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KONSTANTINOS I. LOIZOS
As can be seen in Figure 7, the evolution of this ratio is different for the three
banks. It is true that both for ETEBA and Investment Bank, the loss ratio rises
until the mid-1980s and fluctuates between 1985 and 1992-93. However, during
this last period, ETEBA maintains a much higher ratio than Investment Bank.
The ratio for ETEBA falls during the 1990s. The picture is different for ETBA
whose loss ratio, surprisingly, falls during the 1980s despite the burden of problematic
enterprises that constituted a substantial proportion of its portfolio. Finally,
throughout the decade of the 1990s the loss ratio for ETBA does not exhibit
any persistent rising or falling pattern. Despite the specific picture for ETBA, it
seems that the banks made substantial provision for losses arising from the longterm
loans extended until the late 1980s, while the period of financial liberalization
–especially from the early 1990s onwards– was deemed safer at least as far as
their provision for losses was concerned.
Figure 7: Loss ratios
Source: Author’s calculations
Table 7 gives a clearer period-by-period picture. Loss ratio increases in the case
of ETEBA by, on average, about 133% between the first two periods and remains
stable, on average, between the second and the third period. On the other hand,
although Investment Bank increases its ratio by 250% in the crisis years its ratio
of provision over earning assets falls, on average, by 14% in the last period. Finally,
ETBA is the only bank whose ratio, on average, falls consistently during the
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