Revenue Diversification and Total Assets in Commercial Banks: Evidence from Selected Asean Countries

Abstract:This study reveals the impact of total asset size upon revenue diversification in commercial banks in five of the countries in the Association of Southeast Asian Nations (ASEAN) countries – Indonesia, Malaysia, the Philippines, Thailand, and Vietnam – during the period between 2005 and 2015. By applying the General Moment Method (the GMM) to the unbalanced panel data, this research has determined the impact of the total asset size, as well as the impact of a number of other factors, such as non-performing loans, net interest margin rates, owner equity, business cycles, and the years of the financial crisis. The empirical results show the positive impacts of total asset size, non-performing loans, and the years of the financial crisis upon the levels of revenue diversification. However, other variables are negatively correlated with revenue diversification, such as net interest margin rates, owner equity, and business cycles.