Title: Loan growth and interest income of Italian listed banks: a multivariate analysis

Authors: Chiara Crovini; Giovanni Ossola; Guido Giovando

Addresses: Department of Management, School of Management and Economics, University of Turin, C.so Unione Sovietica 218/bis, 10134, Turin, Italy ' Department of Management, School of Management and Economics, University of Turin, C.so Unione Sovietica 218/bis, 10134, Turin, Italy ' Department of Management, School of Management and Economics, University of Turin, C.so Unione Sovietica 218/bis, 10134, Turin, Italy

Abstract: This study focuses on the relationship between gross loans and the related reserves for impaired loans of the banks listed on the Italian Stock Exchange between 2005 and 2014. In our empirical research, we analysed the trend of those items and we also concentrated on the impact of net loans on total assets. Afterwards we monitored the correlation between loan growth, bank solvency, loan losses and the interest income of each bank in order to analyse the impact on the profitability of the banks and evaluate the effects of a specific loan policy. Finally, we concentrated on the multivariate linear regression whose dependent variable is the variation of the interest income between 2013 and 2014. Our research raises important issues on the necessary policy supervision in terms of risk management because, thanks to our analysis, we underline the strategic role of loan growth and its impact on the economic profitability of Italian listed banks.

Keywords: listed banks; Italy; loan growth; impaired loans; interest income; multivariate regression; MANOVA; net loans; total assets; bank solvency; loan losses; bank profitability; loan policy; risk management.

DOI: 10.1504/IJMABS.2016.080223

International Journal of Markets and Business Systems, 2016 Vol.2 No.2, pp.85 - 101

Received: 21 Jan 2016
Accepted: 16 Apr 2016
Published online: 08 Nov 2016 *

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