The Effect of Financial Crises on Banking Performance in Developed and Emerging Economies

  • Necla Tunay
  • Nesrin Özataç
  • K. Batu TunayEmail author
Conference paper
Part of the Springer Proceedings in Business and Economics book series (SPBE)


The aim of the study is to examine the effect of crises on the stability of the bankingsystem in 46 developed and emerging economies for the years 1999–2014. The variables are tested by using the two-step dynamic panel data analysis. The results indicate that the banking crises have an impact on the banking system stability. On the other hand, it is obsereved that the comparative conditions and the volatility on asset prices are the determinants on performance-stability relations. The most important finding is that the credit to GDP gap influence bank performance negatively.


Commercial banks Bank crises Performance Dynamic panel 


  1. Abreu, M., Mendes, V. (2002). Commercial bank interest margins and profitability: Evidence from E.U. Countries. CISEP – CEMPRE, Working Paper Series, Porto.Google Scholar
  2. Aburime, T.U. (2008). Determinants of bank profitability: Macroeconomic evidence from Nigeria. SSRN Paper, September.Google Scholar
  3. Albulescu, C. T. (2015). Banks’ profitability and financial soundness indicators: A macro-level investigation in emerging countries. Procedia – Economics and Finance, 23, 203–209.CrossRefGoogle Scholar
  4. Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte carlo evidence and an application to employment equations. Review of Economic Studies, 58(2), 277–297.CrossRefGoogle Scholar
  5. Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error component models. Journal of Econometrics, 68(1), 29–51.CrossRefGoogle Scholar
  6. Athanasoglou, P.P., Delis, D.M., Staikouras, C.K. (2006). Determinants of bank profitability in the Southern Eastern European Region. Bank of Greece Working Paper, No. 47, September.Google Scholar
  7. Athanasoglou, P. P., Brissimis, S. N., & Delis, M. D. (2008). Bank-specific, industry-specific and macroeconomic determinants of bank profitability. Journal of International Financial Markets, Institutions and Money, 18, 121–136.CrossRefGoogle Scholar
  8. Beltratti, A., & Stulz, R. M. (2011). The credit crisis around the globe: Why did some banks perform better? Journal of Financial Economics, 105(1), 1–17.CrossRefGoogle Scholar
  9. Berger, A. N. (1995). The profit – structure relationship in banking: Tests of market-power and efficient-structure hypotheses. Journal of Money, Credit and Banking, 27(2), 404–431.CrossRefGoogle Scholar
  10. Bennett, R. L., Güntay, L., & Unal, H. (2015). Inside debt, bank default risk, and performance during the crisis. Journal of Financial Intermediation, 24, 487–513.CrossRefGoogle Scholar
  11. Bhimjee, D. C., Ramos, S. B., & Dias, J. G. (2016). Banking industry performance in the wake of the global financial crisis. International Review of Financial Analysis, 48, 376–387.CrossRefGoogle Scholar
  12. Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic Panel data models. Journal of Econometrics, 87(1), 115–143.CrossRefGoogle Scholar
  13. Bourke, P. (1989). Concentration and other determinants of bank profitability in Europe, North America and Australia. Journal of Banking and Finance, 13(1), 65–79.CrossRefGoogle Scholar
  14. Capraru, B., & Ihnatov, I. (2014). Banks’ profitability in selected Central and Eastern European Countries. Procedia – Economics and Finance, 16, 587–591.CrossRefGoogle Scholar
  15. Demirgüç-Kunt, A., & Huizinga, H. (1999). Determinants of commercial bank interest margins and profitability: Some international evidence. World Bank Economic Review, 13(2), 379–408.CrossRefGoogle Scholar
  16. Demirgüç-Kunt A, Huizinga, H. (2000). Financial structure and bank profitability, World Bank Policy. Research Working Paper Series, No: 2430, January.Google Scholar
  17. Diaconu IR, Oanea, D.C. (2014). Determinants of bank profitability: Evidence from Credit Group. International Finance and Banking Conference, FIBA 2014, Bucharest, Romania, 356-362.Google Scholar
  18. Dietrich, A., & Wanzenried, G. (2011). What determines the profitability of commercial banks? new evidence from Switzerland. Journal of International Financial Markets, Institutions and Money, 21(3), 307–327.CrossRefGoogle Scholar
  19. Dietrich, A., & Wanzenried, G. (2014). The determinants of commercial banking profitability in low-,middle-, and high-income countries. The Quarterly Review of Economics and Finance, 54, 337–354.CrossRefGoogle Scholar
  20. Flamini, V., McDonald, C.A., Schumacher, L. (2009). The determinants of commercial banks profitability in Sub-Saharan Africa. IMF Working Paper, No: WP/09/15, January.Google Scholar
  21. Goddard, J., Molyneux, P., & Wilson, J. O. S. (2004). The profitability of European banks: A cross-sectional and dynamic panel analysis. Manchester School, 72(3), 363–381.CrossRefGoogle Scholar
  22. Gökalp, F. (2014). Kriz Öncesi ve Kriz Sonrası Dönemler İtibariyle Katılım Bankaları ve Ticari Bankaların Karlılığı Üzerine Karşılaştırmalı Bir Araştırma. Selçuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 32, 191–201.Google Scholar
