Tracking down elusive economies of scale
Article Abstract:
Economies of scale in banking does not necessarily result in lower operational and transaction costs. In some branch mergers, the efficiency level is affected by interest costs, reengineering of credit functions, level of customer service, threshhold economies and the need for outsourcing. However, processing functions of a bank benefits from such economies because of fixed costs, standardization and price sensitivity. For the optimal effects of consolidation, the impact should be assessed from the perspective of the whole business.
Publication Name: Journal of Retail Banking
Subject: Business
ISSN: 0195-2064
Year: 1993
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Monitoring loan quality via checking account analysis
Article Abstract:
Analysis of loan quality is conducted using information derived from checking accounts. The theory implies that due to asymmetric information, small loans are advantageous for banks. Results indicate that large banks are more liquid and depend on economies of sclae for profitability. Lending is very competitive as large banks are disadvantaged from the inefficiencies of small loans. Small banks, on the other hand, are dependent on deposit insurance and are typically illiquid.
Publication Name: Journal of Retail Banking
Subject: Business
ISSN: 0195-2064
Year: 1992
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Managing concentration risk in loan portfolios
Article Abstract:
A four-point guide in managing concentration risk in loan portfolios to reduce severe loan losses, regarded as the number one problem faced by the banking industry today, is presented. If properly implemented, this four-step approach to be followed in developing a strategic plan will help ease the problem and in the process, greatly enhance an institution's long-term asset efficiency.
Publication Name: Journal of Retail Banking
Subject: Business
ISSN: 0195-2064
Year: 1993
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