ScholarWorks@숙명여자대학교

초록

This study examines the impact of non-interest income on bank profitability of Korean commercial banks and evaluates the validity of new bank profitability proxy suggested by the intermediation function hypothesis. Also, we adopts the new bank profitability proxy to analyze the determinants of bank profitability of commercial banks in Korea. Our study shows that the correlation between fee income and interest income becomes stronger due to the evolution of intermediation functions by commercial banks. Intermediation-driven profitability measure from reclassifying fee incomes provides distinctive and effective way of measure bank profitability. Lastly, the new approach does measure the common aspect of bank profits because similar results with conventional profit measures such as core income and structural income are produced on bank profitability analysis. The evolution of intermediation functions by commercial banks requires the separation of intermediation-driven profits and profits from other functions and they should be separately analyzed to identify the cause of bank profits. This outcome is practically valuable in consideringways to enhance the profitability of commercial banks in Korea.

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