Creative Commons

This thesis reports significant new findings on banking profitability by relating the internal factors , the external factors with time dummy variables as control for financial crisis in the test period. By employing a balanced panel data of 169 US banking institutions for the timespan of fourteen years (2003 - 2016) and by creating two extra sub - samples, namely the pre - crises (2003 - 2007) and post - crises (2008 - 2016), tries to investigate further into the bank profitability determinants and how these determinants have been altered due to the financial crises of 2008. More specifically, this analysis utilizes the most significant internal and external factors of determinants, namely the risk management, the capital management, the size of the bank, the expenses management and macroeconomic factors such as the gross domestic product per capital growth, the long - term interest rates and the rate of inflation. No previous study has investigated all these factors combined as determinants for the specific period and there is no recent evidence of the financial crises effects on the determinants of bank performance during this time span. Findings of the analysis indicate that he expected relationships are confirmed except the effect of the interest rates that produced an opposing to the expected result. Most of the factors seem to have a significant effect on bank performance and since the internal factors are the ones that are more easy to be managed some policy recommendations are being cited upon the results of this research. Finally, as it was expected, some differences are being observed into what determines the profitability after the burst of the 2008 financial crises. The determinants and especially the internal factors seem to have a higher impact on bank performance and that is why the results suggest that the bank performance is lower in the post - crises period.