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Table 7 Bank profitability determinants (for all banks jointly and separately for categories of banks with respect to their size)

From: Size matters: analyzing bank profitability and efficiency under the Basel III framework

ROA—dep. var

All banks

Large and medium banks only

Small banks only

[1]

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

Variables

ROA_all_B_baseline

ROA_all_B_EMU

ROA_all_B_EU15

ROA_LM_B_baseline

ROA_LM_B_EMU

ROA_LM_B_EU15

ROA_SMALL_B_baseline

ROA_SMALL_B_EMU

ROA_SMALL_B_EU15

L.ROA

0.444***

0.478***

0.478***

0.193***

0.235***

0.211***

0.504***

0.532***

0.520***

 

[4.403]

[4.962]

[4.962]

[3.392]

[4.377]

[2.736]

[4.859]

[4.286]

[4.377]

 

(0.101)

(0.096)

(0.096)

(0.057)

(0.054)

(0.077)

(0.104)

(0.124)

(0.119)

EFF_all_banks

0.007*

0.013***

0.013***

      
 

[1.646]

[4.009]

[4.009]

      
 

(0.004)

(0.003)

(0.003)

      

EFF_L&M_banks

   

0.024***

0.023***

0.024***

   
    

[4.002]

[4.123]

[3.892]

   
    

(0.006)

(0.006)

(0.006)

   

EFF_small_banks

      

0.051***

0.041***

0.039***

       

[3.227]

[2.951]

[3.119]

       

(0.016)

(0.014)

(0.012)

LIQ

0.005

0.016**

0.016**

0.002

0.002

0.003

0.020

0.012

0.010

 

[0.880]

[1.994]

[1.994]

[0.873]

[0.799]

[1.130]

[1.075]

[0.941]

[0.718]

 

(0.006)

(0.008)

(0.008)

(0.003)

(0.002)

(0.003)

(0.019)

(0.013)

(0.014)

LTR

− 0.001**

− 0.001***

− 0.001***

− 0.002***

− 0.002***

− 0.002***

− 0.000

− 0.000

− 0.001

 

[− 2.069]

[− 3.413]

[− 3.413]

[− 5.961]

[− 5.533]

[− 5.387]

[− 0.021]

[− 0.058]

[− 0.812]

 

(0.001)

(0.0004)

(0.0004)

(0.000)

(0.000)

(0.000)

(0.001)

(0.001)

(0.001)

GDPG

0.001**

0.0004**

0.0004**

0.001***

0.001***

0.001***

0.000

0.000

0.000

 

[2.555]

[2.310]

[2.310]

[3.411]

[3.933]

[3.779]

[0.157]

[1.132]

[0.672]

 

(0.0002)

(0.0002)

(0.0002)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

LHHI

− 0.001

− 0.005

− 0.005

− 0.011***

− 0.011***

− 0.011***

0.015

0.011

0.012

 

[− 0.528]

[− 0.862]

[− 0.862]

[− 3.338]

[− 3.537]

[− 3.636]

[1.292]

[1.128]

[1.173]

 

(0.002)

(0.005)

(0.005)

(0.003)

(0.003)

(0.003)

(0.011)

(0.009)

(0.010)

HICP

− 0.0004*

− 0.0002

− 0.0002

− 0.001**

− 0.001**

− 0.001**

− 0.000

− 0.000

− 0.000

 

[− 1.936]

[− 0.479]

[− 0.479]

[− 2.382]

[− 2.122]

[− 2.158]

[− 0.333]

[− 0.732]

[− 0.192]

 

(0.0002)

(0.0003)

(0.0003)

(0.000)

(0.000)

(0.000)

(0.001)

(0.001)

(0.001)

LBSIZE

− 0.0002

0.004

0.004

− 0.002***

− 0.001***

− 0.001***

0.013**

0.011**

0.015***

 

[− 0.451]

[1.013]

[1.013]

[− 3.241]

[− 2.891]

[− 3.174]

[2.396]

[2.168]

[3.015]

 

(0.0005)

(0.004)

(0.004)

(0.000)

(0.000)

(0.000)

(0.005)

(0.005)

(0.005)

REG_DUMMY

0.047

0.003

− 0.009

0.152***

0.142***

0.145***

− 0.301**

− 0.234*

− 0.320**

 

[1.485]

[1.000]

[− 0.084]

[3.903]

[3.705]

[3.577]

[− 2.014]

[− 1.661]

[− 2.127]

 

(0.032)

(0.003)

(0.112)

(0.039)

(0.038)

(0.041)

(0.149)

(0.141)

(0.150)

1.EMU

 

− 0.011

  

− 0.003

  

0.007

 
  

[− 0.094]

  

[− 1.070]

  

[0.838]

 
  

(0.112)

  

(0.003)

  

(0.008)

 

1.EU15

  

− 0.005

  

0.002

  

0.007

   

[− 0.706]

  

[0.378]

  

[0.594]

   

(0.008)

  

(0.005)

  

(0.012)

Nb. of banks [id]

433

433

433

281

281

281

152

152

152

Nb. of observations

3879

3879

3879

2521

2521

2521

1358

1358

1358

Hansen test [p-value]

0.12

0.09

0.09

0.31

0.98

0.87

0.26 (0.57)

0.13

0.13

AR1 test [p-value]

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

AR2 test [p-value]

0.21

0.21

0.21

0.79

0.95

0.87

0.25

0.26

0.26

  1. ***, **, * denote significance at the 1%, 5%, and 10% significance level. Numbers in brackets are z-statistics, while robust standard errors are in parenthesis. Models also include temporal and country dummy variables
  2. Source: Authors calculations