| Abstrakt: |
Frame of the research: Inspired by the stakeholder value model more than the shareholder value model, cooperative credit banks (CCBs) are enterprises that aim to generate profits to sustain their business for the benefit of the community, rather than profit-making alone being the overriding goal guiding their actions. (Ayadi et al., 2010). Purpose of the paper: This paper seeks to investigate whether the loan pricing decisions adopted by mutual banks are consistent with their objectives in terms of mutuality. We focus on how banks take into account the actual riskiness of borrowers in their lending activities, and hypothesise that the evidence of cross-subsidisation, in terms of interest rates charged, between high- and low-quality borrowers is consistent with the nature and objectives of cooperative credit banks. Methodology: The investigation into lending behaviour focused on an examination of pricing policies and was conducted in the form of an empirical analysis concentrating on the comparison between the interest rates applied in 2020 by four Italian CCBs working in the same geographical area, and the theoretical interest rates, consistent with the risk level of the counterparties. Findings: The results show that the pricing adopted by the cooperative banks that were examined is partially decoupled from the risk level of the loan granted to the counterparty. The application of less favourable conditions to the best borrowers and more favourable conditions to the worst borrowers constitutes a credit pricing system that can be defined as mutual. Research limits: Like all such work based on an analysis of case studies, the research has limitations which are a consequence of the potential lack of representativeness of the phenomena observed. This concerns the number of intermediaries in general, and, specifically, the technical form of lending (opening a line of credit within a current account), which does not cover all types of credit line relationships, and the observation period, which is limited to the year 2020. Practical implications: The setting of rates on loans to customers is an effective lever that cooperative banks can use from a strategic point of view, in the context of mutual credit management. Originality of the paper: By using proprietary data from the banks examined, the work represents the first attempt to understand whether the credit policy of cooperative credit banks, which manifests itself most notably in the setting of lending rates, is consistent with their cooperative nature and with the values of solidarity on which their actions have historically been based. [ABSTRACT FROM AUTHOR] |
