Buch(elektronisch)#12014
Determinants of Banks'' Net Interest Margins in Honduras
In: IMF Working Papers v.Working Paper No. 14/163
This paper analyzes the determinants of banks'' net interest margins in Honduras during 1998 to 2013—a period characterized by increasing banks'' net interest margins, foreign bank participation and consolidation. In line with findings in the previous literature, we find that operating costs are the most important drivers of banks'' net interest margins. We also find that competition among banks has led to higher concentration and that funding by parent banks positively impacts foreign banks'' net interest margins. Together, these results suggest that banks, particularly foreign banks, are und