o_19heefouak9i9v4do11ac41pi7a.pdf

KONSTANTINOS I. LOIZOS
Figure 11b: Rates of change in Investment Bank net profits, and GDP
Source: Investment Bank Annual Reports and author’s calculations
Table 12 gives a clearer picture of the situation. Observing the median rather than
the average values we conclude that Investment Bank’s net profits grew according to
more or less the same downward pattern as GDP growth rates. The distinctive characteristic
of these data compared to those of ETEBA is that financial deregulation after 1987
did not have a positive effect on the rate of change in the bank’s profitability.
Table 12: GDP growth and Investment Bank net profits
GDP growth rate (%) Investment Bank: rate of
change in net profits (%)
1965-74 1975-86 1987-2001 1964-74 1977-86 1987-97
Mean 7.71 2.73 2.55 6.40 658.14 -726.53
Median 8.95 4.15 3.30 2.95 0.00 -102.43
Std. Dev. 6.57 4.67 2.71 118.55 1971.76 1171.66
Min. -9.70 -3.90 -2.80 -275.07 -112.09 -2662.2
Max. 13.20 9.60 7.20 180.32 5908.98 28.15
Finally, Figure 11c exhibits the same data for ETBA. It is obvious from the inspection
of the graph that during the whole period of operation ETBA’s net profits in terms
of rate of change fluctuate greatly without any form of dependence on GDP growth
rates. For example, during the period 1971-73 when the Greek economy shows rates of
~ 250 ~