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Explaining the first effects of Covid-19 on Greek banks’ profitability

Author

Listed:
  • Barkas Panagiotis
  • Kounadeas Theodoros
  • Spatharakis Nikolaos Dimitrios

Abstract

The present paper studies the profitability dynamics of systemic Greek banks. By deploying an econometric methodology based on multiple linear regression analysis, we empirically investigate the drivers of banks’ return on assets between 2008 and 2020. We also shed light on the first effects of Covid-19 on banks. Examining the effects various macroeconomic, regulatory and financial factors, we find that public debt developments, including Greek debt restructuring, and banks’ provisions for credit losses had a negative effect on banks profitability. Besides, we testify that banks' capital adequacy and the size of liabilities of financial institutions towards their customers strengthened chances of increased bank profitability. We discuss the implications of our empirical findings in light of macroeconomic, regulatory and financial developments in Greece and the EU.

Suggested Citation

  • Barkas Panagiotis & Kounadeas Theodoros & Spatharakis Nikolaos Dimitrios, 2023. "Explaining the first effects of Covid-19 on Greek banks’ profitability," Bulletin of Applied Economics, Risk Market Journals, vol. 10(2), pages 67-88.
    • Handle: RePEc:rmk:rmkbae:v:10:y:2023:i:2:p:67-88
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    References listed on IDEAS

    as
    1. Kanas, Angelos & Vasiliou, Dimitrios & Eriotis, Nikolaos, 2012. "Revisiting bank profitability: A semi-parametric approach," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 22(4), pages 990-1005.
    2. Elnahass, Marwa & Trinh, Vu Quang & Li, Teng, 2021. "Global banking stability in the shadow of Covid-19 outbreak," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 72(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Systemic Banks; Profitability; Greece; ROA; Debt Crisis; Covid-19; Financial Analysis; Financial Ratios.;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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