ADOPTING DECISIONS IN THE CORPORATE BANKING SECTOR: A CASE STUDY ON ROMANIA

Mihai Ruscanu ()

Journal of Information Systems & Operations Management, 2023, vol. 17, issue 2, 193-211

Abstract: This paper examines the relationship between corporate loan growth and banking risk and how this relationship is used to adopt decisions in the corporate banking sector, using a panel dataset of 5 banks functioning in Romania over the period 2007-2021. Main findings include the following. The rise of corporate loan growth and the increasing size of the banks decrease the ratio of non-performing loans and therefore the associated risk. Usually, larger banks may have a higher reliance on debt financing instead on equity. The profitability of banks rises when the number of corporate loans is growing and falls as expected when costs increase, when a greater proportion of assets is allowed for allocated for loans and may be influenced negatively by the size of the bank. These insights have a pivotal role, leading to strategic choices to foster growth and resilience in the dynamic landscape of Romania’s corporate banking area.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:rau:jisomg:v:17:y:2023:i:2:p:193-211

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