The impacts of Small and Medium-sized Bank Loan on Bank's Equity Ratio and Performance in Korean Banking Industry

We analyzed the relationship between smalland medium-sized corporate bank loans and bank's equity ratio, as well as smalland medium-sized corporate bank loans and bank's performance in Korean banking industry. Using the data from the Bank of Korea and the Financial Supervisory Service, we made a panel data set, including small and medium corporate loan ratio, BIS ration, basic equity ratio, performance ratio, etc. We found a positively significant relationship between smalland medium-sized corporate loans and bank's equity ratio. There was a positive change of this relationship between the pre-financial crisis and post-financial crisis periods. In the post-financial crisis period, smalland medium-sized corporate bank loans had a significantly positive impact on the bank's equity ratio and bank's performance. We expect that these results will give new insights and contribute to the already-existing knowledge as well as to the Korean government institutions that are interested in the impact of smalland medium-sized corporate bank loans.