Residential Property Loans and Bank Performance during Property Price Booms: Evidence from Europe
Antonio Martins (antonio.martins@staff.uma.pt),
Ana Paula Serra (aserra@fep.up.pt),
Francisco Martins (vmartins@fep.up.pt) and
Simon Stevenson (s.a.stevenson@reading.ac.uk)
Additional contact information
Antonio Martins: Universidade da Madeira, Caminho da Penteada, Funchal, Portugal
Francisco Martins: FEP, Universidade do Porto
Simon Stevenson: Henley Business School, University of Reading
Annals of Economics and Finance, 2019, vol. 20, issue 1, 247-295
Abstract:
Residential mortgage loans constitute a large proportion of the portfolio of many banks and are one of the key assets in the determination of their performance. Using a dynamic panel model for a sample of 555 banks in the European Union (EU-15) we find that an increase in residential mortgage loans seems to improve bank's performance in terms of both profitability and credit risk in good market, pre-financial crisis, conditions. The results also show that credit risk and profitability are lower during the upturn in the residential property cycle.
Keywords: Residential property prices; Mortgage loans; Bank performance; Dynamic panel estimation (search for similar items in EconPapers)
JEL-codes: C33 E44 G21 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)
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Related works:
Working Paper: Residential Property Loans and Bank Performance during Property Price Booms: Evidence from Europe (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2019:v:20:i:1:martinsserramartinsstevenson
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