Determinanty výnosnosti evropského bankovního systému v letech 2012-2019

Abstract

This paper aims to find the microeconomic and macroeconomic determinants of European bank profitability from 2012 to 2019 using the regression model with the multicollinearity condition as a matrix parameter, the multicollinearity below the defined value, ensuring regression model reliability. The bank sector profitability is measured by return of average equity, return of average assets and net interest margin as dependent variables. The research creates a set of independent variables based on a literature review. The model is built on a sample of 3,257 European commercial banks for all EU countries excluding Romania due to missing data, and the input data were obtained based on the Orbis Focus Bank and the World Bank Database. The results revealed that the cost to income ratio and loan loss reserves to gross loans are the most important determinants of profitability of European commercial banks as measured by return of average assets. The results also show that GDP growth rate, inflation measured by the consumer prices and loan loss reserves to gross loans are the most important determinants for the net interest margin indicator. We recommend that commercial banks optimize the cost structure, create sufficient reserves, monitor the process of digital transformation and monitor credit risk indicators.