Financial inclusion and bank profitability: evidence from a developed market  

Kumar, Vijay and Thrikawala, Sujani and Acharya, Sanjeev (2020) Financial inclusion and bank profitability: evidence from a developed market. online, 5 June 2020. (In Press)

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Abstract or Summary

Previous literature supports the view that financial inclusion leads to economic growth and helps alleviate poverty; however, it is still unclear whether financial inclusion increases bank profitability. Using a sample of 122 Japanese banks from 2004 to 2018, we investigate this question. We find that financial inclusion is important even in a developed economy; branch contraction reduces the profitability of Japanese banks, although the numbers of loan accounts and automated teller machines (ATMs) do not affect bank profitability. Among bank-specific variables, cost management, credit risk management, and bank size are the key drivers of profitability.

Item Type:Working or discussion paper
Keywords that describe the item:Financial inclusion, Bank profitability, ATMs, Japanese banks
Subjects:H Social Sciences > H Social Sciences (General)
H Social Sciences > HG Finance
Divisions:Schools > Centre for Business, Information Technology and Enterprise > School of Business and Adminstration
ID Code:7570
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Deposited On:20 Nov 2020 01:52
Last Modified:01 Feb 2021 23:47

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