia.
Ho, T. and Saunders, A. (1981). The Determinants of Bank Interest Margins. Journal of Financial and Quantitative Analysis, 16(4), pp.581-600.
Mejstřík, M., Pečená, M. and Teplý, P. (2008). Basic Principles of Banking. Prague: Karolinum press.
Wooldridge, J. (2012). Introductory Econometrics: A Modern Approach. 5th ed. Mason: South-Western.
|Preliminary scope of work|
2. Theoretical background
2.1. Commercial bank definition
2.2. General trends in the banking industry
3. The Czech banking sector
4. Net interest margin analysis for Czech banks
5. Discussion of the results
|Preliminary scope of work in English|
|In theoretical sections, we provide basic definitions and introduce the banking trends of recent past. Further, we focus there specifically on the Czech banking sector, for which we give an overview of its past development and current state.
In the empirical part of the text, we analyze the most salient quantitative changes for Czech banks and build our model, which we then use to explain the decreasing trend in net interest margin of those institutions. Discussion of our results follows.