The profitability of the consumer credit industry: evidence from Europe

Luisa Anderloni () and Daniela Vandone ()

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

Abstract: The paper focuses on the profitability of the consumer credit industry in Europe. Using consumer credit companies’ financial statement data, we investigate the effect of firm-specific and market-specific factors on the profitability of a sample of French, German, Italian and Spanish consumer credit companies over the period 2005-07. Results highlight that, among firm-level determinants, diversification of products and services within lending to households is the most influential driver of profit. With regards to market-specific factors, the profitability of consumer credit companies is positively affected by the size of the market, and negatively determined by the level of household debt burden.

Keywords: Financial companies; consumer credit; profitability; cross-country analysis (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2010-07-16
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