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The Control Of Small Medium Banks Profitability Using Financial Modeling Approach Under Certainty And Uncertainty

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  • LIAPIS, J. Konstantinos

    (Faculty of Sciences of Economy and Public Administration, Panteion University of Social and Political Sciences, Athens, Greece.)

  • TRIGKAS, J. Sotirios

    (Faculty of Sciences of Economy and Public Administration, Panteion University of Social and Political Sciences, Athens, Greece.)

Abstract

Following a prototype economic modelling approach for Small-Medium Banks (SMBs) business plans according to structure of Additional Funds Needed (AFN) models this paper examines the volatility of banking efficiency in terms of Key Profitability Variables (KPVs) in order to determine Key Performance Indicators (KPIs). The KPVs are the size and structure of deposits, loans and their interest rates. Initially we examine the intervals in which the KPVs of the SMBs are moving. Then we conduct a sensitivity analysis under certainty. Our paper provides first evidence that business plans following AFN economic models are worthy tools for financial planning of SMBs in order to control their performance, contributing to budgeting and decision making for SMBs strategic planning. Financial planning of SMBs in order to control their performance, contributing to budgeting and decision making for SMBs strategic planning, prove to be a critical process for the overall bank efficiency. With this paper we contribute to debate regarding the introduction economic modelling approaches under certainty and uncertainty in the banking industry.

Suggested Citation

  • LIAPIS, J. Konstantinos & TRIGKAS, J. Sotirios, 2019. "The Control Of Small Medium Banks Profitability Using Financial Modeling Approach Under Certainty And Uncertainty," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 23(4), pages 52-84, December.
    • Handle: RePEc:vls:finstu:v:23:y:2019:i:4:p:52-84
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    References listed on IDEAS

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    More about this item

    Keywords

    bank performance; AFN models; operation research;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory

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