MARKET POWER, STABILITY AND BANK PROFITABILITY: EVIDENCE FROM SLOVAKIA
MARKET POWER, STABILITY AND BANK PROFITABILITY: EVIDENCE FROM SLOVAKIA

Summary/Abstract: The banking sector, as a part of the financial market, influences the wholefinancial market but also the economy of whole country. It is necessary to analysisthe situation of the banking sector and it is regulated by national banks. The Slovakbanking sector is considered to be the one of the most stable in Europe because Slovakbanks have enough own resources. The main aim of the banks is to achieve profit,which is influenced not only by customer preferences but also by changes in stabilityor competition between banks. The aim of the paper is to analyse, how changes incompetition and bank stability affect their profitability. Using the annual data from thedetailed balance sheets of the banks that operated in the years from 2005 to 2016, weanalysed the relationship between variables. In examining this relationship we usedtwo methods - Granger causality and linear regression.

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