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The Performance of Some Privatized Italian Banks

Author

Listed:
  • Fabio Farabullini

    (Banca d'Italia)

  • Donald D. Hester

    (University of Wisconsin-Madison)

Abstract

This paper examines changes in the organization structure and profitability of a group of six privatized large Italian banks. After privatization, there was a high rate of turnover of managers. Relative to other Italian banks, a variety of measures of profitability rose rapidly after privatization; in some cases, the realization of losses from bad loans made a large contribution to subsequent profitability. Regression analysis showed that there was a significant effect of privatization on profits; privatization coincided with a higher rate of growth of fee income. The indications are that privatization is leading to an improved operating performance.

Suggested Citation

  • Fabio Farabullini & Donald D. Hester, 2005. "The Performance of Some Privatized Italian Banks," Rivista di Politica Economica, SIPI Spa, vol. 95(4), pages 235-272, July-Augu.
    • Handle: RePEc:rpo:ripoec:v:95:y:2005:i:4:p:235-272
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    Citations

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    Cited by:

    1. Alexei Karas & Koen Schoors & Laurent Weill, 2010. "Are private banks more efficient than public banks?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(1), pages 209-244, January.
    2. Lorenzo Ciari & Riccardo De Bonis, 2011. "Entry decisions after deregulation: the role of incumbents' market power," Mo.Fi.R. Working Papers 50, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.

    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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