Empirical Analysis of Bank Performance in PIIGS before and during Financial Crisis

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2016 (EN)
Empirical Analysis of Bank Performance in PIIGS before and during Financial Crisis (EN)

Zarouchas, Konstantinos (EN)

School of Economics, Business Administration and Legal Studies, MSc in Banking and Finance (EL)
Sikalidis, Alexandros (EN)
Leventis, Stergios (EN)
Grose, Christos (EN)

The primary purpose of this study is to investigate the effects of the factors that determine the performance of banks operating in Portugal, Italy, Ireland, Spain and Greece (PIIGS), over the years 2004-2013. In our analysis, we use Return on Average Assets (ROAA), as a function of internal (bank-specific) and external (macroeconomic) determinants, so as to measure bank profitability. Initially, we create a balanced panel dataset of 46 listed and unlisted banks (excluding central banks) over a time period of ten years (2004-2013), for our model. We assess the effect of the recent global financial crisis by splitting the entire period into two equal sub-periods: the pre-crisis period (2004-2008) and the crisis and post-crisis period (2009-2013). Our findings signify that the influence of the investigated variables on bank performance is not always in accordance with our expectations. Specifically, the equity to total assets ratio has a significantly positive effect on ROAA over the pre-crisis period, whereas the cost to income ratio has a significantly negative impact over the crisis and post-crisis period. On the side of macroeconomic characteristics, we notice that only GDP growth rate presents a significant association with bank performance. In particular, there is a significantly positive relation between GDP growth rate and ROAA for the crisis and post-crisis period. (EN)


pre-crisis (EN)
post-crisis (EN)
bank performance (EN)

Διεθνές Πανεπιστήμιο της Ελλάδος (EL)
International Hellenic University (EN)



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