Loan Loss Provisioning by International Banks: Estimation, Determinants and Evidence

Posted: 14 May 2000

See all articles by Vivien A. Beattie

Vivien A. Beattie

Lancaster University - Lancaster University Management School

Peter Casson

University of Southampton - School of Management

Richard Dale

University of Southampton

George McKenzie

University of Southampton - School of Management

Charles Sutcliffe

University of Reading - ICMA Centre

Michael Turner

University of Southampton - School of Management

Abstract

In recent years loan loss provisions have become the major determinant of bank profitability levels and have had a significant impact upon capital adequacy measures. Given the implications of such matters for the overall stability of the financial system, it is important to understand the determinants of bank loan losses and bank loan loss provisioning policies. This article draws together the piecemeal and diverse literature concerning bank loan loss provisioning. The main conceptual issues considered are the fundamental nature of loan loss provisions, the alternative methods used to estimate loan losses and the determinants of loan losses and associated provisioning policies. The available empirical evidence is also reviewed.

JEL Classification: G21

Suggested Citation

Beattie, Vivien and Casson, Peter and Dale, Richard and McKenzie, George and Sutcliffe, Charles M. and Turner, Michael, Loan Loss Provisioning by International Banks: Estimation, Determinants and Evidence. Available at SSRN: https://ssrn.com/abstract=6216

Vivien Beattie

Lancaster University - Lancaster University Management School ( email )

Bailrigg
Lancaster, LA1 4YX
United Kingdom

Peter Casson

University of Southampton - School of Management ( email )

Highfield
Southampton SP10 1BJ, Hampshire SO17 1BJ
United Kingdom
44-01703-593966 (Phone)
44-01703-593844 (Fax)

Richard Dale

University of Southampton ( email )

Highfield
Southampton SP10 1BJ, Hampshire SO17 1BJ
United Kingdom
(+44) 01703 593966 (Phone)
(+44) 01703 593844 (Fax)

George McKenzie

University of Southampton - School of Management

Highfield
Southampton SP10 1BJ, Hampshire SO17 1BJ
United Kingdom
+44 703 592540 (Phone)

Charles M. Sutcliffe (Contact Author)

University of Reading - ICMA Centre ( email )

Whiteknights Park
P.O. Box 242
Reading RG6 6BA
United Kingdom

Michael Turner

University of Southampton - School of Management

Highfield
Southampton S017 1BJ, Hampshire SO17 1BJ
United Kingdom

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