Table 1 Studies on bank performance (profitability and efficiency)
From: Size matters: analyzing bank profitability and efficiency under the Basel III framework
Bank profitability analysis | |||
|---|---|---|---|
Authors | Period | Dataset | Main findings |
Bouheni et al. (2014) | 2005–2011 | 6 EU countries (Germany, UK, France, Greece, Spain, Italy) | Regulation improves profitability |
Căpraru and Ihnatov (2014) | 2004–2011 | 5 Central and Eastern Europe (CEE) countries (Romania, Hungary, Poland, Czech Republic, Bulgaria) | Banks with higher capital adequacy are more profitable |
Size of the banks has negative impact on profitability | |||
Guillén et al. (2014) | 1989–2005 | Latin America | Testing hypothesis of relative market power, structure conduct performance and efficient structure |
Profit depends on size as well as power and both together make structure conduct performance hypothesis to hold | |||
Ozkan et al. (2014) | 1998–2009 | Turkey | Regulation in Turkey had positive effect on lending, asset quality and profitability |
Petria et al. (2015) | 2004–2011 | Europe (EU 27) | Credit risk, liquidity risk, management efficiency and concentration have negative influence on bank profitability |
Terraza (2015) | 2005–2012 | Europe | No evidence of a positive relationship between greater efficiency and bank profitability |
Capitalization levels increase bank profitability | |||
Bucevska and Hadzi Misheva (2017) | 2005–2009 | 6 Balkan countries | Efficiency is positively associated with profitability, unlike industry concentration, supporting efficiency hypothesis instead of structure-conduct-performance (SCP) paradigm |
Hamdi et al. (2017) | 2005–2012 | Tunisia | Positive relationship between gross domestic product (GDP) and inflation with bank performance |
Asongu and Odhiambo (2019) | 2001–2011 | Africa | Bank size increases bank interest rate margins |
Market power and economies of scale do not increase or decrease the interest rate margins significantly | |||
Pasiouras (2008) | 2003 | 95 countries worldwide | All three pillars of Basel II provide evidence in favor of efficiency |
Larger size result in higher efficiency | |||
Concentration leads to higher efficiency | |||
Pasiouras et al. (2009) | 2000–2004 | 74 countries worldwide | Regulation related to three pillars increase cost and profit efficiency |
Chortareas et al. (2012) | 2000–2008 | 22 EU countries | Capital restriction and supervision increase efficiency |
Larger banks operating in countries with less concentrated and more developed systems tend to have relatively higher levels of efficiency | |||
Barth et al. (2013) | 1999–2007 | 72 countries worldwide | Regulation (Basel II pillars) is positively associated with efficiency |
Lee and Chih (2013) | 2004–2011 | China | Policymakers and banks face a trade-off between financial risk and efficiency |
Stricter regulation may be good for bank stability, but not for bank efficiency | |||
Kale et al. (2015) | 1997–2013 | Turkey | Regulation has a positive impact on efficiency |
Triki et al. (2017) | 2005–2010 | 42 countries in Africa | More stringent capital requirements enhance the efficiency of large banks |
Regulation should be adapted to the risk and size level of the institutions that are being regulated | |||
Jelassi and Delhoumi (2021) | 1995–2017 | Tunisia | Noticeable increase in banking technical efficiency, largely due to bank supervision |
Size of the banks and loans-to-asset ratio negatively affects efficiency | |||
Profitability is not significant | |||
Inflation positively affects efficiency | |||