Sustainable Banks - Prudent and Profitable

29 Pages Posted: 18 Sep 2015

See all articles by Angelos A. Antzoulatos

Angelos A. Antzoulatos

University of Piraeus - Department of Banking and Financial Management

Thomas Syrmos

University of Piraeus - Department of Banking and Financial Management

Chris Tsoumas

Hellenic Open University

Date Written: September 16, 2015

Abstract

We explore the observable characteristics of sustainable banks, using a hand-collected dataset comprising of all public US bank holding companies, for the period 1999-2011. Our results indicate that sustainable banks are characterized by superior performance, more prudent behavior and a business model oriented towards financing industry and commerce. Specifically, they exhibit higher ROE and ROA, and have a higher market-to-book ratio which cannot be entirely accounted for by the higher ROE. They also have lower ratios of risk-weighted assets to total assets and finance more of their loans with deposits. Lastly, they have higher ratios of commercial and industrial loans to total loans. Overall, our results are consistent with the view that sustainable banks actively try to improve the risk-return profile of their whole operations, taking advantage of the benefits sustainability confers.

Keywords: Banking, Corporate Social Responsibility (CSR), Socially Responsible Investing (CSI), Sustainability

JEL Classification: G10, G21, M14

Suggested Citation

Antzoulatos, Angelos A. and Syrmos, Thomas and Tsoumas, Chris, Sustainable Banks - Prudent and Profitable (September 16, 2015). Available at SSRN: https://ssrn.com/abstract=2661418 or http://dx.doi.org/10.2139/ssrn.2661418

Angelos A. Antzoulatos (Contact Author)

University of Piraeus - Department of Banking and Financial Management ( email )

80 Karaoli & Dimitriou Str.
18534 Piraeus, 185 34 -GR
Greece

Thomas Syrmos

University of Piraeus - Department of Banking and Financial Management ( email )

80 Karaoli & Dimitriou Str.
18534 Piraeus, 185 34 -GR
Greece

Chris Tsoumas

Hellenic Open University ( email )

Parodos Aristotelous 18
26335 Patra
Greece

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