Financial Performance

THE OUTCOMES OF THIS STUDY

The result for this study discuss the relationship between customer service quality and financial performance among Australian retail financial institutions which divided into three group. The three group are the Big Four, the regional banks and credit union and this study were focused on comparisons between performance scores of financial institution of different asset sizes. The ultimate objective of this research was to explore empirically the relationship between customer service quality and financial performance during the five years from 1994 to 1998 as measured by interest margin, income ratio, capital adequacy and return on assets.

To summarize, there are significant differences in the means of the three groups of financial institutions in the financial performance which are the measure only income ratio and interest margin. However, no significant difference in the means across the three groups of financial institutions for capital adequacy and return on assets. It is also show the credit union financial performance during in five years had the highest interest of margin and income ratio. Moreover, the results indicates that all financial performance variables are positively correlated with service quality.

HOW CUSTOMER SERVICE QUALITY ENHANCE FINANCIAL PERFORMANCE

According to the results and ranking of the mean each of the three groups across the five service quality dimension show a highest rank were comes from the Big Four and credit union.. It indicates that the result display a clear different between strength of the Big Four and the credit union. The Big Four have strength in their operation which is income and the strength of their balance sheet. This can be realistic since most of the Big Four banks is a well-known company and can supply almost all the banking service to the customers. Conversely, the credit union strength are more towards lending portfolio, lean balance sheet and outstanding customer service. This is because, it is the fact that smaller cooperative organisation can manage to survive against established banks also because of their distinctive organisational cultures which appear to produce satisfied and loyal customers who prepared to pay higher and premium  price for loans and others banking services.