Complex ownership structures, banks' capital structure and performance.

Summary This thesis examines the impact of shareholder structure on the capital structure and performance of European commercial banks over the period 2002-2010. It is composed of three empirical tests. The first chapter tests the effect of the divergence between the control and pecuniary rights of an ultimate shareholder on the adjustment of the capital ratio to its optimal level and on the credit supply by banks. The results show that in the presence of divergence between control and pecuniary rights, banks do not issue capital to increase their ratio and, instead, they reduce their size by slowing down their loan supply. Chapter 2 tests the effect of this divergence on bank profitability and risk in normal and crisis times. The results show that although a divergence between control and pecuniary rights is associated in normal times with lower profitability and higher risk, it did, in contrast, improve profitability and contribute to bank resilience during the 2007-2008 financial crisis. The third chapter tests whether the network of shareholders to which the bank is linked within a chain of control affects the relationship between diversification and performance. The results show that the presence of institutional investors in chains of control helps banks reap benefits when they diversify.