ANALYZING THE PROFITABILITY OF TOP-RATED BANKS IN THE WORLD IN LIGHT OF COVID-19

Indranarain Ramlall ()
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Indranarain Ramlall: University of Mauritius, Mauritius

Global Economy Journal (GEJ), 2022, vol. 22, issue 04, 1-32

Abstract: We analyze the impact of COVID-19 on the profitability of top-rated banks in the world using a comprehensive list of bank-specific ratios under post-lasso regressions based on GLS, FGLS and WLS techniques. While size and loans do not materially impound on profitability, a squeeze in the positive impact of asset utilization for all profitability metrics is conspicuously noted. COVID-19 induced declines in the negative impact of total impairment charges and provisions are noted for ROA and NIM while COVID-19-induced hike in the cost-to-income ratio is found for ROE. Findings also demonstrate that policy responses initiated during the crisis did not boost the profits of banks. From a policy perspective, sharing economy could manifest as a contemplated business model for banks, should the world relapse into another form of pandemic-related crisis.

Keywords: COVID-19; banks; profitability (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1142/S2194565923500033

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