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The Profit Generation Process in Banking

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New Drivers of Performance in a Changing Financial World

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Abstract

This chapter examines the determinants of profit and shareholder value creation for a large sample of European listed and unlisted banks between 1995 and 2002. There is a substantial literature that focuses on various factors that influence the performance of banks (see Molyneux and Thornton, 1992; Berger, 1995; Berger and Hannan, 1997; Berger and Mester, 2003; and Berger and Bonaccorsi di Patti, 2006). Few of these studies, however, consider the shareholder value creation indicators as measures of bank performance, which is surprising given that creating value for shareholders (generating returns in excess of the opportunity cost of capital) has been the main strategic objective of quoted banks over the last decade or so (Fiordelisi and Molyneux, 2006).

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Authors
  1. Franco Fiordelisi
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Editor information

Editors and Affiliations

  1. University of Rome ‘Tor Vergata’, Italy

    Alessandro Carretta (full professor in Financial Markets and Institutions and director of the PhD programme in Banking and Finance) (full professor in Financial Markets and Institutions and director of the PhD programme in Banking and Finance)

  2. Faculty of Economics ‘Federico Caffè’, University of Rome III, Italy

    Franco Fiordelisi MA, PhD (professor in Banking and Finance) (professor in Banking and Finance)

  3. Faculty of Economics, University of Rome ‘Tor Vergata’, Italy

    Gianluca Mattarocci MA, PhD (lecturer of Economics and Management of Financial Intermediaries) (lecturer of Economics and Management of Financial Intermediaries)

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© 2009 Franco Fiordelisi

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Fiordelisi, F. (2009). The Profit Generation Process in Banking. In: Carretta, A., Fiordelisi, F., Mattarocci, G. (eds) New Drivers of Performance in a Changing Financial World. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, London. https://doi.org/10.1057/9780230594814_7

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