Bank Syndication – A Premise for Increasing Bank Performance or Diversifying Risks?

Nitescu Dan Costin () and Anghel Cristian Marius ()
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Nitescu Dan Costin: Department of Money and Banking, Doctoral School of Finance, The Bucharest University of Economic Studies, Bucharest, 010374, Romania
Anghel Cristian Marius: Department of Money and Banking, Doctoral School of Finance, The Bucharest University of Economic Studies, Bucharest, 010374, Romania

Economics - The Open-Access, Open-Assessment Journal, 2025, vol. 19, issue 1, 23

Abstract: The objective of this research is to identify whether the risks associated with bank syndications can contribute to the increase or decrease in bank profitability and also whether bank syndications can contribute to the dispersion of risks associated with this activity, within the three most important financial markets: the USA, Europe, and China. To identify the interdependencies between bank profitability and risk diversification, the article analyses a panel vector autoregression estimated over the period 2008–2020 and a quantile regression. The factors considered are consistent with the relationship between risk and return in bank syndications: return factors (return on assets, volume of syndicated loans) and risk factors (non-performing loans, foreign exchange rate, interest rate). The results of the research reflect that risks assumed in bank syndications can be dispersed among syndicate participants and also bank syndications contribute to bank profitability. The results of this research can be further utilized to develop risk management capabilities and adjust financial mechanisms to manage vulnerabilities in the dynamic context of crises.

Keywords: syndicated loans; profitability; economic growth; risk diversification; credit risk (search for similar items in EconPapers)
JEL-codes: C58 E51 F21 F23 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:econoa:v:19:y:2025:i:1:p:23:n:1003

DOI: 10.1515/econ-2025-0144

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