The Determinants of Profitability in Banking and Its Implication for Risk Management: Evidence from UK Bank over 2003-2012

Pan, Zijun (2013) The Determinants of Profitability in Banking and Its Implication for Risk Management: Evidence from UK Bank over 2003-2012. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

An unbalanced panel data set from Britain banks was applied to investigate the internal and external factors affecting profit in the banking industry over the period from 2003 to 2012 . This study is aimed to investigate the potential determinants of profit in the banking industry in the UK, and try to find out the relationship between bank profitability and its significant determinants. Also, this paper will combine the potential important and significant determinants with risk management framework, in order to find out the way which can improve the competition capacity in such a large competition banking market. It is found that liquidity and credit is the most important and significant factors in internal determinants for banking profitability (ROAA, ROAE and NIM). However, external determinants, including inflation rate, real interest rate and GDP, were found to be not very important to the profit in banks, except for GDP. A further discussion based on a lesson from the 2008 financial crisis will focus on the importance of managing and controlling the risks faced by banks, particularly in liquidity risk and credit risk.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 28 Mar 2014 16:11
Last Modified: 23 Sep 2016 06:27
URI: http://eprints.nottingham.ac.uk/id/eprint/26586

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