A global analysis of bank profitability factors
Abstract We analyze the factors that explain banks’ profitability globally and by region. With increasing globalization, knowing the different aspects of bank profitability is essential for countries’ financial stability and economic growth. This study used a sample of 2,091 commercial banks operati...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Springer Nature
2024-01-01
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| Series: | Humanities & Social Sciences Communications |
| Online Access: | https://doi.org/10.1057/s41599-023-02545-6 |
| _version_ | 1797350096354934784 |
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| author | Prosper Lamothe Enrique Delgado Miguel A. Solano Sergio M. Fernández |
| author_facet | Prosper Lamothe Enrique Delgado Miguel A. Solano Sergio M. Fernández |
| author_sort | Prosper Lamothe |
| collection | DOAJ |
| description | Abstract We analyze the factors that explain banks’ profitability globally and by region. With increasing globalization, knowing the different aspects of bank profitability is essential for countries’ financial stability and economic growth. This study used a sample of 2,091 commercial banks operating in 110 countries grouped into major world regions. With random effect regression models, the global results show that the internal factors that explain the bank´s profitability are listed entities, impaired loans, efficiency, gross interest margin, and capitalization. For its part, the most significant external factors are related to the position of the countries in the ranking by assets, inflation, unemployment, interest rates, and economic growth. From a regional perspective, the results allow us to deduce with high robustness the existence of variable sets that determine bank profitability in each region and that regional models outperform global models in most cases. |
| first_indexed | 2024-03-08T12:39:53Z |
| format | Article |
| id | doaj.art-e5f241a0bf9848ad8e79e3ac29f1c825 |
| institution | Directory Open Access Journal |
| issn | 2662-9992 |
| language | English |
| last_indexed | 2024-03-08T12:39:53Z |
| publishDate | 2024-01-01 |
| publisher | Springer Nature |
| record_format | Article |
| series | Humanities & Social Sciences Communications |
| spelling | doaj.art-e5f241a0bf9848ad8e79e3ac29f1c8252024-01-21T12:14:24ZengSpringer NatureHumanities & Social Sciences Communications2662-99922024-01-0111111210.1057/s41599-023-02545-6A global analysis of bank profitability factorsProsper Lamothe0Enrique Delgado1Miguel A. Solano2Sergio M. Fernández3Universidad Autónoma de MadridUniversidad Autónoma de MadridUniversidad de GranadaUniversidad de MálagaAbstract We analyze the factors that explain banks’ profitability globally and by region. With increasing globalization, knowing the different aspects of bank profitability is essential for countries’ financial stability and economic growth. This study used a sample of 2,091 commercial banks operating in 110 countries grouped into major world regions. With random effect regression models, the global results show that the internal factors that explain the bank´s profitability are listed entities, impaired loans, efficiency, gross interest margin, and capitalization. For its part, the most significant external factors are related to the position of the countries in the ranking by assets, inflation, unemployment, interest rates, and economic growth. From a regional perspective, the results allow us to deduce with high robustness the existence of variable sets that determine bank profitability in each region and that regional models outperform global models in most cases.https://doi.org/10.1057/s41599-023-02545-6 |
| spellingShingle | Prosper Lamothe Enrique Delgado Miguel A. Solano Sergio M. Fernández A global analysis of bank profitability factors Humanities & Social Sciences Communications |
| title | A global analysis of bank profitability factors |
| title_full | A global analysis of bank profitability factors |
| title_fullStr | A global analysis of bank profitability factors |
| title_full_unstemmed | A global analysis of bank profitability factors |
| title_short | A global analysis of bank profitability factors |
| title_sort | global analysis of bank profitability factors |
| url | https://doi.org/10.1057/s41599-023-02545-6 |
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