Decline in profitability since 2005: French banks hold their own

Baisse de la rentabilité depuis 2005: les banques françaises tirent leur épingle du jeu

Eugenio Avisoa, Nicolas Chatelais, Pierre-Yves Gauthier, Joël Guilmo, Emmanuel Point and Stéphanie Tristram

Bulletin de la Banque de France, 2018, issue 216, No 3

Abstract: In a context of low interest rates and the strengthening of regulatory requirements, the profitability of French and European banks deteriorated between 2005 and 2016. Conversely, the return on assets of US banks climbed back up to its initial level at the end of the period after adjusting for the differences in accounting standards. However, the return on equity also fell sharply. French banks were significantly less affected than their European competitors by the 2008 financial crisis and the 2011 sovereign debt crisis. They have also improved their operational efficiency, especially since 2012. In addition, like for US banks, their levels of equity more than doubled but their balance sheet total grew faster. European banks, for their part, recorded a smaller increase in their equity (up by 66%) and their balance sheet total remained stable.

JEL-codes: G21 (search for similar items in EconPapers)
Date: 2018
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