Determinants of profitability in Spanish financial institutions. Comparing aided and non-aided entities

Salvador Climent-Serrano and Jose M. Pavía

Journal of Business Economics and Management, 2015, vol. 16, issue 6, 1170-1184

Abstract: The last financial crisis has led to the greatest contribution of public funds ever made to Spanish banks. This paper studies why the need for support has been asymmetric, with not all of the institutions requiring aid. Based on profitability of assets (ROA), we determine using panel data econometric and logit response models the components of profit and loss accounts that generated profitability as well as the factors leading to some entities to ask for aid. The analyses show that before the beginning of the crisis there were significant differences between entities that needed aid and those that did not. The most profitable banks grounded their success in the traditional revenue components of financial institutions (such as margin on interest rates and commissions), as well as in revenues obtained from participated companies and extraordinary results. The model offers a tool to detect entities in difficulties in advance, reducing the financial and social costs of public interventions. The factors more impacting on profitability of Spanish institutions are also identified.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.3846/16111699.2013.801881 (text/html)
Access to full text is restricted to subscribers.

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:taf:jbemgt:v:16:y:2015:i:6:p:1170-1184

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TBEM20

DOI: 10.3846/16111699.2013.801881

Access Statistics for this article

Journal of Business Economics and Management is currently edited by Izolda Joksiene, Romualdas Ginevicius and Ieva Meidute

More articles in Journal of Business Economics and Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().