Asset Specialization as a Long-Term Strategy for Banks in Mexico
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| Format: | Artículo científico |
| Language: | en |
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Instituto Mexicano de Ejecutivos de Finanzas A.C.
2023
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| _version_ | 1876487683468951552 |
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| author | Luis Felipe Llanos |
| author_facet | Luis Felipe Llanos |
| contents | Asset Specialization as a Long-Term Strategy for Banks in Mexico Luis Felipe Llanos César Vela-Beltrán-del-Río Economía y Finanzas banks in Mexico Asset diversification income diversification banking diversification liability diversification Our objective is to establish whether the level of assets, liabilities, and income diversification of the Mexican banks is related to their profitability and risk levels. Using the financial information of the 15 key banks, between 2010 and 2021, along with the Herfindahl-Hirschman Index and a series of polynomial regression analyzes, we calculated the diversification level of each bank. We also computed a series of inflection points suggesting that Mexican banks need to adopt an asset specialization long-term strategy, but to a point because a radical transformation would be detrimental to both return and risk. Similarly, we do not recommend venturing into a radical income diversification strategy, for the same reason. On the other hand, the liability diversification strategy is difficult to apply for achieving the mentioned objectives. Furthermore, we would like to emphasize that our analysis takes into consideration the high presence of foreign banking affiliates in Mexico. 2023 artículo científico 1665-5346 https://www.redalyc.org/articulo.oa?id=423780679003 https://www.redalyc.org/journal/4237/423780679003/ https://www.redalyc.org/journal/4237/423780679003/html/ https://www.redalyc.org/journal/4237/423780679003/423780679003.epub https://www.redalyc.org/journal/4237/423780679003/movil 10.21919/remef.v18.2.777 en http://www.redalyc.org/revista.oa?id=4237 Revista Mexicana de Economía y Finanzas. Nueva Época / Mexican Journal of Economics and Finance application/pdf Instituto Mexicano de Ejecutivos de Finanzas A.C. Revista Mexicana de Economía y Finanzas. Nueva Época / Mexican Journal of Economics and Finance (México) Num.2 Vol.18 |
| format | Artículo científico |
| id | redalyc_423780679003 |
| institution | Redalyc |
| language | en |
| publishDate | 2023 |
| publisher | Instituto Mexicano de Ejecutivos de Finanzas A.C. |
| spellingShingle | Asset Specialization as a Long-Term Strategy for Banks in Mexico Luis Felipe Llanos Economía y Finanzas banks in Mexico Asset diversification income diversification banking diversification liability diversification Asset Specialization as a Long-Term Strategy for Banks in Mexico Luis Felipe Llanos César Vela-Beltrán-del-Río Economía y Finanzas banks in Mexico Asset diversification income diversification banking diversification liability diversification Our objective is to establish whether the level of assets, liabilities, and income diversification of the Mexican banks is related to their profitability and risk levels. Using the financial information of the 15 key banks, between 2010 and 2021, along with the Herfindahl-Hirschman Index and a series of polynomial regression analyzes, we calculated the diversification level of each bank. We also computed a series of inflection points suggesting that Mexican banks need to adopt an asset specialization long-term strategy, but to a point because a radical transformation would be detrimental to both return and risk. Similarly, we do not recommend venturing into a radical income diversification strategy, for the same reason. On the other hand, the liability diversification strategy is difficult to apply for achieving the mentioned objectives. Furthermore, we would like to emphasize that our analysis takes into consideration the high presence of foreign banking affiliates in Mexico. 2023 artículo científico 1665-5346 https://www.redalyc.org/articulo.oa?id=423780679003 https://www.redalyc.org/journal/4237/423780679003/ https://www.redalyc.org/journal/4237/423780679003/html/ https://www.redalyc.org/journal/4237/423780679003/423780679003.epub https://www.redalyc.org/journal/4237/423780679003/movil 10.21919/remef.v18.2.777 en http://www.redalyc.org/revista.oa?id=4237 Revista Mexicana de Economía y Finanzas. Nueva Época / Mexican Journal of Economics and Finance application/pdf Instituto Mexicano de Ejecutivos de Finanzas A.C. Revista Mexicana de Economía y Finanzas. Nueva Época / Mexican Journal of Economics and Finance (México) Num.2 Vol.18 |
| title | Asset Specialization as a Long-Term Strategy for Banks in Mexico |
| topic | Economía y Finanzas banks in Mexico Asset diversification income diversification banking diversification liability diversification |
| url | https://www.redalyc.org/articulo.oa?id=423780679003 https://www.redalyc.org/journal/4237/423780679003/ https://www.redalyc.org/journal/4237/423780679003/html/ https://www.redalyc.org/journal/4237/423780679003/423780679003.epub https://www.redalyc.org/journal/4237/423780679003/movil |