EconPapers    
Economics at your fingertips  
 

Bank Stability: The Case of Nordic and Non-Nordic Banks in Latvia

Ramona Rupeika-Apoga, S.H. Zaidi, Y.E. Thalassinos and E.I. Thalassinos
Authors registered in the RePEc Author Service: El I. Thalassinos ()

International Journal of Economics & Business Administration (IJEBA), 2018, vol. VI, issue 2, 39-55

Abstract: The banking industry is facing huge challenges due to technology-enabled innovation, to changes in customer preferences, to bank de-risking and to new regulatory initiatives. To go through all these changes, banks need to be stable. The present study contributes to the empirical literature by identifying the determinants of stability of banks in the Latvian Banking Industry. This study covers both bank-specific (endogenous) factors and macroeconomic (exogenous) factors that impact the stability of banks. The data set used in this study is the annual financial statements of Latvian banks operated in the period 2003-2016. Using multivariate regression analysis techniques, we found evidence that credit risk and efficiency ratio have a significant negative impact on banks\' stability, whereas size of the bank, liquidity ratio, profitability, inflation and GDP growth have significant positive impact on bank\'s stability. We made comparison of bank-specific variables performance for Nordic-owned and non-Nordic-owned banks. Credit and liquidity risks, as well as efficiency ratio for Nordic-owned banks during the research period were higher, whereas size of the banks and profitability were better. Comparing measurement results of stability of banks, we received that Nordic-owned banks performance between 2003 to 2016 was better than non-Nordic-owned banks performance.

Keywords: Bank's stability; credit risk; liquidity risk; Z-Score. (search for similar items in EconPapers)
JEL-codes: G01 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
http://ijeba.com/dmdocuments/2018/2018_VI_2_3.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ers:ijebaa:v:vi:y:2018:i:2:p:39-55

Access Statistics for this article

More articles in International Journal of Economics & Business Administration (IJEBA) from International Journal of Economics & Business Administration (IJEBA)
Bibliographic data for series maintained by Marios Agiomavritis (). This e-mail address is bad, please contact .

 
Page updated 2019-12-08
Handle: RePEc:ers:ijebaa:v:vi:y:2018:i:2:p:39-55