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Determinants Of Bank Profitability In The South Eastern European Region

  • Athanasoglou, Panayiotis
  • Delis, Manthos
  • Staikouras, Christos

The aim of this study is to examine the profitability behaviour of bank-specific, industry-related and macroeconomic determinants, using an unbalanced panel dataset of South Eastern European (SEE) credit institutions over the period 1998-2002. The estimation results indicate that, with the exception of liquidity, all bank-specific determinants significantly affect bank profitability in the anticipated way. A key result is that the effect of concentration is positive, which provides evidence in support of the structure-conduct-performance hypothesis, even though some ambiguity arises given its interrelationship with the efficient-structure hypothesis. In contrast, a positive relationship between banking reform and profitability was not identified, whilst the picture regarding the macroeconomic determinants is mixed. The paper concludes with some remarks on the practicality and implementability of the findings.

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File URL: http://mpra.ub.uni-muenchen.de/10274/1/MPRA_paper_10274.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 10274.

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Date of creation: 2006
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Handle: RePEc:pra:mprapa:10274
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