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Determinants of bank profitability before, during and after the financial crisis

Determinants of bank profitability before, during and after the financial crisis
Determinants of bank profitability before, during and after the financial crisis
This paper reports the results of an investigation into the relationship between bank-specific, macroeconomic factors and bank profitability before (1999-2006), during (2007-2009) and after (2010-2013) the financial crisis. The results indicate that banks sustained profitable performance even during the financial crisis despite fall in loans and increasing bank liquidity. Panel data analyses results show that there is a significant relationship between
bank-specific determinants (size, cost management, and liquidity) and bank profitability (ROA) before, during and after the financial crisis. However, the relationships between other bank-specific (capital strength, credit risk, and market power), macroeconomic (GDP and inflation) determinants are sensitive to both period of analysis (before, during and after the financial crisis) and bank profitability measure used (ROA or NIM). Overall, these results suggest that the financial crisis did not affect the relationships between some bank-specific
determinants and bank profitability.

Keywords: Banks; Profitability; International Business; Economic Community of West African States (ECOWAS); Macroeconomic environment; Financial crisis.
JEL: C23, E44, F20, G01, G21, L23.
1743-9132
Adelopo, Ismail
9d8bad60-e894-4853-9870-a1264325b72b
Lloydking, Robert
d8996a97-8d5e-4a00-bfb3-1fef704497b3
Tauringana, Venancio
27634458-b041-4bc1-94da-3e031d777e4f
Adelopo, Ismail
9d8bad60-e894-4853-9870-a1264325b72b
Lloydking, Robert
d8996a97-8d5e-4a00-bfb3-1fef704497b3
Tauringana, Venancio
27634458-b041-4bc1-94da-3e031d777e4f

Adelopo, Ismail, Lloydking, Robert and Tauringana, Venancio (2017) Determinants of bank profitability before, during and after the financial crisis. International Journal of Managerial Finance. (In Press)

Record type: Article

Abstract

This paper reports the results of an investigation into the relationship between bank-specific, macroeconomic factors and bank profitability before (1999-2006), during (2007-2009) and after (2010-2013) the financial crisis. The results indicate that banks sustained profitable performance even during the financial crisis despite fall in loans and increasing bank liquidity. Panel data analyses results show that there is a significant relationship between
bank-specific determinants (size, cost management, and liquidity) and bank profitability (ROA) before, during and after the financial crisis. However, the relationships between other bank-specific (capital strength, credit risk, and market power), macroeconomic (GDP and inflation) determinants are sensitive to both period of analysis (before, during and after the financial crisis) and bank profitability measure used (ROA or NIM). Overall, these results suggest that the financial crisis did not affect the relationships between some bank-specific
determinants and bank profitability.

Keywords: Banks; Profitability; International Business; Economic Community of West African States (ECOWAS); Macroeconomic environment; Financial crisis.
JEL: C23, E44, F20, G01, G21, L23.

Text
Adelepo, Lloyking and Tauringana 2017 - Author's Original
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IJMF- Manuscript Final Adelopo, Lloydking and Tauringana - Accepted Manuscript
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More information

Accepted/In Press date: 19 November 2017

Identifiers

Local EPrints ID: 416375
URI: https://eprints.soton.ac.uk/id/eprint/416375
ISSN: 1743-9132
PURE UUID: 486c5eed-a7d5-46a0-a072-cade8f07e20a
ORCID for Venancio Tauringana: ORCID iD orcid.org/0000-0002-1433-324X

Catalogue record

Date deposited: 14 Dec 2017 17:30
Last modified: 14 Mar 2019 01:39

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