Bank Ownership and Recovery in Corporate Liquidation Bankruptcies

ABSTRACT We offer the first empirical evidence on how bank ownership affects bank recovery in corporate liquidation bankruptcies, a central vehicle for resolving non‐performing loans. Using detailed bank‐creditor‐level data from Slovenia and employing multiple empirical approaches, we document a clear foreign‐ownership premium: foreign banks, whether operating domestically or abroad, achieve higher recoveries than their state‐owned peers, while domestic private banks show no consistent advantage. This premium reflects foreign banks' more active engagement during liquidation proceedings, not ex‐ante client selection or loan contracting. Our findings highlight an overlooked channel through which bank ownership structure can shape banking‐sector stability and resilience.