BANK PROFITABILITY FACTORS: A COMPREHENSIVE SYSTEMATIC REVIEW

Abstract

Globalization, the economic downturn, a pandemic, and several other crises have affected the banking industry over the past 20 years, yet it has persevered. This had caught academicians' and practitioners' attention. By evaluating existing scientific works, the current paper investigates the trends and directions of research on the idea of profitability in banks.

 A systematic literature review approach is used in this study. First, a list of keywords was established. Next, papers from the Scopus database covering the months of January 2009 through June 2024 were found using the keywords. The PRISMA selection method was used to filter and screen the identified articles. In the end, 59 papers were found that address the research issue.

The primary research streams on bank profitability were determined by the study based on the examination of scientific literature. External parameters including GDP, inflation, and currency rates were evaluated, as well as bank-specific characteristics like bank size, liquidity, operational efficiency, capital adequacy, asset quality, and credit risk.

 On the other hand, there are notable discrepancies in academic study findings about the connection between research streams and profitability over time. The paper suggests theoretical and practical ramifications for academicians based on the results. Bankers, policymakers, and practitioners. The profitability of banks is obviously significantly impacted by internal issues. This systematic literature review fosters a deeper understanding of the intricate interactions between different factors influencing bank profitability, ultimately contributing to the stability and efficiency of the financial system. It also clearly breaks down the geographical focus of research and identifies the various methodologies used to determine determinants of bank profitability.