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Determinants of bank profitability before, during, and after the financial crisis

Adelopo, Ismail; Lloydking, Robert; Tauringana, Venacious

Authors

Robert Lloydking

Venacious Tauringana



Abstract

© 2018, Emerald Publishing Limited. Purpose: The purpose of this paper is to report the results of an investigation into the relationship between bank-specific, macroeconomic factors and bank profitability before (1999-2006), during (2007-2009), and after (2010-2013) the financial crisis. Design/methodology/approach: Using the Economic Community of West African States’ bank panel data from 1999 to 2013, the paper used fixed effect models. The panel model includes bank-specific determinants (size, cost management, and liquidity), industry level, and macroeconomic variables. Findings: Panel data analyses results show that there is a significant relationship between bank-specific determinants (size, cost management, and liquidity) and bank profitability (ROA) before, during, and after the financial crisis. However, the relationships between other bank-specific (capital strength, credit risk, and market power), macroeconomic (gross domestic product and inflation) determinants are sensitive to both periods of analysis (before, during, and after financial crisis) and bank profitability measure used (ROA or NIM). Originality/value: Overall, these results suggest that the financial crisis did not affect the relationships between some bank-specific determinants and bank profitability.

Citation

Adelopo, I., Lloydking, R., & Tauringana, V. (2018). Determinants of bank profitability before, during, and after the financial crisis. International Journal of Managerial Finance, 14(4), 378-398. https://doi.org/10.1108/IJMF-07-2017-0148

Journal Article Type Article
Acceptance Date Nov 19, 2017
Online Publication Date Mar 9, 2018
Publication Date Aug 6, 2018
Journal International Journal of Managerial Finance
Print ISSN 1743-9132
Publisher Emerald
Peer Reviewed Peer Reviewed
Volume 14
Issue 4
Pages 378-398
DOI https://doi.org/10.1108/IJMF-07-2017-0148
Keywords banks, profitability, international business, Economic Community of West African States (ECOWAS), macroeconomic environment, financial crisis
Public URL https://uwe-repository.worktribe.com/output/878530
Publisher URL http://dx.doi.org/10.1108/IJMF-07-2017-0148
Additional Information Additional Information : This is the author's accepted manuscript. The final published version is available here: http://dx.doi.org/10.1108/IJMF-07-2017-0148.

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