Share Repurchase Behavior of Japanese Banks

要約

According to Article 210 of the Commercial Law, a bank (or a firm) with an intention of repurchasing shares has to make two decisions at the board of directors. The one is the decision about whether a bank has a tendency of repurchasing shares in the future or not and then about how many shares she repurchase if she does so. The other is the decision about how many shares she repurchases shares actually in the authorization period. In our paper we show the empirical evidence that non-performing loans and (or) the capital to asset ratio have a crucial influence on two decisions in the Japanese banking industry.

JEL classification: G14; G21; G32;

Keywords: Bank; Stock repurchase; non-performing loans;the capital to asset ratio