This paper examines which business choices are more likely to increase the profitability and distance to distress of banks, and whether changing business model pays off. We find that the profitability and distance to distress increase with the use of customer deposits and equity, and decrease with size; also, the top performers tend to have a high relationship banking orientation and/or operate a retail focused business model. Furthermore, we document that income diversification only bears a positive impact on the distance to distress of banks highly focused on relationship banking, and size only bears a negative effect on the profitability of these banks as well; additionally, only banks with a low relationship banking orientation significantly benefit from customer deposits. With respect to the effects of business model changes, we find that shifts from the retail diversified funding model to either the retail focused or the large diversified models improve profitability in the medium term. Finally, we find evidence that large diversified banks benefited from internal capital markets during the twin financial crisis by tapping into low-cost funding from subsidiaries. Our results are robust to changes to our baseline model that account for endogeneity and persistency issues.

本文探讨了哪些业务选择更有可能增加银行的盈利能力和距离困境的距离，以及改变业务模式是否会带来回报。我们发现盈利能力和陷入困境的距离随着客户存款和股权的使用而增加，并随着规模的增加而减少；此外，表现最好的往往具有高度的关系银行导向和/或经营以零售为重点的商业模式。此外，我们记录到，收入多元化仅对高度关注关系银行的银行的困境距离产生积极影响，规模也仅对这些银行的盈利能力产生负面影响；此外，只有关系银行业务导向性较低的银行才能从客户存款中显着受益。关于商业模式变化的影响，我们发现，从零售多元化融资模式转变为专注于零售或大型多元化的融资模式可提高中期盈利能力。最后，我们发现有证据表明，在双重金融危机期间，大型多元化银行通过利用子公司的低成本资金从内部资本市场中受益。我们的结果对于我们的基线模型的变化是稳健的，这些变化说明了内生性和持久性问题。