The Profitability of Bank-Borrower Relationships

Posted: 27 Sep 2004

Abstract

This paper investigates the profitability of relationship banking within the context of small business loans made by community banks. Theory implies that competition reduces the benefits of bank-borrower relationships, making relationship loans more risky and less profitable. I present evidence for community banks that is consonant with this implication.

Keywords: relationship lending, small business lending, community banks

JEL Classification: G21, G28

Suggested Citation

Ergungor, Ozgur Emre, The Profitability of Bank-Borrower Relationships. Journal of Financial Intermediation, Vol. 14, pp. 485-512, 2005. Available at SSRN: https://ssrn.com/abstract=595701

Ozgur Emre Ergungor (Contact Author)

affiliation not provided to SSRN

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