RELATIONSHIP BETWEEN LOAN GROWTH AND BANK VALUATION

Author: 
Peer reviewed: 
No, item is not peer reviewed.
Scholarly level: 
Graduate student (Masters)
Date created: 
2019-12
Keywords: 
Bank
Loan growth
Valuation
Abstract: 

This paper examines the relationship between loan growth and bank valuation. The sample consists of data on publicly traded banks in the US from 2004 to 2017. Using the whole sample, we find that faster loan growth is associated with higher bank valuations. Then, we divide the whole sample into three periods, and find that this result holds for every period. Finally, we divide the whole sample by both time periods and bank size. We find that, for the first two periods, faster loan growth is associated with higher valuations at small and medium banks, but not at large banks. For the last period, however, faster loan growth is associated with higher valuations at large banks, but not at small and medium banks. We discuss the possible explanations for our findings.

Description: 

MSc in Finance Project-Simon Fraser University.

Language: 
English
Document type: 
Graduating extended essay / Research project
Rights: 
Copyright remains with the author.
File(s): 
Supervisor(s): 
Jijun Niu
Department: 
Beedie School of Business-Segal Graduate School
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