6533b851fe1ef96bd12a8f75
RESEARCH PRODUCT
Determinants of Banks’ Profitability: Evidence from EU 27 Banking Systems
Iulian IhnatovBogdan CapraruNicolae Petriasubject
Management efficiencyGeneral EngineeringDiversification (finance)Equity (finance)Energy Engineering and Power TechnologyFinancial systemMarket concentrationLiquidity riskmedia_common.cataloged_instancebank profitabilityProfitability indexBusinessEuropean UnionEuropean unionbanking systemmedia_commondescription
Abstract In this study we assess the main determinants of banks’ profitability in EU27 over the period 2004-2011. We split the factors that influence bank profitability in two large groups: bank-specific (internal) factors and industry specific and macroeconomic (external) factors. We consider as proxy for banks profitability the return on average assets (ROAA) and the return on average equity (ROAE). The empirical findings are consistent with the expected results. Credit and liquidity risk, management efficiency, the diversification of business, the market concentration/competition and the economic growth have influence on bank profitability, both on ROAA and ROAE. An interesting and valuable result is the positive influence of competition on bank profitability in EU27.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2015-01-01 | Procedia Economics and Finance |