Commercial property prices and bank performance

We seek to assess the effect of changes in commercial property prices on bank behaviour and performance in a range of industrialised economies, extending the existing micro literature on bank performance. The results suggest that, consistent with macro-level studies, commercial property prices have a marked impact on the behaviour and performance of individual banks. The signs found are consistent with a view that commercial property provides important forms of collateral that are perceived by banks to reduce risk and encourage lending. Such an impact exists even when conventional independent variables determining bank performance are included. Moreover, there is evidence that the magnitude of this impact is related to the size of the bank, the direction of commercial property price movements, and regional factors. The results have implications for risk managers, regulators and monetary policy makers. Notably, they underline the crucial relevance of commercial property prices as a macroprudential variable that warrants close scrutiny by the authorities. They also highlight the need to develop indicators of individual bank exposure to the property market that could help to calibrate the potential impact of changes in prices in stress tests

Commercial bank load loss recoveries

We present a new approach to analyse historical recovery rates on distressed bank assets. Our approach uses banks’ reported impaired assets and the corresponding specific provisions. The dynamics and drivers of this credit loss recovery proxy are studied for a comprehensive sample of Australian banks from 1989 to 2005. We find that macroeconomic and bank-specific factors influence banks’ estimates of loan loss recoveries, consistent with banks smoothing their earnings. In contrast with findings based on prices of distressed corporate bonds, banks record lower recoveries in years of strong economic growth

The role of commercial real estate investments in the banking crisis of 1985-92

This article examines the role of commercial real estate investments in the banking crisis of 1985-92, an unprecedented period during which more than 1,300 banks failed. Bank failures are fundamentally important because of the unique role played by financial institutions in the provision of business credit. We discover three striking features of banks failing during this period. First, commercial real estate was only a factor in the bank failures of 1988-92. Second, construction loans played a much larger role in bank failures than permanent loans, and the relationship is strongest with construction loans booked during 1983-1985. Third, other ex ante risk measures are systematically related to banking failure throughout the sample period. These results suggest that risk-seeking banks brought about their own demise and commercial real estate, especially construction lending, was one of the vehicles.bank; bank failure; commercial bank; commercial real estate; construction lending; real estate

GROWTH IN AGRICULTURAL LOAN MARKET SHARE FOR ARKANSAS COMMERCIAL BANKS

Changes in commercial bank market shares of farm debt are decomposed into portfolio decisions loanable funds availability and loan market size for 64 counties in Arkansas from 1986 through 1990. A seemingly unrelated regression model is hypothesized to identify county characteristics that are related to changes in commercial bank market shares. Regression results indicate that county differences in economic activity, the relative risk associated with agriculture, farm structure and regional location contributed to changes in commercial bank market shares. The results imply a market niche for rural commercial banks emphasizing agricultural loans in the presence of unlimited branch banking.Banks, Farm debt, Loan portfolio, Market share, Agricultural Finance,

The Role of the Commercial Bank

Med en stor central hall på över fyra våningar skiljer sig byggnaden från det klassiska konstmuseet. Rummet ger med sina vita betongväggar och massiva skala inte bara plats åt konsten, utan förstärker den också. Det diffusa ljuset från takfönstret ger en sakral stämning och hallen kan hålla allt från en enskild tavla till enorma statyer, men också filmvisningar och teater. Samtidigt finns möjligheter till mer traditionella utställningar i de mindre omgivande hallarna. I övrigt finns möjlighet till föreläsningar och undervisning i anslutning till entrén och shoppen.       Byggnaden är också mer än bara en konsthall för Uppsala och årummet. De sunkiga båtarna tas bort och istället skapas ett stadsrum där parken möts av terrasser och byggnader på andra sidan vattnet. En restaurang med uteservering i söderläge mot parken ramar in och skapar en ny mötesplats i ett idag outnyttjad vattenrum. Konsthallen vänder sig mot parken och försöker vara lagom iögonfallande i skarpa linjer, vit betong och svarta granit, utan att ta för mycket plats på kajen.The building differs from the traditional art museum with a large central hall with a height of over four stories.  The room with its massive white concrete walls does not only provide a place for art, but enhances it.  The faded light from the skylight creates an atmosphere of serenity and the room can give space for everything from the smallest painting to large statues, but also theatre and screenings.  The smaller surrounding rooms can house more traditional exhibitions.  In connection with the entrance and shop there are rooms for lectures and workshops. The structure gives more than just an art gallery to Uppsala and the river with its surroundings. The old boats are removed and the park is instead met with terraces at the opposite side of the water.  A restaurant in conjunction with the terraces frames the water and creates a venue in an otherwise unused water space. The entrance faces the park and attempts to be eye-caching in sharp lines, white concrete and black polished granite, without being too extreme

Multicriterial ranking approach for evaluating bank branch performance

14 ranking methods based on multiple criteria are suggested for evaluating the performance of the bank branches. The methods are explained via an illustrative example, and some of them are applied to a real-life data for 23 retail bank branches in a large-scale private Turkish commercial bank

Evidence of bank lending channel in Malaysia

The aim of this paper is to analyse the role of banks in the transmission of monetary policy and business cycle. This paper attempts to look into the assets side as a monetary policy channel to influence economic activities. Changes in the monetary policy channel give an idea to regulate and strengthen the banking industry. The different views raise the following questions: how do changes in the monetary policy transmission affect commercial banks portfolio? If bank lending plays as a monetary policy channel, does it affect the other portfolios? Do the current regulations (such as capital requirement)affect the bank portfolio behaviour? Furthermore, Generalise Least Squares method was used to estimate the monetary changes toward commercial banks portfolio. Annual data was compiled from the year 1994 until 2004. The number of observations was based on the combination of time series and cross-sectional data, which is known as pooled data. In addition, an unbalanced bank-level panel data set for commercial banks was used. Finally, our results found that there exists a bank-lending channel in the case of Malaysia

Efficiency of Commercial Banks in Sub-Saharan Africa: A Comparative Analysis of Domestic and Foreign Banks

Utilizing the stochastic frontier approach, this study conducts a comparative analysis of profit efficiency and cost inefficiency of commercial banks operating in 29 sub-Saharan African (SSA) countries by bank ownership (domestic bank, SSA foreign bank or non-SSA foreign bank), as well as by the bank size during 2000-07. Tobit regressions are employed to assess the impact of environmental factors on the efficiency of commercial banks. The key findings of this empirical analysis suggest that foreign banks tend to outperform domestic banks in terms of profit efficiency. In terms of efficiency by bank size, the smaller the bank, the more profit efficient the bank will be; medium or relatively large banks tend to be the most cost efficient.banking, stochastic frontier, Tobit regression, Africa

The Effect of Financial Institutions Banking Soundness Against Stock Price

This study was conducted to determine the effect of the soundness of banking financial institutions variable as measured by Return on Assets, Net Interest Margin, and Capital Adequacy Ratio on share prices at government banks in the Indonesia Stock Exchange for the period 2008-2015. The population of this study is the Government commercial banks consisting of BRI Bank, BNI Bank, BTN Bank, and Bank Mandiri. The sample of this study is the assessment of the soundness of government commercial banks on stock prices, with the scope of the assessment covering the factors of ROA, NIM, and CAR. The sample was obtained through the publication of 2008-2015 annual financial statements totaling 32 data. The analysis technique uses multiple linear regression analysis, while the measurement tool uses t test, F test, and the coefficient of determination (R2) test. The results showed that the ROA variable had a positive and significant effect on stock prices, the NIM variable had a negative and significant effect on stock prices, the CAR variable had a positive and significant effect on stock prices at government commercial banks in the Indonesia Stock Exchange