Please use this identifier to cite or link to this item:
Appears in Collections:Accounting and Finance Journal Articles
Peer Review Status: Refereed
Title: Changing Bank Income Structure: Evidence from Large UK Banks?
Author(s): Jaffar, Kalsoom
Mabwe, Kumbirai
Webb, Robert
Keywords: Interest income
Non-interest income
Traditional banking
Deregulation diversification
bank stability
Issue Date: Dec-2014
Date Deposited: 18-Dec-2019
Citation: Jaffar K, Mabwe K & Webb R (2014) Changing Bank Income Structure: Evidence from Large UK Banks?. Asian Journal of Finance & Accounting, 6 (2), pp. 195-215.
Abstract: The UK banking industry has steadily moved from the traditional role of financial intermediation and is increasingly relying on non-traditional business activities that generate fee income, dealings profit and other types of noninterest income. Using the dataset of large British Banks for the period 1986-2012, this study investigates the changes in the bank income structure as a result of the 1986 deregulation and tease out the effect that these changes have had in relation to systemic risk. On a micro analysis, larger banks are more able to sustain high levels of noninterest income. Among the banks Lloyds and HSBC stand out as the major players in noninterest income generation. At aggregate level while interest income reflects a stable trend, we find a significant upward but slightly volatile trend in noninterest income for the period 1999-2008 before a sharp downturn induced by the financial crisis. This paper argues that in terms of financial stability, the banks’ greater reliance on noninterest income particularly commission income is associated with higher systemic risk. This study has shown that there is a positive correlation between interest income and non-interest income for the five banks.
DOI Link: 10.5296/ajfa.v6i2.5975
Rights: Copyrights for articles published in our journals are retained by the authors, with first publication rights granted to the journal. The journal/publisher is not responsible for subsequent uses of the work. It is the author's responsibility to bring an infringement action if so desired by the author.
Licence URL(s):

Files in This Item:
File Description SizeFormat 
5975-23778-1-PB.pdfFulltext - Published Version412.63 kBAdobe PDFView/Open

This item is protected by original copyright

Items in the Repository are protected by copyright, with all rights reserved, unless otherwise indicated.

The metadata of the records in the Repository are available under the CC0 public domain dedication: No Rights Reserved

If you believe that any material held in STORRE infringes copyright, please contact providing details and we will remove the Work from public display in STORRE and investigate your claim.