Assessing the banking systems’ performance and its determinants in EU28 countries

Bogdan Florin Filip
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Bogdan Florin Filip: “Alexandru Ioan Cuza” University of Iaşi, Romania

Theoretical and Applied Economics, 2016, vol. XXIII, issue Special(I), 260-268

Abstract: The paper approaches the issue of assessing the banking performance at the level of the national banking systems of the EU28 countries, in the period 2000-2013, aiming to identify and analyse the action of different determinants on it. Considering the return on assets, return on equity and net interest margin as estimators of banking performance, from financial perspective, there are analysed, using econometric methods, the impacts bank-specific, industryspecific and macroeconomic factors on these estimators. Our findings show that the banking systems performance is significantly enhanced by banks’ activity diversification, low competition and the economic growth, but also negatively influenced especially by the poor expenses management and credit risk, reflected in the ratio of bad loans. They prove also both the linkage between banking performance and the performance of the economy and suggest that banks should diversify more their activities and take actions to limit credit risk and improve asset quality.

Keywords: return on assets; return on equity; net interest margin; determinants. (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:xxiii:y:2016:i:special(i):p:260-268

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