APPENDIX A: SKEWNESS AND KURTOSIS OF RAW FINANCIAL DATA

Skewness and kurtosis

Covariate Target Nontarget

_{Skewness Kurtosis Skewness Kurtosis}

Equity/total assets 1.033 -0.145 4.130 23.118 Capital funds/liabilities 1.324 1.054 7.714 78.805 Equity/deposits & short

term funding 1.025 0.036 8.815 100.820

Equity/liabilities 1.194 0.252 7.690 80.239

Equity/net loans 5.156 27.758 6.977 59.827

Net loans/customer &

short term funding -0.130 0.160 2.652 15.731 Net loans/total assets -0.630 0.416 -0.116 -0.875 Noninterest

expense/average assets

1.941 6.394 6.020 51.543

Net income/ total

assets -2.343 12.367 -9.526 132.519

Operating income/total

assets 2.145 5.959 -5.453 96.409

Net interest

income/total loans 4.092 19.180 8.648 109.599 Cost to income ratio 0.183 0.191 6.567 59.393 Interest expense/total expense 1.937 4.482 7.710 103.561 Net interest revenues/average assets 0.535 -0.439 7.595 97.498

Net interest margin 0.482 -0.582 16.928 334.935 Recurring earning

power 1.784 3.937 -3.849 86.602

ROAA -3.318 17.094 -8.002 105.317

ROAE -1.243 7.909 -0.739 15.733

APPENDIX B: INTERPRETATION OF PRINCIPAL COMPONENTS

Component number 1 2 3 4 5 6 7 8 9 10 Component name Net income/ total assets Equity/ liabilities Net loans/ total assets Net interest income/ total loans Net loans/ customer & short term funding Net interest margin Net interest revenues/ average assets Interest expense/ total expense Growth Log(assets) Original variable

Equity/ total assets 0.130 0.919 -0.024 0.195 0.056 0.019 0.100 -0.075 0.026 -0.162 Capital funds/ liabilities 0.090 0.961 0.022 0.105 0.094 0.052 0.092 -0.045 0.018 -0.072 Equity/ deposits & short

term funding 0.088 0.833 0.004 0.171 0.200 0.402 0.025 -0.034 0.019 -0.047 Equity/ liabilities 0.098 0.966 -0.010 0.124 0.072 0.065 0.091 -0.046 0.016 -0.085 Equity/ net loans -0.043 0.381 -0.278 0.078 0.051 0.191 -0.037 -0.021 0.020 -0.055 Net loans/ customer & short

term funding 0.058 0.047 0.834 -0.014 0.429 -0.013 0.082 0.083 -0.004 0.026 Net loans/ total assets 0.051 -0.026 0.936 -0.022 -0.075 0.026 0.147 0.060 0.023 0.005

Noninterest expense/

average assets -0.039 0.305 0.067 0.840 0.030 0.141 0.356 -0.141 0.016 -0.120 Net income/ total assets 0.979 0.111 0.032 0.023 0.007 0.044 0.012 0.007 0.003 0.001

Operating income/ total

assets 0.921 0.139 0.001 0.113 0.008 0.043 0.126 0.015 -0.016 -0.006

Net interest income/ total

loans 0.281 0.243 -0.096 0.892 0.072 0.074 -0.095 -0.116 -0.007 -0.097 Cost to income ratio -0.536 0.043 -0.065 0.131 0.052 0.002 -0.013 -0.091 0.044 -0.060 Interest expense/ total

expense 0.063 -0.122 0.099 -0.168 0.015 -0.012 -0.022 0.968 0.043 0.000 Net interest revenues/

average assets 0.271 0.260 0.245 0.140 -0.039 0.150 0.863 -0.022 0.015 -0.048 Net interest margin 0.105 0.262 0.011 0.153 0.060 0.908 0.139 -0.011 0.028 -0.009 Recurring earning power 0.786 0.110 0.082 0.258 0.025 0.055 0.339 -0.020 -0.034 0.029

ROAA 0.970 0.122 0.031 0.033 0.020 0.044 0.036 0.028 -0.004 -0.003

ROAE 0.773 -0.080 -0.003 -0.004 -0.005 -0.010 -0.044 0.078 -0.016 0.009 Deposits and short-term

funding/ total assets -0.014 -0.270 -0.130 -0.077 -0.941 -0.068 0.035 -0.009 0.009 -0.096 Liquid assets/ Customer and

