The effect of perceived performance risk and brand trust on the intention to purchase bank shares : assessing the brand personality of two bank brands

Abstract

The major banks in Malta have been the only companies listed on the Stock Exchange whose shares experience true price fluctuations. Share prices of the remaining listed companies are somewhat static and hence do not present themselves as attractive an investment as those of the major banks. This study investigates two potential predictors to the Intention to Purchase Bank Share, namely Perceived Performance Risk and Brand Trust. Reason suggests the existence of a relationship between risk and intention, which relationship is further supported through literature. Trust in a brand is traditionally linked to intention in transactions involving tangibles where the brand lends itself to the user mitigating the uncertainty and risk. By resorting to a specific dimension of risk, namely Perceived Performance Risk, this study investigates whether this relationship between risk and intention extends itself to intangibles such as shares. The suggested relationship between Brand Trust and Perceived Performance Risk is also investigated. Given that they study was designed to be carried out on two independent samples of bank shareholders each representing one of the two major banks, both with established brand names in the industry, this study posed an interesting platform for the analysis of Brand Personality as a basis to map positioning. The hypotheses that as Brand Trust increases Intention to Purchase Bank Shares increases, as Perceived Performance Risk increases the intention to Purchase Bank Shares decreases, the negative relationship between the two constructs Brand Trust and Perceived Performance Risk, in which the higher the Brand Trust the lower the Perceived Performance Risk, are tested.