Using ABC Costing and Measuring Loan Profitability at the Regional Bank

• In Event: Breakfast with Roundtable Forum Session
  In Paper Session: Research Roundtable Forum

Abstract

Commercial banking is a very competitive industry, especially during deprived economic conditions as this country has seen for several years. Banks need to find a way to accurately track their costs associated with each step of the commercial loan making process in order to determine whether or not the rates they charge their customers will result in a profit. Activity-based costing (ABC) can provide banks a more accurate determination and understanding of the cost and profitability for each loan they process, particularly regarding commercial loans.

Authors

• Mehmet C Kocakulah, University of Southern Indiana

• David Austill, Union University