Abstract:

The paper aims to identify the major factors which affect the profitability of banks in selected East European countries. The empirical analysis verifies the profitability factors in 40 listed banks in Poland and Czechia. The analysed factors comprise bank size, capital adequacy, loan loss provisions, liquidity, management efficiency, lending, revenue diversification, market concentration, economic growth and inflation. The factors regarded as the most significant ones include loan loss provisions, capital adequacy and management efficiency. The multivariate analysis is based on linear mixed models.