| Summary: | 碩士 === 國立成功大學 === 財務金融研究所 === 107 === This study examines the impact of noninterest income on risk and risk-adjusted return of government-owned and private banks in Taiwan. Using quarterly data of all publicly issued banks in Taiwan from 2008 to 2018, including foreign banks which also issued in Taiwan, we found three results. First, noninterest income is beneficial for risk-adjusted return of banking industry in Taiwan. However, noninterest income will also increase risk for banks at the same time. Second, examine the impact of noninterest income on government-owned and private banks. We found that government-owned banks can generate more diversification beneficial than private banks. Noninterest income can not only effectively reduce risks, but also improve risk-adjusted return. Although it also improves the return for private banks, it will increase the risk of profitability volatility. Finally, we explore the relationship between noninterest and bank size after separate the data of two types of banks. we found that larger government-owned banks with the higher noninterest income ratio will have better risk and return, while private banks will small are better for it.
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