Determinants of the Profitability of Savings Banks in the US and the Moderating Effect of the Pandemic Crisis

The pandemic crisis that began in 2020 and lasted until 2021 has raised concerns about the impact on banking profitability. As a result, the global banking system suffered a drop in the profitability of its banking business as part of the crisis. Taking into account the problem of profitability in the banking sector, some studies have been increasingly highlighted both in academia and in the financial market. Therefore, this study aims to analyze the determinants of bank profitability for banks operating in the savings segment in the United States, for the periods between 2012 and 2022. To this end, four factors explaining profitability (default rate, liquidity, solvency and productivity) were analyzed for 57 banks. In addition, we wanted to assess the moderating effect that the pandemic crisis had on the banking sector. To obtain the results, a panel data analysis model was used, combining cross-section data (banks) and time-series data (years), and a strongly balanced panel was obtained. Four multiple linear regression models were then used and it was possible to identify liquidity and solvency as the main positive factors in bank profitability. In contrast, the factors of default rate and productivity have a negative influence on bank profitability. The results also show that banks with high default rates had greater difficulties during the period of the pandemic crisis, that is, the crisis negatively moderated the effect of default on profitability.