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.
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