Can more risk make state-owned banks more relevant?
A new Asian Development Bank report says Pacific state-owned banks need to change their attitude to risk if they are to fulfil their potential to improve competition and deepen the credit markets of Pacific island nations. The Finding Balance 2019 report profiles the roles, performance, market context, and regulatory framework of 13 state-owned banks in 10 Pacific island countries. It finds that as a group, these banks generated a very low financial return on their investment for their shareholders, and that the “underlying pressures on profitability need to be addressed if these banks are to play a longer term role.”
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