Bank Loan Pricing in the Asia‐Pacific Region

Abstract

This study examines bank practices of corporate loan pricing in the Asia‐Pacific region. We find that the all‐in‐spread for loans (mostly term loans with longer maturities) in the Asia‐Pacific region are significantly smaller than those in the US. In addition, foreign banks tend to price their loans favorably in the Asia‐Pacific region, while foreign banks in the US have a higher loan spread. This finding indicates that foreign banks foster more competitive loan pricing in the Asia‐Pacific region, while foreign banks in the US seem to experience a competitive disadvantage compared to domestic lenders.

Citation

Chotigeat, T., Harjoto, M.A. and Yi, H. (2009), "Bank Loan Pricing in the Asia‐Pacific Region", Multinational Business Review, Vol. 17 No. 3, pp. 49-70. https://doi.org/10.1108/1525383X200900017