ISSN: 2056-3736 (Online Version) | 2056-3728 (Print Version)

Performance of the Greek banking sector pre and throughout the financial crisis

Iliana G. Chatzi, Mihail N.Diakomihalis and Evangelos Τ. Chytis

Correspondence: Mihail N.Diakomihalis,

Department of Accounting and Finance, Technological Educational Institute of Epirus, Greece

pdf (782.55 Kb) | doi:


This study provides an in depth comparative analysis among Greek Commercial Bank institutions listed in Athens Stock Exchange Market, during time period from 2006 to 2012. The analysis is based on CAMEL methodology. The period 2007 to 2009 is characterized by high profitability, liquidity and high capital adequacy. However, the eruption of the economic crisis in Greece during 2009 and its ominous impacts is revealed on the bank financial statements and reports. The results derived from the CAMELS evaluation have been cross-tested using the Fixed Effects Model in a panel data analysis, which verify that before crisis the traditional ratios of are statistically significant, while the Sensitivity and Liquidity variables appeared to be the only rating components that provide insights into the banks financial situation during the crisis period. We conclude that changes in the economic environment and the emergence of new risks should be considered from both, bank managers and regulators, by the implementation and evaluation of Banks’ rating system.


  Camels, Economic crisis, Greece, Banking sector, Efficiency analysis


Al-Tamimi, H. (2010). Factors influencing performance of the UAE Islamic and conventional national banks. Global Journal of Business Research, 4(2), 1-9. Retrieved on 30 August 2014 from

Ayadi, N., & Boujelbene, Y. (2012). The determinants of the profitability of the Tunisian deposit banks. IBIMA Business Review. Retrieved 16 November 2012 from

Baltagi, B. H., (1995) Econometric Analysis of Panel Data. New York: John Wiley and SonsBordeleau, E., & Graham, C. (2010). The impact of liquidity on bank profitability (Working Paper No.2010-38). Bank of Canada. Retrieved 12 September 2014 from, R. (2004). Macroeconomic determinants of the banking financial performance and resilience in Singapore. (No. 38). Monetary Authority of Singapore (MAS) Staff Paper. Retrieved on 6 September 2014 from Α., Ntokas I., (2012) Issues of Banking and Financial Theory, Kritiki Editions, Athens (in Greek).Dash, M., Das, A. (2009). A CAMELS Analysis of the Indian Banking Industry., D., Sadguna, I. G. M., & Zumwalt, J. K. (2002). The changing relationship between CAMEL ratings and bank soundness during the Indonesian banking crisis. Review of Quantitative Finance and Accounting,19(3), 247-260.Gerlach, S., Peng, W., & Shu, C. (2004). Macroeconomic conditions and banking performance in Hong Kong SAR: A panel data study. Journal of Banking and Finance, 17(4), 481. Greene, W. H., (1997) Econometric Analysis, third edition, New Jersey: Prentice-Hall Greene, W. H., (1998) LIMDEP Version 7.0, Econometric Software, Inc. Plainview, NYGreenberg, J., & Simbanegavi, W. (2009). Testing for competition in the South African banking sector. Retrieved on 4 September 2014 from, G., Salamouris, D., 2004. Efficiency measurement of the Greek commercial banks with the use of financial ratios: a data envelopment analysis approach. Management Accounting Research. 2(2004) 201-224Heffernan, S., & Fu, M. (2008). The determinants of bank performance in China. Retrieved on 22 October 2014 from 0009/77823/China-BkPerformance-Final- 4July-08.pdfIfeacho, C., & Ngalawa, H. (2014). Performance Of The South African Banking Sector Since 1994. Journal of Applied Business Research (JABR), 30(4), 1183-1196Khrawish, H. (2011). Determinants of commercial banks performance: Evidence from Jordan.International Research Journal of Finance and Economics, 81. Retrieved on 2 June 2014 from http://www.internationalresearchjournaloffinanceandeconomics.comKosmidou, K., Zopounidis, C. (2008). Measurement of bank performance in Greece. South – Eastern Europe Journal of Economics. 1, (2008)79-95Kouser, R., & Saba, I. (2012). Gauging the financial performance of the banking sector using CAMEL model: Comparison of conventional, mixed and pure Islamic banks in Pakistan. International Research Journal of Finance and Economics, 82. Retrieved on 5 May 2014 from

Kumpirai, M., Webb, R. (2010). A Financial Ratio Analysis of Commercial Bank Performance in South Africa. African Review of Economics and Finance. Vol 2, No1.Naceur, S., & Kandil, M. (2009). The impact of capital requirements on banks’ cost of intermediation and performance: The case of Egypt. Journal of Economics and Business, 61, 70-89.Ncube, M. (2009, July). Efficiency of the banking sector in South Africa. Paper presented at the African Economic Conference, Johannesburg. Retrieved on 29 August 2014 from, S., Williams, H., & Emerah, A. (2012). An empirical analysis of capital adequacy in the banking sub-sector of the Nigeria economy. International Journal of Economics and Finance, 4(5), 208Oladele, P., & Sulaimon, A. (2012). Determinants of bank performance in Nigeria. International Journal of Business and Management Tomorrow, 2(2).Oladejo, M., & Oladipupo, A. (2011). Capital regulation and the performance of the Nigerian banks: Need for review. Journal of Emerging Trends in Economics and Management Sciences (JETEMS), 2(3), 215-224.Pasiouras, F., 2008. Estimating the technical and scale efficiency of Greek Comercial banks: The impact of credit risk, off-balance sheet activities, and international operations. Research in International Business and Finance 22 (2008) 301–318.Řepková Iveta (2012) Market Power in the Czech Banking Sector, Journal of Competitiveness Vol. 4, Issue 1, pp. 143-155, DOI: 10.7441/joc.2012.01.11Rezitis, A., 2006. Productivity growth in the Greek banking industry: a non – parametric approach. Journal of Applied Economics. 9(1) (2006)119 – 138.Said, R., & Tumin, M. (2011). Performance and financial ratios of commercial banks in Malaysia and China. International Review of Business Research Papers, 7(2), 157-169.Sangmi, M., & Nazir, T. (2010). Analyzing financial performance of commercial banks in India: Application of CAMEL model. Pakistan Journal of Commerce and Social Sciences, 4(1), 40-55.Schiniotakis, N. (2012). "Profitability factors and efficiency of Greek banks". EuroMed Journal of Business, Vol. 7 Iss: 2, pp.185 – 200Shipho, T., & Olweny, T. (2011). Effects of banking sectoral factors on the profitability of commercial banks in Kenya. Economics and Finance Review, 1(5), 1-30. Retrieved on 11 August 2014 from, C., Tziogkidis, P., 2010. How do Greek banking institutions react after significant events?—A DEA approach. Omega. 5 (2010) 294-308Sufian, F., & Habibullah, M. (2010). Does economic freedom foster banks’ performance? Panel evidence from Malaysia. Journal of Contemporary Accounting & Economics, 6, 77-91. Retrieved on 28 August 201412 from, E.G., Lolos, S.E.G., Christopoulos, D.K., 2003. The performance of the Greek banking system in view of the EMU: results from a non-parametric approach. Econ. Model. 20, 571–592.Varias, A., Sofianopoulou, S. (2012). Efficiency evaluation of Greek commercial banks using data envelopment analysis. Lectures Notes in Management Science. 2012, Vol. 4, pp. 254-261Vasiliou D., Iriotis N. (2008) Financial Management, Theory and Practice, Rosili Editions, Athens (in Greek).