TY - BOOK ID - 65575434 TI - Breaking the Bank? A Probabilistic Assessment of Euro Area Bank Profitability AU - Elekdag, Selim. AU - Malik, Sheheryar. AU - Mitra, Srobona. PY - 2019 SN - 1513522264 1513516140 1513522256 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Eurozone. KW - Bank profits. KW - Europe. KW - Gay culture Europe KW - Europe KW - Bank earnings KW - Profit KW - Euro area KW - Euro zone KW - Monetary unions KW - Banks and Banking KW - Finance: General KW - Macroeconomics KW - Industries: Financial Services KW - Banks KW - Depository Institutions KW - Micro Finance Institutions KW - Mortgages KW - General Financial Markets: Government Policy and Regulation KW - Personal Income, Wealth, and Their Distributions KW - Interest Rates: Determination, Term Structure, and Effects KW - Financial Institutions and Services: Government Policy and Regulation KW - Finance KW - Banking KW - Financial services law & regulation KW - Bank soundness KW - Nonperforming loans KW - Personal income KW - Yield curve KW - Financial sector policy and analysis KW - Financial institutions KW - National accounts KW - Financial services KW - Loan loss provisions KW - Financial regulation and supervision KW - Banks and banking KW - Loans KW - Income KW - Interest rates KW - State supervision KW - France UR - https://www.unicat.be/uniCat?func=search&query=sysid:65575434 AB - This paper explores the determinants of profitability across large euro area banks using a novel approach based on conditional profitability distributions. Real GDP growth and the NPL ratio are shown to be the most reliable determinants of bank profitability. However, the estimated conditional distributions reveal that, while higher growth would raise profits on average, a large swath of banks would most likely continue to struggle even amid a strong economic recovery. Therefore, for some banks, a determined reduction in NPLs combined with cost efficiency improvements and customized changes to their business models appears to be the most promising strategy for durably raising profitability. ER -