| dc.description.abstract | In recent ten years, the markets in the whole world are unstable. Credit card
and cash card crisis in Taiwan as well as Lehman brother scandal contributed
to the low profit and low interest rate in financial market. It further lowered
the profits of the banks, including from the traditional saving-loan interest rate
spread. In addition, due to the worse financial environment, the highly profitable
or potential businesses have better ability to bargain. It makes the banks have
lower profits in Corporation Finance. On the other hands, since the individuals
don’t have as good ability to bargain as the businesses, many banks thus turn to
put more emphasis on Consumer Finance.
Traditional consumer financial products are variable, including mortgages,
car loans, credit cards, credit loans and other consumer loans. In terms of the
service scope and the loan value, the traditional mortgage still ranks first.
However, to look for higher profits, the subordinated mortgage may be a better
choice for the higher interest rate spread. The subordinated mortgage is different
from the traditional mortgage. It can combine the line of credit, making the
capital use more flexible. Although the subordinated mortgage has already existed
in Taiwan market for many years, it is still not that common. The main reason is
that the banks don’t have good risk control analysis for it. In addition, the service
part and the convenience part still have much to be improved.
Traditional financial textbooks think that high returns come with
high risks. This paper mainly investigated the potential risk factors of the
subordinated mortgage and tried to find out which one significantly influenced
the subordinated mortgage. Trying to control these risks, the bank might maintain
reasonable profit levels. | en_US |