The Effect of the Diversification in Korean Banks : The Impact on Profit and Risk

This study attempts to examine whether the diversification effort in Korean banks for past years positively affects to banks income structure. We find that although Korean banks have intentionally increased the share of noninterest revenue as a vehicle of banking diversification, it has also accompanied with the soaring of net noninterest income expense. Thus, we find that the key success of banking diversification does substantially depends on operating noninterest income expense