Component number 10 11 12 13 14 15 16 17 18 19 Component name Log(assets ) Equity/ net loans Liquid assets/ Customer and short-term funding Cost to income ratio ROAE Recurring earning power Net loans/ customer & short term funding Operating income/ total assets Equity/ total assets Equity/ deposits & short term funding Original variable

Equity/ total assets -0.162 0.084 0.026 0.004 -0.036 0.021 -0.014 -0.002 0.210 -0.012 Capital funds/ liabilities -0.072 0.087 0.068 0.006 -0.008 -0.001 -0.010 0.002 -0.110 -0.037 Equity/ deposits & short term

funding -0.047 0.141 0.162 0.035 0.005 0.013 0.028 -0.003 -0.052 0.113 Equity/ liabilities -0.085 0.075 0.060 0.005 -0.005 -0.008 0.011 0.008 -0.028 -0.018 Equity/ net loans -0.055 0.835 0.168 0.019 -0.004 0.001 -0.003 0.004 0.001 0.001 Net loans/ customer & short

term funding 0.026 -0.082 -0.077 -0.038 0.016 -0.006 0.294 0.001 -0.005 0.002 Net loans/ total assets 0.005 -0.143 -0.185 -0.026 -0.012 0.012 -0.182 -0.002 0.002 -0.001

Noninterest expense/

average assets -0.120 0.012 -0.011 0.083 -0.001 -0.024 0.002 -0.057 0.000 0.001 Net income/ total assets 0.001 -0.018 0.035 -0.074 0.015 -0.101 0.005 -0.057 0.004 0.000

Operating income/ total

assets -0.006 0.064 0.022 -0.133 -0.021 0.071 0.002 0.272 -0.001 0.000 Net interest income/ total

loans -0.097 0.067 0.047 0.044 -0.002 0.042 -0.002 0.053 0.003 0.000 Cost to income ratio -0.060 0.020 -0.034 0.819 -0.031 -0.016 -0.002 -0.005 0.000 0.000 Interest expense/ total

expense 0.000 -0.015 -0.015 -0.056 0.023 -0.002 0.003 0.000 -0.001 0.000 Net interest revenues/

average assets -0.048 -0.036 -0.079 -0.010 -0.015 0.014 0.003 0.006 0.002 0.000 Net interest margin -0.009 0.140 0.172 -0.002 -0.004 0.004 -0.003 0.001 0.003 -0.007 Recurring earning power 0.029 0.000 -0.015 -0.185 -0.070 0.368 -0.005 0.032 0.004 0.001 ROAA -0.003 -0.058 0.034 -0.031 0.011 -0.060 -0.003 -0.158 0.000 0.001 ROAE 0.009 -0.008 -0.012 -0.066 0.619 -0.016 0.002 -0.003 -0.002 0.000 Deposits and short-term

funding/ total assets -0.096 -0.045 -0.031 -0.038 0.003 -0.003 0.007 0.000 -0.001 0.000 Liquid assets/ Customer and

short-term funding 0.010 0.173 0.825 -0.034 -0.005 -0.002 -0.003 0.001 0.000 0.001 Log(assets) 0.947 -0.038 0.006 -0.040 0.003 0.002 0.001 0.000 -0.002 0.000 Growth ((assets 2005-assets

Component number 20 21 22 Component name ROAA Capital funds/ liabilities Noninterest expense/ average assets Original variable

Equity/ total assets -0.001 0.006 0.000 Capital funds/ liabilities -0.004 0.057 0.000 Equity/ deposits & short term

funding 0.000 0.000 0.000

Equity/ liabilities 0.004 -0.060 0.000 Equity/ net loans 0.000 0.000 0.000 Net loans/ customer & short

term funding 0.000 0.000 0.000 Net loans/ total assets 0.000 0.000 0.000

Noninterest expense/

average assets -0.033 0.003 0.029 Net income/ total assets -0.070 0.003 0.000

Operating income/ total

assets 0.011 -0.001 -0.001 Net interest income/ total

loans 0.027 -0.003 -0.024

Cost to income ratio 0.000 0.000 0.000 Interest expense/ total

expense 0.000 0.000 0.000

Net interest revenues/

average assets 0.002 0.000 -0.001 Net interest margin 0.000 0.000 0.000 Recurring earning power 0.000 0.000 0.000

ROAA 0.065 -0.003 -0.001

ROAE 0.000 0.000 0.000

Deposits and short-term

funding/ total assets 0.000 0.000 0.000 Liquid assets/ Customer and

short-term funding 0.000 0.000 0.000 Log(assets) 0.000 0.000 0.000 Growth ((assets 2005-assets