Abstract
Over the period between 2008 and 2012 the loans to customers trend, the quality deterioration of the loans to customers portfolios and the interest return on the lending to customers activity showed in Italy relevant heterogeneities by bank size and by juridical connotation. This paper, based on financial statements data between 2008 and 2012 from about 500 Italian banks, adopts a panel data analysis to investigate if the heterogeneities showed in the loans to customers trend, in the quality deterioration of the loans to customers portfolios and in the interest return on the lending to customers activity are effectively significant and to what extent they could be explained by the differences that could be identified in the main features of the intermediation model adopted by banks. Moreover, this paper investigates the existing relationship between the loans to customers development and the credit quality deterioration and to what extent they both contribute to affect the economic return of the lending to customers activity.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
From 2012 the methodology adopted by the Bank of Italy to classify banks by size has been changed, moving from an individual approach to a consolidated one. To classify the sample by bank size, the classification of banks by size in 2012 followed t. The robustness of this simplification has been verified for each bank of the sample applying the criteria specified in Table 3.1 at the average of the total assets of banks between 2012 and 2011 and between 2011 and 2010, analysing and modifying each incongruity.
- 2.
As specified by the article 70 of the Legislative Decree 385/1993 and subsequent amendments (the Italian Consolidated Law on Banking) among the norms on the crisis management procedures (Title IV).
- 3.
As specified by the article 107 of the Legislative Decree 385/1993 and subsequent amendments (the Italian Consolidated Law on Banking) among the norms on the entities operating in the financial sector (Title V).
- 4.
Looking at the credit quality deterioration between 2011 and 2012, however, we need to take into account that it could also reflect the possible increase of the volume of past due exposures in comparison to 2011, cause of the change in the requisites for their identification. Indeed, from 2012 all the credit exposures have to be classified as past due after 90 days of delay, while before 2012 for some kind of credit exposure the limit was 180 days.
- 5.
The Bank Lending Survey (BLS) is conducted quarterly by the Bank of Italy on behalf of the Eurosystem on a sample of the eight major Italian banking groups, accounting for more than two-thirds of the Italian lending market. It provides qualitative information on the supply and demand factors affecting the loans to customers trend. The Regional bank Lending Survey (RBLS) is conducted every 6 months by the Bank of Italy on a sample of round 400 Italian banks, accounting for more than 80% of the Italian lending market and more representative of the composition of the Italian banking system by bank size. Therefore, it enables to deepen the analysis of the credit supply and demand factors also by bank size. For further information on the Bank Lending Survey (BLS) refer to the methodological notes available on (www.bancaditalia.it/statistiche/tematiche/moneta-intermediari-finanza/intermediari-finanziari/indagine-credito-bancario), to Berg et al. (2005) and to European Central Bank (2003).
References
Albertazzi, U., & Bottero, M. (2013, July). The procyclicality of foreign bank lending: Evidence from the global financial crisis (Working Papers, 926). Bank of Italy.
Albertazzi, U., & Bottero, M. (2014). Foreign bank lending: Evidence from the global financial crisis. Journal of International Economics, 92(Supplement 1), S22–S35.
Albertazzi, U., & Marchetti, D. J. (2010, April). Credit supply, flight to quality and evergreen: An analysis of bank-firm relationships after Lehman (Working Papers, 756). Bank of Italy.
Albertazzi, U., Ropele, T., Sene, G., & Signoretti, F. M. (2012, September). The impact of the sovereign debt crisis on the activity of Italian banks (Occasional Papers, 133). Bank of Italy.
Altunbas, Y., Gambacorta, L., & Marques-Ibanez, D. (2010). Bank risk and monetary policy. Journal of Financial Stability, 6(3), 121–129.
Altunbas, Y., Manganelli, S., & Marques-Ibanez, D. (2011, November). Bank risk during the financial crisis. Do business models matter? (Working Paper series, 1394). European Central Bank.
Ayadi R., Arbak E., & De Groen, W. P. (2011). Business models in European banking. A pre- and post-crisis screening. Brussels: Centre for European Policy Studies (with a contribution from Llewellyn, D. T.).
