Title: Financial crisis and Greek banks' performance variation

Authors: Mihail N. Diakomihalis; Ioanna Sagka; Iliana G. Chatzi

Addresses: Department of Accounting and Finance, Technological Educational Institute of Epirus, Psathaki, Preveza 48100, Greece ' Artotinis str. 7-9, Athens 11633, Greece ' Hellenic Open University, Ioanninon aven. 64, Preveza 48100, Greece

Abstract: This paper aims to reveal the reasons for the overall condition fluctuation of the Greek commercial bank institutions listed in Athens Stock Exchange, in the time just before and just after the financial crisis of 2008. We have examined thirteen (13) commercial bank institutions using the CAMELS rating and we have explored the findings of this analysis in the light of the major financial deals among Greek banks during the years 2006-2012 in order to reveal the true reasons that have affected their performance and their rating during the period under study. During this time, the Greek banks faced simultaneously problems such as the lack of liquidity, the capital inadequacy and the continuous reduction of their profitability, and were motivated to be engaged in business deals such as share capital increase, mergers and acquisitions. Our analysis leads to the conclusion that the CAMELS rating fluctuation of the banks' performance is strongly related to business deals, such as issuing long-term debt.

Keywords: economic crisis; Greece; banking industry; efficiency variance; CAMELS rating; financial crisis; bank performance; performance variation; commercial banks; long-term debt; bank liquidity; capital inadequacy; profitability reduction; share capital increase; mergers and acquisitions; M&A.

DOI: 10.1504/IJFSM.2016.081894

International Journal of Financial Services Management, 2016 Vol.8 No.4, pp.317 - 332

Received: 31 Oct 2015
Accepted: 02 Sep 2016
Published online: 30 Jan 2017 *

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