Macroeconomic Determinants of Bank Profitability: Evidence from Georgia

Klara Ghurtskaia

Abstract


This paper examines macroeconomic impact on the profitability of Georgian banking sector during 2003-2017 years. The bank profitability variable is Return on Assets and as for macroeconomic variables they include gross domestic product, inflation, unemployment, foreign direct investment and exchange rate. Correlation analyses and regression analyses were done. Based on this, our results suggests that macro variables have week relationship with banks profitability variable.


Keywords


Macroeconomic, Bank, profitability, Correlation, Regression;

References


Allen F., Carletti E., (2009), The Global Financial Crisis: Causes and Consequences, Global Market Integration and Financial Crises at HKUST, July 12-13;

Buti M., (2009), Economic Crisis in Europe: Causes, Consequences and Responses. Office for Official Publications of the European Communities, European Union, European Commission Directorate-General for Economic and Financial Affairs, Luxembour.

De Grauwe P., (2008), The Banking Crisis: Causes, Consequences and Remedies, CEPS, November Vol., No. 178.

Dore, R. (2008), Financialization of the global economy, (pp. 1097–1110. Industrial and Corporate Change, Volume 17, Number 6.

Haldane, A., (2009). Rethinking the financial network. Speech delivered at the Financial Student Association, Amsterdam, April;

Kapoor, S., (2014 ).The financial crisis – causes & cures, Publisher: FES Brüssel Bertelsmannstiftung ETUI, Bonn.

Krugman P. (2009) “How did Economists Get it So Wrong”, New York Times, September 2.

Semmler, W. (2011) Asset Prices, Booms and Recessions. 3rd ed. Springer edition, Heidelberg/London/New York.

Shiller, R. J. (2008) “The Subprime Solution”, Princeton University Press, NJ.

Tee1 O.C., (2011), The international banking crisis: effects and some key lessons, (pp 359-363.) Bank for International Settlements, vol. 54.

Watt A., Botsch, A. , (2010), After the crisis: towards a sustainable growth model, European Trade Union Institute aisbl, D/2010/10.574/06;,

Young B., (2014). Financial crisis: causes, policy responses, future challenges, Outcomes of EU-funded research, European Union;

Martinho R., Oliviera J., Oliviera V., (2017), Bank profitability and Macroeconomic factors, Financial stability papers, Banco de Portugal, Lisbon, August, ISSN 2183-4059 (online);

Kanwal S., Nadeem M., (2013), THE IMPACT OF MACROECONOMIC VARIABLES ON THE PROFITABILITY OF LISTED COMMERCIAL BANKS IN PAKISTAN, European Journal of Business and Social Sciences, Vol. 2, No.9 , pp 186-201, December 2013. P.P. 186 - 201 URL: http://www.ejbss.com/recent.aspx;

Tan, Yong & Floros, Christos. (2012). Bank profitability and GDP growth in China: A note. Journal of Chinese Economic and Business Studies. 10. 267-273. 10.1080/14765284.2012.703541.

Dinson S.L., (2017), CIMB Bank Performance: Relationship between GDP, Leverage Ratio and Operating Efficiency Ratio to Profitability, UNIVERSITI UTARA MALAYSIA, Munich Personal RePEc Archive MPRA Paper No. 78497, posted 17 April 2017, thttps://mpra.ub.uni-muenchen.de/78497/;

Osamwonyi I.O. , Michael C.I., (2014), THE IMPACT OF MACROECONOMIC VARIABLES ON THE PROFITABILITY OF LISTED COMMERCIAL BANKS IN NIGERIA, European Journal of Accounting Auditing and Finance Research Vol.2,No.10, pp.85-95, December 2014 Published by European Centre for Research Training and Development UK;

Evans, Ovamba & Kiganda, Evans. (2014). Effect of Macroeconomic Factors on Commercial Banks Profitability in Kenya: Case of Equity Bank Limited. 5. 2222-2855.

Rosli A.R., (2017), The Relationship Between Hong Leong Bank’s Performance with Leverage and Inflation, MPRA Paper No. 78500, posted 17 April 2017 , thttps://mpra.ub.uni-muenchen.de/78500/;

Alfani L., Rustandar I., (2013), The Impact of Inflation to Private Banking Profitability, International Journal of Science and Research (IJSR), India, Volume 2 Issue 3, March 2013, Online ISSN: 2319-7064;


Full Text: PDF

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.