Macroeconomic and Industry-Specific Determinants of Greek Bank Profitability

The purpose of this paper is to investigate the external factors that influence the profitability of a typical Greek systemic bank over the period 2001-2014. Design/Methodology/Approach: A conceptual framework incorporating two fundamental groups of constructs, namely, macroeconomic forces and industry related factors, was developed. Two constructs were examined in the former: GDP growth rate and unemployment rate, whilst two attributes were explored in the latter; the bank's market share, both in terms of deposits and in terms of assets, and the banking market growth, also both in terms of the market's total assets and total deposits. In order to isolate the effects of the ongoing financial crisis, the research was undertaken for two periods, firstly 2001 to 2014 and secondly, the period 2001-2011, which excluded the deep recession. Consequently, multiple regression analysis was conducted and linear models were specified by means of OLS.