Assessing the Efficiency of Commercial Banks in Greece During the Financial Crisis: A Linear Approach in Conjunction with Financial Analysis
Journal of Money Investment and Banking (JMIB) / Issue (28) 2013
16 Pages Posted: 14 Aug 2013 Last revised: 3 Jul 2019
Date Written: April 11, 2013
This paper investigates the financial performance of commercial banks in Greece for the period 2007-2011, which is marked by the severe financial crisis. The efficiency assessment of Greek banks is based on financial figures and ratios. For this purpose a representative dataset of seven Greek commercial banking institutions is selected and exhaustive empirical research is employed based on financial, correlation and regression analyses in order to estimate the impact of selected independent variables (asset utilization, operational efficiency and bank size) on financial performance indicators (net interest margin and return on assets). The output of this research implies that during the tested period large banks in terms of deposits, credits, assets and shareholders’ equity under-perform in comparison with small banks. Moreover, significant correlations are reported between efficiency indicators and independent variables, remarks that are also confirmed from regression analysis results. However, the statistically significant impact of independent variables on the Greek banks’ financial performance is weaker than expected as compared to the pre-crisis period (2002-2007), condition which could be attributed to the distortion of financial linkages in the wake of the severe financial crisis that plagued the Greek banking system and Greek economy as a whole during the last six years.
Keywords: Banking Efficiency, Financial Analysis, Financial Crisis, Bank Size, Asset Management
JEL Classification: G200, G210
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