In the euro area interest rates have dropped low for almost a decade now and it is anticipated to endure in the years to come. This creates challenges for banks performance, therefore this paper observes whether interest rates effect bank profitability. Further investigating whether loan growth should be an important factor to also consider in the model. We use data for 72 banks from various countries in the Eurozone for the period 2006-2016 and conduct a panel data analysis on this data. Results show that loan growth is not significant and is not a vital component to be included in the model. We find a negative significant relationship between the spread which compromises of long-term deposit rates minus the interest rate controlled by the European Central Bank. This suggests that, a decrease in interest rates can and had eroded bank profitability in the euro area.

Foreign Banks and Financial Development - Foreign Bank Lending in CEE Countries Master thesis Anja Köthe Abstract The objective of this paper is to investigate the relation between foreign banks and financial development and to focus on foreign bank lending, in particular. The research focuses on four countries with a high share of foreign banks: Czech Republic, Hungary, Poland and Slovakia. Using a dataset of 122 banks over a 10 year period from 2005 to 2015 a fixed effects panel regression models is used for an empirical analysis. Loan growth as a proxy for lending behaviour and credit stability is used as the dependent variable. The empirical models investigate the determinants of loan growth in foreign and domestic banks as well as the dependence of foreign bank subsidiaries on their parent banks. The regression results indicate that domestic banks are more dependent on local economic conditions and bank performance. Their credit supply depends more on their profitability, loan quality and domestic market share. Foreign bank subsidiaries, in contrast, exhibit greater independence from local economic conditions and also from subsidiary performance indicators such as profitability ratios. Instead their lending behaviour is significantly influenced by the financial characteristics of their parent banks.

本文以2000年至2009年計22家台灣商業銀行之追蹤資料（panel data），並利用雙因子固定效果模型（two-factor fixed-effects model）探討不同放款之成長對逾期放款比率（逾期放款/放款總額）與轉銷呆帳率（轉銷呆帳/放款總額）之影響效果。 一般而言，金融主管機關以逾期放款比率為代表銀行資產品質之指標，然而銀行或為達成業績目標，或為符合主管機關之監理要求，往往追求短期成長而忽視風險控制，在初期因放款基礎擴大反而造成逾期放款比率下降的資產品質改善假象，之後卻面臨資產品質惡化須大幅轉銷呆帳或出售不良債權而侵蝕銀行獲利及資本，因此除逾期放款比率外，本文另納入轉銷呆帳率為衡量放款品質之指標，以確實瞭解銀行信用擴張對資產品質之影響，提供金融主管機關及銀行業者在未來相關政策上之參考。 研究結果顯示，民營企業放款成長率、消費者放款成長率及資本適足率對逾期放款比率有顯著負向影響，無擔保消費者放款成長率、前期逾期放款比率及淨值比率對轉銷呆帳率有顯著正向影響，總放款成長率、中小企業放款成長率及消費者放款成長率對轉銷呆帳率有顯著負向影響。 / This paper studies 22 banks from Taiwan during the 2000-2009 period. The panel data regression is used to analyze the different loan growth influencing non-performing loan (NPL) and charge-off ratios of Taiwan’s commercial banks. In general,the authority use non-performing loan (NPL) ratio to represent the quality of bank assets.But for performance or in compliance with the authority's request,banks may pursue loan growth in the short term and ignore the risk.In the beginning, NPL ratios decrease and then banks face deterioration in assets quality.Except NPL ratio, this paper adds charge-off ratio to analyze the effect of different loan growth on assets quality. Our major findings are as follows:(1) The effects of private enterprises loan growth rate, consumer loan growth rate and capital adequacy ratio on NPL ratio are significantly negative. (2) The effects of non-residential consumer loan growth rate,NPL ratio of the previous period and equity ratio on charge-off ratio are significantly positive. (3) The effects of total loan growth rate,small and medium enterprises loan growth rate and consumer loan growth rate on charge-off ratio are significantly negative.

Cette thèse examine trois questions importantes dans le secteur bancaire, à savoir le risque, les fonds propres et le crédit. Elle comprend trois essais empiriques. Le premier chapitre analyse l'impact du «printemps arabe» et de la crise financière mondiale de 2007-2008 sur la stabilité du secteur bancaire dans la région MENA. Les résultats montrent que le «printemps arabe» n'a pas eu d'effet négatif sur la stabilité des banques, alors que la crise financière mondiale a considérablement réduit leur stabilité. Le deuxième chapitre étudie le rôle joué par l'environnement institutionnel dans la mise en place de coussin de fonds propres par les régulateurs ou par les banques en interne. D’après les résultats, pour que les ratios de capital réglementaire soient efficaces, l'environnement institutionnel ne doit pas être négligé lors de la mise en place de ces ratios. Le troisième chapitre étudie les différents effets des droits des consommateurs et des créanciers sur le coût des prêts. Les résultats révèlent que le coût des prêts augmente en présence de lois strictes sur la protection des consommateurs, tandis que l'augmentation des droits des créanciers réduit ce coût. / This thesis examines three important issues in the banking sector, namely: Risk, Capital and Lending. It comprises of three empirical essays. The first chapter analyzes the impact of the 'Arab Spring' and the Global Financial Crisis of 2007-2008 on the banking sector stability in the MENA region. The results show that the ‘Arab Spring’ did not have a negative effect on banks’ stability, while the Global Financial Crisis significantly decreased banks’ stability. The second chapter investigates the role played by the institutional environment in determining capital buffers set either by regulators or by banks internally. The findings provide evidence that for the regulatory capital ratios to be effective, the institutional environment should not be neglected when implementing these ratios. The third chapter investigates the different effects of both consumers’ and creditors’ rights on the cost of lending. The results reveal that the cost of lending increases in the presence of strong financial consumer protection laws, while higher creditors’ rights decrease this cost.