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Determinants of bank profitability before and during the crisis: Evidence from Switzerland

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Author Info

  • Dietrich, Andreas
  • Wanzenried, Gabrielle

Abstract

Using the GMM estimator technique described by Arellano and Bover (1995), this paper analyzes the profitability of 372 commercial banks in Switzerland over the period from 1999 to 2009. To evaluate the impact of the recent financial crisis, we separately consider the pre-crisis period, 1999-2006, and the crisis years of 2007-2009. Our profitability determinants include bank-specific characteristics as well as industry-specific and macroeconomic factors, some of which have not been considered in previous studies. The inclusion of these additional factors as well as the separate consideration of the crisis years allow us to gain new insights into what determines the profitability of commercial banks.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Financial Markets, Institutions and Money.

Volume (Year): 21 (2011)
Issue (Month): 3 (July)
Pages: 307-327

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Handle: RePEc:eee:intfin:v:21:y:2011:i:3:p:307-327

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Web page: http://www.elsevier.com/locate/intfin

Related research

Keywords: Banking profitability Macroeconomic impact on banking profitability Financial crisis Market structure Ownership;

References

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Citations

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Cited by:
  1. Harris, Oneil & Huerta, Daniel & Ngo, Thanh, 2013. "The impact of TARP on bank efficiency," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 24(C), pages 85-104.
  2. Adeline Saillard & Thomas Url, 2013. "Measuring and Testing Complementarity and Co-evolution in Financial Systems," WIFO Working Papers 457, WIFO.
  3. Sergio SANFILIPPO AZOFRA & Maria CANTERO SAIZ & Begona TORRE OLMO & Carlos LOPEZ GUTIERREZ, 2013. "Financial Crises, Concentration and Efficiency: Effects on Performance and Risk of Banks," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 63(6), pages 537-558, December.
  4. Muhamad Muda & Amir Shaharuddin & Abdelhakim Embaya, 2013. "Comparative Analysis of Profitability Determinants of Domestic and Foreign Islamic Banks in Malaysia," International Journal of Economics and Financial Issues, Econjournals, vol. 3(3), pages 559-569.
  5. Fredriksson, Antti & Moro, Andrea, 2014. "Bank–SMEs relationships and banks’ risk-adjusted profitability," Journal of Banking & Finance, Elsevier, vol. 41(C), pages 67-77.
  6. Malgorzata A. Olszak & Mateusz Pipieñ, . "Cross country linkages as determinants of procyclicality of loan loss provisions – empirical importance of SURE specification," Faculty of Management Working Paper Series, University of Warsaw, Faculty of Management.
  7. Hao Fang & Yang-Cheng Lu & Chi-Wei Su, 2013. "Impact of the Subprime Crisis on Commercial Banks’ Financial Performance," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(5), pages 593-614, September.
  8. Olszak, Małgorzata & Pipień, Mateusz & Kowalska, Iwona & Roszkowska, Sylwia, 2014. "What drives heterogeneity of loan loss provisions’ procyclicality in the EU?," MPRA Paper 56834, University Library of Munich, Germany.
  9. Sun, Jerry & Liu, Guoping, 2014. "Audit committees’ oversight of bank risk-taking," Journal of Banking & Finance, Elsevier, vol. 40(C), pages 376-387.
  10. Hoque, Hafiz, 2013. "From the credit crisis to the sovereign debt crisis: Determinants of share price performance of global banks," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 334-350.
  11. Angela Roman ‘Alexandru Ioan Cuza‘ University of Iasi & Adina Elena Danuletiu, 2013. "An Empirical Analysis Of The Determinants Of Bank Profitability In Romania," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(15), pages 23.
  12. Olszak, Małgorzata & Pipień, Mateusz, 2013. "Cross Country Linkages as Determinants of Procyclicality of Loan Loss Provisions – Empirical Importance of SURE Specification," MPRA Paper 53784, University Library of Munich, Germany.
  13. Alin Marius ANDRIES & Vasile COCRIS & Silviu Gabriel URSU, 2012. "Determinants Of Bank Performance In Cee Countries," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 10, pages 165-177, December.
  14. Tomola Marshal Obamuyi, 2013. "Determinants Of Banks’ Profitability In A Developing Economy: Evidence From Nigeria," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 4(2).
  15. Pichaphop Chalermchatvichien & Seksak Jumreornvong & Pornsit Jiraporn & Manohar Singh, 2014. "The Effect of Bank Ownership Concentration on Capital Adequacy, Liquidity, and Capital Stability," Journal of Financial Services Research, Springer, vol. 45(2), pages 219-240, April.

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