Bank Business Model and the Branching Strategies
Authors: Mamoru Nagano (Seikei University)
Title: Bank Business Model and the Branching Strategies
Abstract: This paper investigates the relationship between bank business model choice and the bank risk tolerance. Our conclusion is that a bank business model choice does not solely influence the bank risk by itself, but the choice of branch deployment strategy moderates the relationship between bank business model choice and the performance. Our empirical evidence suggests that a personal loan-oriented business mitigates the bank risk when the bank has wide geographical branch channels across regions. A bank corporate loan-oriented and the non-interest income oriented business conversely increase the bank risk when the branches geographically does not concentrate in the bank home market.