TY - JOUR
T1 - Bank profitability during recessions
AU - Bolt, W
AU - Hoeberichts, MM
AU - Haan, L de
AU - van Oordt, MRC (Maarten)
AU - Swank, Job
PY - 2012/6/6
Y1 - 2012/6/6
N2 - This paper contributes to the literature on the relation between bank profitability and economic activity. When allowing for stronger co-movement of bank profit with economic activity during deep recessions, we find a much larger impact of output growth on bank profitability than commonly found in the literature. Among the different components of bank profit, loan losses are the main driver of this result. We also find long-term interest rates in previous years to be important determinants of bank profit in times of high economic growth. Our findings are robust to the use of aggregate or individual bank data.
AB - This paper contributes to the literature on the relation between bank profitability and economic activity. When allowing for stronger co-movement of bank profit with economic activity during deep recessions, we find a much larger impact of output growth on bank profitability than commonly found in the literature. Among the different components of bank profit, loan losses are the main driver of this result. We also find long-term interest rates in previous years to be important determinants of bank profit in times of high economic growth. Our findings are robust to the use of aggregate or individual bank data.
U2 - 10.1016/j.jbankfin.2012.05.011
DO - 10.1016/j.jbankfin.2012.05.011
M3 - Article
SN - 0378-4266
VL - 36
SP - 2552
EP - 2564
JO - Journal of Banking and Finance
JF - Journal of Banking and Finance
ER -
