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

See all articles by Andreas G. Georgantopoulos

Andreas G. Georgantopoulos

National and Kapodistrian University of Athens; Panteion University of Athens - Panteion University of Political and Social Sciences

Anastasios Tsamis

Panteion University of Athens

Date Written: April 11, 2013

Abstract

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

Suggested Citation

Georgantopoulos, Andreas G. and Tsamis, Anastasios, Assessing the Efficiency of Commercial Banks in Greece During the Financial Crisis: A Linear Approach in Conjunction with Financial Analysis (April 11, 2013). Journal of Money Investment and Banking (JMIB) / Issue (28) 2013, Available at SSRN: https://ssrn.com/abstract=2309402

Andreas G. Georgantopoulos (Contact Author)

National and Kapodistrian University of Athens ( email )

Greece

Panteion University of Athens - Panteion University of Political and Social Sciences ( email )

136 Sygrou
Athens
Greece

Anastasios Tsamis

Panteion University of Athens ( email )

Athens
Athens 117 45
Greece

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