CRISIS TO RESURGENCE: ANALYZING THE INFLUENCE OF COVID-19 ON BANK PROFITABILITY IN EUROPE

Abstract

This dissertation examines the effect of the COVID-19 pandemic on European banks' profitabil-ity. Given the banks' role at the core of financial and economic stability and recovery over time, it is important to understand how the pandemic's impact has manifested in profitability across different bank segments. This study analyses ROA, ROE, and NIM during the pre-pandemic, pan-demic, and post-pandemic periods. It also evaluates how government economic support poli-cies, including fiscal stimulus and loan moratoriums, eased the crisis’s effects. Furthermore, the study analyses bank profitability across size and capitalisation groups and investigates its impli-cations for the banking sector’s endurance throughout the pandemic and its current recovery path. The study employs various methods to reach its conclusions, ranging from descriptive sta-tistics to regression analysis, aiming to contribute to a better understanding of how European banks coped with the challenges of the world financial crisis and emerged sustainably. KEYWORDS: