Profitability factors and efficiency of Greek banks

Abstract

Purpose

This paper aims to search for the factors that influence the profitability of Greek commercial and cooperative banks by examining other variables that have never been used before. It also seeks to examine bank performance before and during the economic crisis in Greece. The survey is based on previous similar research.

Design/methodology/approach

A multiple regression analysis has been used for the determination of the factors which influence the profitability of the Greek banking sector as well as the multicriteria method PROMETHEE for the examination of the Greek banking sector performance before (2007) and during the economic recession (2008‐2009).

Findings

The paper finds that: type of bank plays an important role in profitability; the indicator ROA is associated only with well‐capitalized banks with sufficient liquidity and cost efficiency; and cooperative banks in general at the beginning of the crisis were less influenced by the economic crisis than commercial banks.

Originality/value

This is the first time that the entire Greek banking system has been examined for the particular period regarding the factors that influence bank profitability. Up to now there has been no published research examining whether the type of the bank influences profitability or which of banks remained efficient and “durable” before and during the first two years of the economic crisis in Greece.

Citation

Ioanni Schiniotakis, N. (2012), "Profitability factors and efficiency of Greek banks", EuroMed Journal of Business, Vol. 7 No. 2, pp. 185-200. https://doi.org/10.1108/14502191211245606