How can euro area banks reach sustainable profitability in the future?

Magnus Andersson, Christoffer Kok, Harun Mirza, Csaba Móré and Jonas Mosthaf

Financial Stability Review, 2018, vol. 2

Abstract: On aggregate, bank profitability in the euro area has improved in recent quarters along with the cyclical recovery. However, the level of earnings for many banks is still below that required by investors and bank profitability is still vulnerable to a possible turnaround in the business cycle. This special feature looks at possible avenues for banks to reach more sustainable levels of profitability in the future. It highlights the need to overcome structural challenges in the form of low cost-efficiency, limited revenue diversification and high stocks of legacy assets (in some jurisdictions). JEL Classification: G21, G24, E58, E44

Keywords: banks; cost of equity; profitability (search for similar items in EconPapers)
Date: 2018-11
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Citations: View citations in EconPapers (13)

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