Depopulation in provincial areas has recently caused a decline in regional economies in Japan. Japanese regional banks have thus been advancing into areas outside their original operational bases, especially into major cities and urban regions. Since lending to areas outside the original operational base is inherently more uncertain (and increasing), such lending behavior is expected to significantly affect the credit risk of regional banks’ lending portfolios. In this paper, we analyze the extent to which the lending area (the local region, outside the local region or Tokyo) affects the credit risk of regional banks. By using credit data on five regional banks, we develop credit risk estimation models to analyze the effect of the characteristics of lending area. These analyses indicate that the lending area variables affect credit risk; default is less likely to occur outside the local region and in Tokyo; and the loss given default is smaller in the local region than elsewhere.

中文翻译：

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当银行冒险超越本土：对贷款表现的影响

近来，省级地区的人口减少导致日本的区域经济下滑。因此，日本地区性银行一直在向其原有业务基地以外的地区进军，尤其是向主要城市和城市地区进军。由于向原始业务基础之外的地区提供贷款本质上更加不确定（并且不断增加），因此预计此类贷款行为将显着影响区域银行贷款组合的信用风险。在本文中，我们分析了贷款区域（当地、当地以外或东京）对地区银行信用风险的影响程度。利用五家区域性银行的信用数据，建立信用风险估计模型，分析贷款区域特征的影响。这些分析表明，贷款领域变量影响信用风险；违约发生在当地以外和东京的可能性较小；并且本地区域的默认损失比其他地方要小。