Human Mobility, Relationship Banking, and Bank Performance: Evidence from the Pandemic

40 Pages Posted: 13 Sep 2022 Last revised: 13 Sep 2022

See all articles by S. Mehmet Ozsoy

S. Mehmet Ozsoy

Ozyegin University

Mehdi Rasteh

John Molson School of Business, Concordia University

Erkan Yönder

John Molson School of Business, Concordia University

Date Written: October 16, 2020

Abstract

The current pandemic has been a human mobility shock to economic activity. Using the geographic locations of bank branches, we calculate a bank's exposure to mobility declines and evaluate its impact on performance. We find that U.S. banks' stability, profitability, and asset quality are distorted by their exposure to mobility declines. There is also a statistically significant increase in non-performing consumer loans, residential, and commercial mortgages, while no impact on commercial loans. Our findings also demonstrate that relationship banking has been an insulating factor for banks against the negative impacts of mobility reductions.

Keywords: COVID-19, mobility, bank stability, non-performing loans, relationship banking

JEL Classification: G21, I18

Suggested Citation

Ozsoy, S. Mehmet and Rasteh, Mehdi and Yönder, Erkan, Human Mobility, Relationship Banking, and Bank Performance: Evidence from the Pandemic (October 16, 2020). Available at SSRN: https://ssrn.com/abstract=3713526 or http://dx.doi.org/10.2139/ssrn.3713526

S. Mehmet Ozsoy

Ozyegin University ( email )

Nisantepe Mah. Orman Sok. No:34-36
Alemdag – Cekmekoy
Istanbul, 34794
Turkey

Mehdi Rasteh

John Molson School of Business, Concordia University ( email )

Montreal
Canada

Erkan Yönder (Contact Author)

John Molson School of Business, Concordia University ( email )

Montreal
Canada

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