As long as the bank gains: expanding the retail distribution activity

Danilo Liberati and Francesco Vercelli ()
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Francesco Vercelli: Bank of Italy

No 510, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We investigate the retail distribution of financial products by the Italian banking system between 2010 and 2017. We focus on mutual fund shares, insurance contracts and individually managed portfolios, analysing the characteristics of the banks that distribute these instruments the most and the contribution of each product to bank profitability. We find that banks with larger amounts of bad loans relative to equity distribute more asset management instruments, an activity that does not absorb equity. When liquidity constraints are less binding, banks that are financed more through deposits increase their distribution activity. Moreover, banks with stronger lending specialization are less involved in distributing financial products. Finally, fees from the distribution of individually managed portfolios contribute to bank profitability more than those from the distribution of mutual fund shares.

Keywords: Banks; Distribution fees; Non-interest income (search for similar items in EconPapers)
JEL-codes: D14 G21 (search for similar items in EconPapers)
Date: 2019-10
New Economics Papers: this item is included in nep-ban, nep-ias and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_510_19

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