Since 2014
Challenges of Banking Profitability in Eurozone Countries: Analysis of Specific and Macroeconomic Factors
Journal of Contemporary Issues in Economics and Business
View Archive Info| Field | Value | |
| Title |
Challenges of Banking Profitability in Eurozone Countries: Analysis of Specific and Macroeconomic Factors
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| Creator |
Durguti, Esat A.; University of Mitrovica, Economic Faculty, Kosovo
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| Subject |
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bank profitability, regression analysis, panel data, EU countries |
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| Description |
Numerous factors affect the rate of return that a financial institution earns.Some of these factors include external forces that shape earnings performanceand internal elements found in each financial institution. Policy implicationsare determined by the type of explanation and should be taken seriously. Thispaper classifies determinants of bank profitability as well as reviews existingliterature on bank performance. The second section of this study quantifies howexternal factors and internal determinants have influenced the profitability ofEU banks. This paper constructs fixed-effect models and Ordinary Least Squares(OLS), which sheds new light on understanding various factors influencing howthe EU banking industry performs. The observation period was from 2012 to2019, and the findings revealed that EU bank profitability is influenced by bothexternal macroeconomic environment and management decisions. The resultsof this study suggest that equity to assets ratio (EA), Gap ratio, and GDP have apositive impact on bank profitability, while the loan to assets ratio (LA) and theprovision for loan losses to total loans ratio (PLL/TL) hurt EU bank profitability.The empirical findings are consistent with the expected results, although, theyare different from those of studies that investigated the structure-performancerelationship of EU banks because they found that market share and concentrationhave a positive effect on bank profitability.
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| Publisher |
Faculty of Economics and Business
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| Contributor |
—
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| Date |
2020-12-15
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion — |
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| Format |
application/pdf
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| Identifier |
http://ng-epf.si/index.php/ngoe/article/view/244
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| Source |
Naše gospodarstvo/Our economy; Vol 66, No 4 (2020); 1-10
2385-8052 0547-3101 |
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| Language |
eng
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| Relation |
http://ng-epf.si/index.php/ngoe/article/view/244/217
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| Rights |
Copyright (c) 2020 Naše gospodarstvo/Our economy
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