Work detail

Banking fee income in the Czech Republic and the EU

Author: Mgr. Karolína Růžičková
Year: 2014 - summer
Leaders: prof. PhDr. Petr Teplý Ph.D.
Work type: Economic Theory
Language: English
Pages: 146
Awards and prizes:
Abstract: This thesis deals with both theoretical and practica
l aspects of banking fee and commission
income in the European Union. Since fee income repre
sents the largest part of non-interest
income earned by banks, it remains a major challeng
e for bank management to set and
maintain an appropriate fee policy. Nevertheless, s
olving for the optimal fee structure has not
yet been accomplished either on a theoretical level
, or in actual practice. In the thesis, we
analyse fee income in EU banking sectors. Our resul
ts show that the Czech banking sector
was not abnormally dependent on fee income compared
to other EU countries in the period
2007–2012. As a result, we argue that the high prof
itability of Czech banks cannot be
attributed to abnormal banking fees and commission
income, but rather other factors should
be considered. Moreover, we study the determinants
of fee income share in individual banks
and discuss the impact of market concentration on t
he magnitude of banking fees. We
conclude that banks facing higher competition tend
to expand more aggressively into non-
traditional activities and therefore they report hi
gher fee income shares. We also study the
relationship between banking fees and banks’ perfor
mance. The results are mixed depending
on applied profitability measure, but in general, b
anks with high shares of fee income exhibit
lower risk-adjusted profitability




Patria Finance
Česká Spořitelna