Artikel

Challenges of banking profitability in Eurozone countries: Analysis of specific and macroeconomic factors

Numerous factors affect the rate of return that a financial institution earns. Some of these factors include external forces that shape earnings performance and internal elements found in each financial institution. Policy implications are determined by the type of explanation and should be taken seriously. This paper classifies determinants of bank profitability as well as reviews existing literature on bank performance. The second section of this study quantifies how external factors and internal determinants have influenced the profitability of EU banks. This paper constructs fixed-effect models and Ordinary Least Squares (OLS), which sheds new light on understanding various factors influencing how the EU banking industry performs. The observation period was from 2012 to 2019, and the findings revealed that EU bank profitability is influenced by both external macroeconomic environment and management decisions. The results of this study suggest that equity to assets ratio (EA), Gap ratio, and GDP have a positive impact on bank profitability, while the loan to assets ratio (LA) and the provision for loan losses to total loans ratio (PLL/TL) hurt EU bank profitability. The empirical findings are consistent with the expected results, although, they are different from those of studies that investigated the structure-performance relationship of EU banks because they found that market share and concentration have a positive effect on bank profitability.

Sprache
Englisch

Erschienen in
Journal: Naše gospodarstvo / Our Economy ; ISSN: 2385-8052 ; Volume: 66 ; Year: 2020 ; Issue: 4 ; Pages: 1-10

Klassifikation
Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors
Bankruptcy; Liquidation
Thema
bank profitability
regression analysis
panel data
EU countries

Ereignis
Geistige Schöpfung
(wer)
Durguti, Esat Ali
Ereignis
Veröffentlichung
(wer)
Sciendo
(wo)
Warsaw
(wann)
2020

DOI
doi:10.2478/ngoe-2020-0019
Letzte Aktualisierung
20.09.2024, 08:21 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Artikel

Beteiligte

  • Durguti, Esat Ali
  • Sciendo

Entstanden

  • 2020

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