The Profit Generation Process in Banking

Franco Fiordelisi

Chapter 7 in New Drivers of Performance in a Changing Financial World, 2009, pp 109-130 from Palgrave Macmillan

Abstract: Abstract This chapter examines the determinants of profit and shareholder value creation for a large sample of European listed and unlisted banks between 1995 and 2002. There is a substantial literature that focuses on various factors that influence the performance of banks (see Molyneux and Thornton, 1992; Berger, 1995; Berger and Hannan, 1997; Berger and Mester, 2003; and Berger and Bonaccorsi di Patti, 2006). Few of these studies, however, consider the shareholder value creation indicators as measures of bank performance, which is surprising given that creating value for shareholders (generating returns in excess of the opportunity cost of capital) has been the main strategic objective of quoted banks over the last decade or so (Fiordelisi and Molyneux, 2006).

Keywords: Credit Risk; Market Risk; Equity Capital; Saving Bank; Residual Income (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-0-230-59481-4_7

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DOI: 10.1057/9780230594814_7

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