Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/185655 
Year of Publication: 
2017
Citation: 
[Journal:] International Journal of Business and Economic Sciences Applied Research (IJBESAR) [ISSN:] 2408-0101 [Volume:] 10 [Issue:] 1 [Publisher:] Eastern Macedonia and Thrace Institute of Technology [Place:] Kavala [Year:] 2017 [Pages:] 13-22
Publisher: 
Eastern Macedonia and Thrace Institute of Technology, Kavala
Abstract: 
Purpose: The purpose of this paper is to investigate the external factors that influence the profitability of a typical Greek systemic bank over the period 2001-2014. Design/Methodology/Approach: A conceptual framework incorporating two fundamental groups of constructs, namely, macroeconomic forces and industry related factors, was developed. Two constructs were examined in the former: GDP growth rate and unemployment rate, whilst two attributes were explored in the latter; the bank's market share, both in terms of deposits and in terms of assets, and the banking market growth, also both in terms of the market's total assets and total deposits. In order to isolate the effects of the ongoing financial crisis, the research was undertaken for two periods, firstly 2001 to 2014 and secondly, the period 2001-2011, which excluded the deep recession. Consequently, multiple regression analysis was conducted and linear models were specified by means of OLS. Findings: The empirical analysis revealed that both macroeconomic forces and industryrelated factors affect bank profitability. As far as the macroeconomic factors are concerned, unemployment rate has a negative impact, whereas the GDP growth rate has a positive impact on bank profitability. The industry-related factors, rate of growth of the industry's deposits and bank's assets market share have a positive impact on the financial performance of the bank. Finally, the rate of growth of the industry's assets and the bank's deposits market share have a negative effect on bank profitability. Originality/Value: This study reveals the mechanism determining bank profitability over a recent period that includes the financial crisis. Moreover, understanding the impact of macroeconomic forces as well as industry related attributes on bank profitability may enable banks to focus on the most critical factors in their decision process.
Subjects: 
Greek banking
bank profitability
determinants of profitability
financial crisis
decision process
JEL: 
G01
G21
L2
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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