Table 1. Measures, notation and expected... | Emerald Publishing

Table 1.

Measures, notation and expected effect of the explanatory variables of Model (2) on bank profitability

Variable	Measure	Notation	Expected effect
Profitability	Net profit after tax divided by average total assets	ROAA
Capital	Equity/Assets	EA	Positive
Credit risk	Loan loss provisions/Total loans	CR	Negative
Deposits	Deposits/Assets	DEP	Negative
Liquidity	Cash and other liquid assets/Total assets	LIQ	Negative
Productivity	Revenue per employee	PROD	Positive
Expense control	Operating expenses/Total Assets	EC	Negative
Size	Real Assets and log of real assets	SZ	?
Concentration	Five-bank asset-concentration	CON	Negative
Inflation	Current inflation rate, bank rate or 10-year government bond rate	INF	Positive
Cyclical output	Deviations of actual output from segmented trend	CO*	Positive
Loan growth	Annual growth of gross loans	LG	Positive

Variable	Measure	Notation	Expected effect
Profitability	Net profit after tax divided by average total assets	ROAA
Capital	Equity/Assets	EA	Positive
Credit risk	Loan loss provisions/Total loans	CR	Negative
Deposits	Deposits/Assets	DEP	Negative
Liquidity	Cash and other liquid assets/Total assets	LIQ	Negative
Productivity	Revenue per employee	PROD	Positive
Expense control	Operating expenses/Total Assets	EC	Negative
Size	Real Assets and log of real assets	SZ	?
Concentration	Five-bank asset-concentration	CON	Negative
Inflation	Current inflation rate, bank rate or 10-year government bond rate	INF	Positive
Cyclical output	Deviations of actual output from segmented trend	CO*	Positive
Loan growth	Annual growth of gross loans	LG	Positive