The paper of Dr. Panagiotis Barkas (with Dr. Theodore Kounadeas and Mr. Nikolaos Dimitrios Spatharakis) entitled “Explaining the first effects of Covid-19 on Greek banks’ profitability” has been published in the Bulletin of Applied Economics.
The paper studies the profitability dynamics of systemic Greek banks. By deploying an econometric methodology based on multiple linear regression analysis, we empirically investigate the drivers of banks’ return on assets between 2008 and 2020. The authors also shed light on the first effects of Covid-19 on banks. Examining the effects of various macroeconomic, regulatory and financial factors, they find that public debt developments, including Greek debt restructuring, and banks’ provisions for credit losses had a negative effect on banks profitability. Besides, they testify that banks’ capital adequacy and the size of liabilities of financial institutions towards their customers strengthened chances of increased bank profitability. The authors discuss the implications of our empirical findings in light of macroeconomic, regulatory and financial developments in Greece and the EU.
