| Abstract [eng] |
Over recent decades, in the context of liberalization of financial markets processes, started active development of international banking. In developing economies foreign-owned banks began to penetrate at the beginning of the 1990s as a consequence of significant economic and political changes and after removal of entry barriers. The opening of the market to foreign investors was driven by ambition, both quantitatively and qualitatively improve financial intermediation. Although the extension of international financial institutions is noticeable in many countries, the scale of their activity is different. At the beginning of the 1990s, in Central and Eastern Europe foreign banks controlled less than 20 per cent banking sector assets and more than 20 years later international finance institutions already has about 85 per cent of the total banking sector assets. For comparison, between EU-15 countries only in Finland and Luxembourg foreign banks control more than 50 per cent of the banking sector, while in the Eastern Asia international banks managed assets, on average, only represents 7 per cent. These trends suggest that banking environment of Central and Eastern European countries significantly differs not only in Europe but also worldwide. The fact that financial system of Central and Eastern European countries is bank-based, highlights the important role of international credit institutions in this region, particularly their role to economic development. For this reason, the activities of foreign banks are increasingly becoming an object of scientific studies. It can be noted that studies usually considered foreign bank penetration stimulating factors (Kladova, Parfenova and Juščius, 2014; Hryckiewicz and Kowalewski, 2008; Claessens and Van Horen, 2012; Leung, Young and Fung, 2008; Poghosyan and Poghosyan, 2010), investigated foreign banks' impact on the domestic credit supply (Allen, Jackowicz, Kowalewski and Kozlowski, 2015; Iwanicz-Drozdowska and Witkowski, 2016; Wu, Luca and Jeon, 2011; Bertasi, Demirgüç-Kunt and Huizinga, 2015; Jeon, Oliver and Wu, 2013) and the effect of international banks on the local banking sector (Keskin and Degirmen, 2012; Claessens and Van Horen, 2012; Fernández-Sáez, Picazo-Tadeo and Beltrán-Esteve, 2015; Ukaegbu ir Oino, 2014). According to such research directions, there is a need to further examine the potential risk of foreign-owned banks activity for domestic banking system. High dependence on parent bank's decisions may have not only a positive effect, but also bring negative consequences for the economy, especially if the parent bank's decisions do not consider the situation in host country. The object of the master thesis are parent banks and their subsidiaries, conducting business in Central and Eastern European countries. The aim of research is to evaluate the influence of home countries external and internal factors on foreign-owned commercial banks in Central and Eastern European countries. Results of the empirical study showed that variables from subsidiaries environment have greater influence on both lending interest rates and net interest margin. Host country’s inflation has the most significant influence on dependent variables. It is important to note that the strongest influence on loan interest rates makes non-performing loans of subsidiaries. In addition, it was found that host country’s real GDP and net return on equity of non-financial corporations also have significant influence on dependent variable. It should be noted that only parent banks macroeconomic indicators contribute to lending interest rates. Regressors from subsidiaries environment have greater influence on their net interest margin. In addition to host country inflation, banking concentration level plays also an important role. Parent banks capital ratio and home country net return on equity of non-financial corporations also contribute to net interest margin of subsidiaries. |
