Loan growth and interest income of Italian listed banks: a multivariate analysis

This study focuses on the relationship between gross loans and the related reserves for impaired loans of the banks listed on the Italian Stock Exchange between 2005 and 2014. In our empirical research, we analysed the trend of those items and we also concentrated on the impact of net loans on total assets. Afterwards we monitored the correlation between loan growth, bank solvency, loan losses and the interest income of each bank in order to analyse the impact on the profitability of the banks and evaluate the effects of a specific loan policy. Finally, we concentrated on the multivariate linear regression whose dependent variable is the variation of the interest income between 2013 and 2014. Our research raises important issues on the necessary policy supervision in terms of risk management because, thanks to our analysis, we underline the strategic role of loan growth and its impact on the economic profitability of Italian listed banks.