Why do Banks Join Loan Syndications?

The Case of Participant Banks

Yener Altunbas, Alper Kara

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

This paper examines the determinants of banks' involvement in loan syndication using the financial information of 847 participant banks. The results indicate that participant banks join loan syndications when their capital levels are sufficient enough to support the extra risk taken. Banks with lower net interest margin are found to choose syndicated lending as a way of boosting their margins. The motivation of risk diversification through participating in loan syndications is also confirmed.
Original languageEnglish
Pages (from-to)1063-1074
Number of pages12
JournalService Industries Journal
Volume31
Issue number7
DOIs
Publication statusPublished - 2011
Externally publishedYes

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Loans
Syndication
Join
Margin
Boosting
Financial information
Risk diversification
Lending
Interest margin

Cite this

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Why do Banks Join Loan Syndications? The Case of Participant Banks. / Altunbas, Yener; Kara, Alper.

In: Service Industries Journal, Vol. 31, No. 7, 2011, p. 1063-1074.

Research output: Contribution to journalArticle

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