In the last few years, financial managers, supervisors and policy makers have been collectively engaged on the role of the banking and financial sector in relation to environmental and sustainability issues. The efficiency level that characterizes the production process of banks and financial intermediaries is strictly interconnected with sustainability so that, from a long term perspective, cost and profit efficiency reveals to be one of the most important premises for sustainability. This work aimed to analyze the level of efficiency achieved by European banking groups to verify if some key drivers of efficiency deriving from strategic choices outlined by literature on single banks (i.e., size, number of branches, cost income ratio and geographical location) are the same when considering banking groups. The study is focused on the period 2011–2016 that is characterized by, at least, two critical events that occurred after the sub-prime crisis. The level of efficiency of each banking group was measured with the Stochastic Frontier Approach and then the units were clustered into three homogeneous sets. Observing these clusters, the results show that the groups belonging to some specific countries appear to be more efficient with respect to others. Moreover, the banking groups characterized by many branches and a high level of cost income ratio exhibit a medium level of efficiency. Eventually, the biggest banking groups are the least efficient.

Sustainability and efficiency of the European banking market after the global crisis. The impact of some strategic choices

A. G. Quaranta
2018-01-01

Abstract

In the last few years, financial managers, supervisors and policy makers have been collectively engaged on the role of the banking and financial sector in relation to environmental and sustainability issues. The efficiency level that characterizes the production process of banks and financial intermediaries is strictly interconnected with sustainability so that, from a long term perspective, cost and profit efficiency reveals to be one of the most important premises for sustainability. This work aimed to analyze the level of efficiency achieved by European banking groups to verify if some key drivers of efficiency deriving from strategic choices outlined by literature on single banks (i.e., size, number of branches, cost income ratio and geographical location) are the same when considering banking groups. The study is focused on the period 2011–2016 that is characterized by, at least, two critical events that occurred after the sub-prime crisis. The level of efficiency of each banking group was measured with the Stochastic Frontier Approach and then the units were clustered into three homogeneous sets. Observing these clusters, the results show that the groups belonging to some specific countries appear to be more efficient with respect to others. Moreover, the banking groups characterized by many branches and a high level of cost income ratio exhibit a medium level of efficiency. Eventually, the biggest banking groups are the least efficient.
2018
MDPI
Internazionale
http://www.mdpi.com/2071-1050/10/7/2237/pdf
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11393/245505
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