  23. Guillen, J., Rengifo, E. W., & Ozsoz, E. (2014). Relative power and efficiency as a main determinant of banks’ profitability in Latin America. Borsa Istanbul Review, 14, 119–125.CrossRefGoogle Scholar
  24. Hoffmann, P. S. (2011). Determinants of the profitability of the US banking industry. International Journal of Business and Social Science, 2(22), 255–269.Google Scholar
  25. Iatridis, G. E., & Persakis, A. D. (2012). Bank profitability determinants under IFRSs. Journal of Economics and Accounting, 3(1), 77–99.CrossRefGoogle Scholar
  26. Kamarudin, F., Sufian, F., & Nassir, A. M. (2016). Global financial crisis, ownership and bank profit efficiency in the Bangladesh’s state owned and private commercial banks. Contaduría y Administración, 61, 705–745.CrossRefGoogle Scholar
  27. Mamatzakis, E. C., & Remoundos, P. C. (2003). Determinants of Greek commercial banks profitability: 1989–2000. Spoudai, 53(1), 84–94.Google Scholar
  28. Micco, A., Panizza, U., & Yanez, M. (2007). Bank ownership and performance. does politics matter? Journal of Banking and Finance, 31(1), 219–241.CrossRefGoogle Scholar
  29. Molyneux, P., & Thornton, J. (1992). Determinants of European bank profitability: A note. Journal of Banking and Finance, 16(6), 1173–1178.CrossRefGoogle Scholar
  30. Naceur, S.B. (2003). The determinants of the Tunisian banking industry profitability: Panel evidence. Universite Libre de Tunis, Department of Finance Working Paper, October.Google Scholar
  31. Naceur, S. B., & Goaied, M. (2001). The determinants of the Tunisian deposit banks’ performance. Applied Financial Economics, 11(3), 317–319.CrossRefGoogle Scholar
  32. Naceur, S. B., & Goaied, M. (2008). The determinants of commercial bank interest margin and profitability: Evidence from Tunisia. Frontiers in Finance and Economics, 5(1), 106–130.Google Scholar
  33. Naidu, V.N., Nair, M.S. (2014). Financial liberalization and determinants of profitability of commercial banks in India. MPRA Papers, No: 57166, July.Google Scholar
  34. Neely, M.C., Wheelock, D.C. (1997). Why does bank performance vary across states?. Federal Reserve Bank of St. Louis Reviews, March-April, 27-38.Google Scholar
  35. Olson, D., & Zoubi, T. (2016). Convergence in bank performance for commercial and Islamic banks during and after the global financial crisis. The Quarterly Review of Economics and Finance, 65, 71–87.Google Scholar
  36. Petria, N., Capraru, B., & Ihnatov, I. (2015). Determinants of banks’ profitability: Evidence from EU 27 banking systems. Procedia – Economics and Finance, 20, 518–524.CrossRefGoogle Scholar
  37. Pasiouras, F., & Kosmidou, K. (2007). Factors influencing the profitability of domestic and foreign commercial banks in the European union. Research in International Business and Finance, 21(2), 222–237.CrossRefGoogle Scholar
  38. Ramlan, H., & Adnan, M. S. (2016). The profitability of Islamic and conventional bank: Case study in Malaysia. Procedia – Economics and Finance, 35, 359–367.CrossRefGoogle Scholar
  39. Rashid, A., & Jabeen, S. (2016). Analyzing performance determinants: Conventional versus Islamic banks in Pakistan. Borsa Istanbul Review, 16(2), 92–107.CrossRefGoogle Scholar
  40. Roodman, D. (2006). How to Do xtabond2: An Introduction to Difference and System GMM in Stata. Center for Global Development Working Paper, No:103, December.Google Scholar
  41. Roodman, D. (2008). A Note on the Theme of Too Many Instruments. Center for Global Development Working Paper, No: 125, May.Google Scholar
  42. Roodman, D. (2009). How to do xtabond2: An introduction to difference and system GMM in stata. The Stata Journal, 9(1), 86–136.Google Scholar
  43. Roman, A., & Danuletiu, A. E. (2013). An empirical analysis of the determinants of bank profitability in Romania. Annales Universitatis Apulensis Series Oeconomica, 15(2), 580–593.Google Scholar
  44. Short, B. K. (1979). The relation between commercial bank profit rates and banking concentration in Canada, Western Europe and Japan. Journal of Banking and Finance, 3(3), 209–219.CrossRefGoogle Scholar
  45. Staikouras, C. K., & Wood, G. E. (2004). The determinants of European bank profitability. International Business and Economics Research Journal, 3(6), 57–68.Google Scholar
  46. Taşkın, F. D. (2011). Türkiye’de Ticari Bankaların Performansını Etkileyen Faktörler. Ege Akademik Bakış, 11(2), 289–298.Google Scholar
  47. Tunay, K. B. (2014). Türkiye’de Banka Karlılığının Belirleyicileri: Ölçek Büyüklükleri, Mülkiyet ve Finansal Krizler Temelinde Yeni Bir Analiz. Bankacılar Dergisi, Sayı, 91, 3–35.Google Scholar
  48. Us, V. (2015). Küresel Kriz öncesi ve sonrasında Türk Bankacılık Sektörünün Performansı. İktisat İşletme ve Finans, 30(353), 45–74.Google Scholar
  49. Yin, W., Matthews, K. (2014). The determinants and profitability of switching costs in Chinese Banking. Cardiff Economics Working Papers, No: E2014/13, July.Google Scholar

Copyright information

© Springer International Publishing AG 2017

Authors and Affiliations

  1. 1.Marmara UniversityIstanbulTurkey
  2. 2.Eastern Mediterranean UniversityFamagustaTurkey
  3. 3.Yıldız Technical UniversityIstanbulTurkey

Personalised recommendations