| Abstract : | The main goal of this study is to identify the determinants of profitability in the Greek banking system. Based on literature, an unbalanced panel dataset of Greek credit institutions is used over the period 1995-2010. In order to determine the factors that influence banking performance three categories of explanatory variables are included in the study the bank specific, the industry related and the macroeconomic. Estimations are made for three samples 1995-2010, pre crisis period 1995-2007 and during the crisis period 2008-2010. The results for the period 1995-2010 indicate that liquidity risk and credit risk are negatively and significantly related to bank profitability, while capital variable affects positively and significantly bank performance when both Return on Assets (ROA) and Return on Equity (ROE) ratios are used as dependent variables. Operating expenses ratio is found to have a positive impact on profitability. As for the external variables industry related do not present any significant effect on banking performance. Regarding macroeconomic variables is found that GDP per capita exerts positive influence on profitability and inflation rate negative for the period 1995-2010.
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