DETERMINANTS OF EUROPEAN BANK PROFITABILITY - A NOTE

This note examines the determinants of bank performances across eighteen European countries between 1986 and 1989. The study replicates Bourke's methodology and finds that the results do conform to the traditional US concentration and bank profitability studies. Support is found for the expense preference expenditure theories, yet no support is found for the Edwards Heggestad-Mingo risk avoidance hypothesis.