How does loan portfolio diversification affect bank profitability?
Post by MSF Chula at Sunday, 31 January 2021 10:09 PM

This research paper examines the effect of loan portfolio diversification in term of business types and loan type on Thai commercial banks profitability. This also examines the shape of the relationship in these two variables. In addition, this paper investigates the effect of loan portfolio diversification and bank return in different economic conditions. The data sample comprises of 14 Thai commercial banks during of period 2009-2019. The panel data is used in this paper to study the relationship in the regression. Based on the analysis, the study find that diversification improve bank profitability. Furthermore, non-liner relationship with concave between diversification in term of loan type is found in the paper. Also, economic conditions have significantly impacted the bank return, while there is no relationship between diversification and bank profitability in different economic conditions.

Last updated at Sunday, 31 January 2021 10:09 PM