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Banking Profitability: Evolution and Research Trends

Author

Listed:
  • Francisco Sousa

    (Higher Institute of Accounting and Administration of Aveiro, University of Aveiro, 3810-902 Aveiro, Portugal)

  • Luís Almeida

    (Higher Institute of Accounting and Administration of Aveiro, University of Aveiro, 3810-902 Aveiro, Portugal
    GOVCOPP Unit Research, University of Aveiro, 3810-902 Aveiro, Portugal
    The Centre for Organisational and Social Studies of the Polytechnic of Porto (CEOS.PP), ISCAP, Polytechnic of Porto, 4465-004 Porto, Portugal)

Abstract

This study aims to map the scientific knowledge of bank profitability and its determinants. It identifies trends and gaps in existing research through a bibliometric analysis. To this end, 634 documents published in the Web of Science database over the last 54 years were analyzed using the bibliometric package. The results indicate an increase in the volume of publications following the 2008 financial crisis, focusing on analyzing the factors influencing bank profitability and economic growth. The Journal of Banking and Finance is the preeminent publication in this field. The literature reviewed shows that bank profitability depends on internal factors (size, credit risk, liquidity, efficiency, and management) and external factors (such as GDP, inflation, interest rates, and unemployment). In addition to the traditional determinants, the recent literature highlights the importance of innovation and technological factors such as digitalization, mobile banking, and electronic payments as relevant to bank profitability. ESG (environmental, social, and governance) and governance indicators, which are still emerging but have been extensively researched in companies, indicate a need for evidence in this area. This paper also provides relevant insights for the formulation of monetary policy and the strategic formulation of banks, helping managers and owners to improve bank performance. It also provides directions for future empirical studies and research collaborations in this field.

Suggested Citation

  • Francisco Sousa & Luís Almeida, 2025. "Banking Profitability: Evolution and Research Trends," IJFS, MDPI, vol. 13(3), pages 1-20, July.
    • Handle: RePEc:gam:jijfss:v:13:y:2025:i:3:p:139-:d:1712225
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    References listed on IDEAS

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    Cited by:

    1. NIYIBIZI François Xavier & Prof. GWAHULA Raphael & Dr. ABAYO Abdiel, 2026. "Operational Risk Management and Financial Performance: An Empirical Analysis of Cost Efficiency and Return on Assets," International Journal of Finance, CARI Journals Limited, vol. 11(3), pages 67-85.

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