Ayadi, R., Arbak, E., & De Groen, W. P. (2012). Regulation of European banks and business models: Towards a new paradigm? Brussels: Centre for European Policy Studies (with a contribution from Llewellyn, D. T.).
Bank of Italy. (2010). Annual report 2009. Rome: Bank of Italy.
Bank of Italy. (2011). Annual report 2010. Rome: Bank of Italy.
Bank of Italy. (2012a). Annual report 2011. Rome: Bank of Italy.
Bank of Italy. (2012b, July). Geographical breakdown of credit supply and demand. Bank of Italy, Regional Economies, 23.
Bank of Italy. (2013a). Annual report 2012. Rome: Bank of Italy.
Bank of Italy. (2013b, July). Geographical breakdown of credit supply and demand. Bank of Italy, Regional Economies, 22.
Berg, J., Van Rixtel, A., Ferrando, A., De Bondt, G., & Scopel, S. (2005, February). The bank lending survey for the Euro Area (Occasional Paper Series, 23). European Central Bank.
Bofondi, M., Carpinelli, L., & Sette, E. (2013, April). Credit supply during a sovereign debt crisis (Working Papers, 909). Bank of Italy.
Bonaccorsi di Patti, E., & Sette, E. (2012, January). Bank balance sheets and the transmission of financial shocks to borrowers: Evidence from the 2007–2008 crisis (Working Papers, 848). Bank of Italy.
Brugnoni, G. C. (2014). Creditoallaclientela e caratteristiche di fondo del modello di intermediazione delle banche italiane: evidenze empiriche per dimensione e categoria giuridica di banca tra il 2008 e il 2012 [Loans to customers and main intermediation model features of Italian banks: empirical evidence by bank size and juridical connotation between 2008 and 2012]. Ph.D. Dissertation, Sapienza University of Rome.
Chiaramonte, L., Poli, F., & Oriani, M. (2013). On the relationship between bank business models and financial stability: Evidence from the financial crisis in OECD countries. In J. Falzoned (Ed.), Bank stability, Sovereign debt and derivatives, Palgrave Macmillan Studies in Banking and Financial Institutions (pp. 7–30). Basingstoke: Palgrave Macmillan.
Cosma, S., & Gualandri, E. (2014). Crisi del debito sovrano e modello di intermediazione delle banche italiane [The sovereign debt crisis: The impact on the intermediation model of Italian banks]. Bancaria, 2, 48–60.
De Bonis, R., Nuzzo, G., & Stacchini, M. (2014). Andamenti e determinanti del credito nell’area dell’euro [Lending in the Euro Area: trends and determinant factors]. In A. Zazzaro (Ed.), Le banche e il credito alle imprese durante la crisi [Banks and lending to firms during the crisis] (pp. 63–96). Il Mulino: Bologna.
De Mitri, S., Gobbi, G., & Sette, E. (2010, September). Relationship lending in a financial turmoil (Working Papers, 772). Bank of Italy.
Del Giovane, P., Eramo, G., & Nobili, A. (2010, June). Disentangling demand and supply in credit developments: a survey-based analysis for Italy (Working Papers, 764). Bank of Italy.
Del Giovane, P., Eramo, G., & Nobili, A. (2011). Disentangling demand and supply in credit developments: a survey-based analysis for Italy. Journal of Banking & Finance, 35(10), 2719–2732.
Del Giovane, P., Nobili, A., & Signoretti, F. M. (2013, November). Supply tightening or lack of demand? An analysis of credit developments during the Lehman Brothers and the sovereign debt crises (Working Papers, 942). Bank of Italy.
Di Battista, M. L., & Nieri, L. (2011). Un’indagine sulle differenze nelle politiche del credito delle banche italiane nella recente crisi finanziaria [Lending policies in Italian banks during the financial crisis]. Bancaria, 3, 11–19.
Di Battista, M. L., & Nieri, L. (2012). Crisi finanziaria e politiche creditizie delle banche in Italia: Un aggiornamento [Financial crisis and lending policies in Italian banks: An update]. Osservatorio Monetario, Associazione per lo Sviluppo degli Studi di Banca e Borsa (ASSBB), 41–50.
