The determinants of bank profitability: A cross-country analysis

Özet

This study investigates the determinants of bank profitability in 23 countries from 2002 to 2016 usingthe system generalized method of moments. The findings indicate that the number of bank cards issued,the number of automated teller machines (ATMs) and the number of point of sale (POS) terminals canimprove bank profitability. Hence, this suggests a need for further expansion of these delivery channels.Also, the findings show the negative impact of market power on bank profitability, implying thatcompetition improves bank profitability. Further, the positive relationship between capital marketdevelopment and bank profitability suggests that they should be considered as complementary to oneanother.