Earnings Momentum and Bank Loan Quality

2020 ◽  
Author(s):  
Shuping Chen ◽  
John M. McInnis ◽  
Christopher G. Yust
Keyword(s):  
Bank Loan ◽  
Loan Quality ◽  
Earnings Momentum

Herding behaviour in the Australian loan market and its impact on bank loan quality

2015 ◽  
Vol 57 (4) ◽  
pp. 1149-1176 ◽  
Author(s):  
Vuong Thao Tran ◽  
Hoa Nguyen ◽  
Chien Ting Lin
Keyword(s):  
Bank Loan ◽  
Loan Market ◽  
Loan Quality

scholarly journals GDP growth as a bank loan quality determinant

2020 ◽  
Vol 2/2020 (14) ◽  
pp. 21-37
Author(s):  
Joanna Rachuba ◽  
Keyword(s):  
Financial Crises ◽  
Common Knowledge ◽  
Relevant Literature ◽  
Research Problem ◽  
Bank Loan ◽  
Gdp Growth ◽  
Loan Quality ◽  
Macroeconomic Determinants ◽  
Macroeconomic Environment

Past financial crises and recessions have revealed the importance of the economy’s condition for the loan quality. Macroeconomic determinants of the non-performing loans have been attracting considerable attention in recent years. The aim of this paper is to organize and summarize studies examining the role of GDP growth and its impact on bank loan quality. This approach reveals the research problem which is to specify if there exists a statistically significant relationship between economic growth and the level of non-performing loans. It is equally important to determine the direction of this link. By appealing to common knowledge, the research hypothesis states that an increase in economic activity results in improving loan quality. To verify the hypothesis, the analysis of the relevant literature and the methods of verbal as well as tabular description have been applied. Empirical results on the link between the macroeconomic environment and the level of non-performing loans appear to be quite conclusive. It has been found that an economic expansion generally improves the loan quality. This broadly proven relationship is in line with many studies which confirm the borrowers’ increased willingness to repay debts in a favourable economic environment. Far less frequently, the macroeconomic activity leads to future bank losses. Additionally, some studies do not provide any statistically significant effect of GDP growth on the loan quality.

scholarly journals Ownership complexity and loan quality: Evidence for listed commercial banks in Vietnam

2021 ◽  
pp. 47-51
Author(s):  
Phan Hoang Long Phan
Keyword(s):  
Commercial Banks ◽  
Positive Impact ◽  
Bank Loan ◽  
Government Ownership ◽  
Loan Portfolio ◽  
Bank Ownership ◽  
Loan Quality ◽  
The Relationship ◽  
Dispersion Calculation

This paper examines the relationship among aspects of bank ownership complexity, including ownership dispersion and type, and the quality of bank loan portfolio. The data used for analysis is an unbalanced panel consisting of 13 listed commercial banks in Vietnam for the period of 2010 - 2019. The non-performing loan (NPL) ratio is used as an indicator of loan quality. The results showed that ownership dispersion, calculation based on the Herfindahl–Hirschman Index of large shareholding, improves the loan quality. Foreign ownership is also found to have positive impact on the loan quality. However, there is no relationship established between government ownership and loan quality.

scholarly journals The Potential for Biases in Resolving Loan Problems

2021 ◽  
Vol 10 (3) ◽  
pp. 57-66
Author(s):  
Richard Brody ◽  
Matias Sokolowski ◽  
Reilly White
Keyword(s):  
Financial Statements ◽  
Bank Loan ◽  
Future Research ◽  
Financial Reports ◽  
Course Of Action ◽  
Prior Literature ◽  
Loan Quality ◽  
Psychology Literature ◽  
Loan Officers ◽  
Covenant Violations

This paper describes how behavioral biases influence the resolution of financial covenant violations. Prior literature documents that violation waivers are common; however, there is a lack of discussion on the determinants that lead loan officers to waive covenant violations. We rely on the escalation of commitment bias (or the sunk cost phenomenon) to discuss how loan officers may become attached to a selected course of action and fail to incorporate new information, increasing the likelihood of covenant waivers. We explain the implications of this bias on bank financial reports by detailing how accounting links loan quality to bank financial statements. We further draw on the psychology literature to offer potential solutions to mitigate overcommitment in the context of loan officers. Future research can examine the extent to which loan officers knowingly or unknowingly steer away from rational decision-making. This study has practical implications as users of bank financial reports, including investors, auditors, examiners, and bank managers, learn about processes and challenges on how accounting mechanics link bank loan portfolios to financial statements.

scholarly journals The Vanishing Interest Income of Chinese Banks

2021 ◽  
pp. 1-20
Author(s):  
Karlo Kauko
Keyword(s):  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Bank Loan ◽  
Frontier Analysis ◽  
Nonperforming Loans ◽  
Loan Portfolios ◽  
Interest Income ◽  
Chinese Banks ◽  
Loan Quality

Abstract Chinese banks likely have more nonperforming loans (NPLs) than officially reported. Banks’ NPLs often deviate from Benford's law. As hidden NPLs earn no interest income, loan quality problems may erode the gross interest income of banks. Using stochastic frontier analysis, we estimate the interest income of a hypothetical profit-maximizing Chinese bank with no credit quality problems. Taking the deviation of actual interest income from the calculated efficient income, we then attempt to reveal the amount of hidden NPLs in Chinese banks. Our results uncover a substantial weakening in the quality of Chinese bank loan portfolios in 2016.

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