Di Battista, M. L., Nieri, L., & Patarnello, A. (2010). Gli effetti della crisi sull’offerta di credito da parte delle banche [Effects of the crisis on the lending supply by Italian banks], Osservatorio Monetario, Associazione per lo Sviluppo degli Studi di Banca e Borsa (ASSBB), 1, 42-56.
European Central Bank. (2003). A bank lending survey for the euro area [pdf]. Accessed January 3, 2016, from https://www.ecb.europa.eu/pub/pdf/other/pp65_75_mb200304en.pdf
Felici R., Manzoli, E., & Pico, R. (2012, July). La crisi e le famiglie italiane: un’analisi microeconomica dei contratti di mutuo [Crisis and Italian households: A microeconomic analysis of mortgage contracts] (Occasional Papers, 125). Bank of Italy.
Gambacorta, L., & Marques-Ibanez, D. (2011, May). The bank lending channel. Lessons from the crisis (Working Paper series, 1335). European Central Bank.
Gambacorta, L., & Mistrulli, P. E. (2014). Bank heterogeneity and interest rate setting: What lessons have we learned since Lehman Brothers? Journal of Money, Credit and Banking, 46(4), 753–778.
Kapan, T., & Minoiu, C. (2013, May). Balance sheet strength and bank lending during the global financial crisis (Working Paper, WP/13/102). International Monetary Fund.
Miani, C., Nicoletti, G., Notarpietro, A., & Pisani, M. (2012, September). Banks’ balance sheets and the macroeconomy in the Bank of Italy quarterly model (Occasional Papers, 135). Bank of Italy.
Morelli, P., Pittaluga, G. B., and Seghezza, E., 2013. Credit supply and the rise in sovereign debt risk in the eurozone. In J. Falzon (Ed.), Bank stability, sovereign debt and derivatives, Palgrave Macmillan Studies in Banking and Financial Institutions (pp. 93–114). Basingstoke: Palgrave Macmillan.
Mundlak, Y. (1978). On the pooling of time series and cross section data. Econometrica, 46(1), 69–85.
Panetta, F., & Signoretti, F. M. (2010, April). Domanda e offerta di credito in Italia durante la crisi finanziaria [Credit demand and supply in Italy during the financial crisis] (Occasional Papers, 63). Bank of Italy.
Tutino, F., Colasimone, C., & Brugnoni, G. C. (2013). Credit development, quality deterioration and intermediation model: does bank size matter? Evidence from Italy between 2006 and 2010 financial crisis. In J. Falzon (Ed.), Bank stability, sovereign debt and derivatives, Palgrave Macmillan Studies in Banking and Financial Institutions (pp. 57–92). Basingstoke: Palgrave Macmillan.
Tutino, F., Colasimone, C., Brugnoni, G. C., and Riccetti, L., 2014. Intermediation model, bank size and lending to customers: is there a significant relationship? Evidence from Italy between 2008 and 2011. In T. Lindblom, S. Sjögren & M. Willesson (Eds.), Governance, regulation and bank stability, Palgrave Macmillan Studies in Banking and Financial Institutions (pp. 201–241). Basingstoke: Palgrave Macmillan.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2017 Springer International Publishing AG
About this paper
Cite this paper
Tutino, F., Brugnoni, G.C., Colasimone, C., Riccetti, L. (2017). The Determinants of Lending to Customers: Evidence from Italy Between 2008 and 2012. In: Bilgin, M., Danis, H., Demir, E., Can, U. (eds) Empirical Studies on Economics of Innovation, Public Economics and Management . Eurasian Studies in Business and Economics, vol 6. Springer, Cham. https://doi.org/10.1007/978-3-319-50164-2_4
Download citation
DOI: https://doi.org/10.1007/978-3-319-50164-2_4
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-50163-5
Online ISBN: 978-3-319-50164-2
eBook Packages: Business and ManagementBusiness and Management (R0)