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The Impact of COVID-19 on Bank Profitability: Cross-Country Evidence

Author

Listed:
  • Emmanuelle Augeraud Veron

    (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)

  • Whelsy Boungou

    (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)

Abstract

Using data from 5474 banks located in 23 OECD countries over the period 2019Q2-2022Q1, we study the influence of COVID-19 on bank profitability (before and during the COVID-19 vaccination period). Our results show a negative impact of the COVID-19 pandemic on bank profitability, especially at the onset of the health crisis. In addition, we find that vaccination against COVID-19 had a positive effect on bank profitability, not yet sufficient to compensate for the losses generated at the beginning of the pandemic. Finally, we show that these effects depend on the characteristics of banks (notably size and capital) before vaccination and on the severity of the crisis across countries. Overall, we provide the first evidence of the influence of vaccination on bank behavior in terms of profitability.

Suggested Citation

  • Emmanuelle Augeraud Veron & Whelsy Boungou, 2023. "The Impact of COVID-19 on Bank Profitability: Cross-Country Evidence," Post-Print hal-03940242, HAL.
    • Handle: RePEc:hal:journl:hal-03940242
    DOI: 10.2139/ssrn.4318881
    as

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    Keywords

    COVID-19; Vaccination; Bank profitability;
    All these keywords.

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G2 - Financial Economics - - Financial Institutions and Services

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