E.

Varhegyi (2004) examined the competition in banking sector of Hungary and its
effects on the probability and efficiency of banks. The study applied the structural measure
Herfindahl-Hirschman (HHI) to estimate the market concentration. To measure the profitability
of banks, the study used Return on Assets (ROA) and Return on Equity (ROE) ratio whereas
efficiency is measured through gross income over assets and operating cost over assets. The
sample size of this study was comprises of eight year (1995-2002). The study concluded that
the plosives ZA shifts in market structure increased the efficiency of the banks but decreased
the profit margin of the banks.
N. Berger, Kunt and Levine (2004) investigated the impact of bank competition and
concentration. This study measured the impact of competition and concentration on the
performance of bank. In this study SCP (Structure - Conduct - Performance) hypothesis and the
competition measured from different models was discussed. This study used Herfindahl-
Hirschman Index (HHI), k-concentration ratio and other competition measures includes market
structure like size and type of banks that may have impact on market conditions in different
way. The study included new indicator for regulatory restriction on competition, legal
impediments to bank competition and measure the effect of foreign and owned state banks on
competition. The study concluded that the concentration was not only measure of competition
but some other indicator that perform well in measurement problems, from the social
perspective bank competition is good in term of concentration measures the result literally
weak. While greater concentration is generally associated with less favorable prices for
customers, higher measured profitability, and reduced firm access to credit.