Bank performance – what are the main roles of the human capital and asset diversification? Evidence from France

Purpose The aim of this paper is to determine whether the efficiency of banks’ human capital (HC) has moderating effects on the relationship between asset diversification and bank performance over the 2008–2020 period. Design/methodology/approach Our study considers generalized least squares estimation in fixed effects panel. Findings Results show that banks with higher levels of HC and higher degree of diversification reduce bank profitability and efficiency. The results also depict that the financial stability-reducing effects of Income diversification decrease as bank HC efficiency increases. At the same time, the effects of income and asset diversity on financial stability change depending on the performance aspect. Originality/value Previous research on banks’ performance is concentrated on asset diversification. This article broadens to the HC, Asset diversification and the moderating effects of the profitability, stability and efficiency of French Banks.