Analysis of Income and Profitability Indicators in Banking Sectors During the Period 1995 – 2009: Post-communist vs. OECD Countries

This article presents an analysis of income and profitability indicators for the banking sectors of six post-communist countries and compares them with a group of eighteen OECD countries without a “communist†past. The analysis focuses on five relative indicators (interest income/fees and commissions income; fees and commissions/bank assets; interest income/bank assets; profit/assets; fees and commissions/non-interest income), which are subsequently controlled with macroeconomic indicators (GDP, interest rate and inflation) for the period 1995 – 2009. The results of the econometric model corresponded with three out of the five assumptions made about the effects of post-communism. However, only the hypothesis that post-communist countries used their assets for higher net income from fees and commissions is significantly verified. Discrepancies were explained by x-inefficiencies on the cost side and a constant pressure on revenue stream diversification, which is in accordance with scholarly literature.