Determine the profitability of the UK Banks after the financial crisis

Abstract

This paper investigates the determination of banks’ profitability, industry-specific and macroeconomic variables on bank profitability after the financial crisis of 2008. For this purpose, the largest five banks in the UK are selected on the basis of the availability of the required information. The empirical data for these banks is collected for the period from 2009 to 2019 from S&P capital IQ databases. The regression and correlation analyses are performed on the data and concluded that capital ratio, management efficiency and credit quality have a negative impact on ROA and NIM, while the inflation rate has a positive impact on NIM. The findings of this study can help UK banks, governments and policymakers to improve the performance of financial institutions in the future and examine the impact of the new regulations that were launched after the financial crisis on profitability.