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An Analysis of the Profitability, Risk and Growth Indicators of Banks Operating in Malta

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  • Camilleri, Silvio John

Abstract

The paper consolidates the summarised financial statements of the main banks operating in Malta during the year 2002, to form a Typical Large Bank and a Typical Small Bank. The profitability, risk and growth prospects of the two institutions are analysed through Return on Equity decomposition and the use of other financial ratios. Various differences between large and small institutions emerge. In particular, larger institutions realised higher profitability and cost control; they were more capitalised in absolute terms and relied relatively less on interest income. Smaller institutions generated comparatively more revenue; they were more capitalised in relative terms, were relatively more provisioned against loan losses and held a higher proportion of liquid assets.

Suggested Citation

  • Camilleri, Silvio John, 2005. "An Analysis of the Profitability, Risk and Growth Indicators of Banks Operating in Malta," MPRA Paper 84575, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:84575
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    References listed on IDEAS

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    1. Berger, Allen N. & Humphrey, David B., 1997. "Efficiency of financial institutions: International survey and directions for future research," European Journal of Operational Research, Elsevier, vol. 98(2), pages 175-212, April.
    2. Xavier Vives, 2001. "Competition in the Changing World of Banking," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 17(4), pages 535-547.
    3. E. W. Chirwa, 2003. "Determinants of commercial banks' profitability in Malawi: a cointegration approach," Applied Financial Economics, Taylor & Francis Journals, vol. 13(8), pages 565-571.
    4. Wright, April, 2002. "The impact of competition on the operations of foreign banks in Australia in the post-deregulation period," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 12(4-5), pages 359-375.
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    Cited by:

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    2. Emhamad Elmansori & Adel S. Al-Hindawi, 2022. "The impact of organizational change strategies on competitive advantage in commercial banks in Al-Bayda City-Libya," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 11(1), pages 85-97, January.
    3. Silvio John Camilleri & Denise Ellul, 2017. "Younger Customers' Outlooks when Selecting and Changing a Financial Services Provider: The Case of Maltese Students," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 8(2), pages 51-63, April.
    4. Julius Yaw Asamoah & Linda Owusu-Agyei, 2020. "The Impact of ICT on Financial Sector Policy Reforms in Post-Financial crisis era in Ghana: An institutional theory perspective," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 9(2), pages 82-100, April.
    5. Marcin Korytowski, 2018. "Banks’ profitability determinants in post-crisis European Union," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 7(1), pages 01-12, January.
    6. Miron Vasile Cristian Ioachim & Avram (Boitos) Camelia & Mihalcea Mihaela Maria, 2017. "Profit And Loss Account – Synthetic Expression Of Absolute Return," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 191-196, August.
    7. Silvio John Camilleri & Gail Grech, 2017. "The Relevance of Age Categories in explaining Internet Banking Adoption Rates and Customers' Attitudes towards the Service," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 7(2), pages 1-2.
    8. Camilleri, Silvio John & Falzon, Joseph, 2013. "The Challenges of Productivity Growth in the Small Island States of Europe: A Critical Look of Malta and Cyprus," MPRA Paper 62489, University Library of Munich, Germany.
    9. Camilleri, Silvio John & Cortis, Justine & Fenech, Maria Diandra, 2013. "Service Quality and Internet Banking: Perceptions of Maltese Retail Bank Customers," MPRA Paper 62492, University Library of Munich, Germany.

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    More about this item

    Keywords

    Banks; Malta; Profitability; Return on Equity Decomposition; Risk.;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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