Table 14.
Impact of the COVID-19 pandemic on bank performance and bank stability: Alternative independent variable measures.
| Panel A: Bank performance |
Panel B: Bank stability |
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|---|---|---|---|---|---|---|---|---|---|
| Panel (i): Confirmed COVID-19 death growth |
|||||||||
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | |
| ROAA | ROAE | NIM | CIN | ZSC | NPL | PRK | LRK | ORK | |
| COVID-19-V1 | -0.316 * ** | -0.071 * ** | -0.028 * ** | -0.349 * | 0.752 * ** | 0.439 * ** | -0.314 | 0.012 | 0.184 * * |
| (0.089) | (0.020) | (0.007) | (0.192) | (0.253) | (0.087) | (0.213) | (0.034) | (0.073) | |
| Control variables | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Country FE | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Year FE | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| -3.371 * ** | -13.782 * ** | 6.653 * | -2.547 * ** | -3.597 * ** | 11.250 * ** | 8.276 * ** | 11.621 * ** | 2.183 * | |
| (1.213) | (2.559) | (3.441) | (0.698) | (1.336) | (1.746) | (1.729) | (2.275) | (1.137) | |
| Obs. | 26,377 | 26,772 | 26,209 | 26,209 | 25,856 | 25,836 | 25,634 | 25,023 | 25,453 |
| R-squared | 0.337 | 0.320 | 0.336 | 0.313 | 0.359 | 0.318 | 0.325 | 0.318 | 0.349 |
| Panel (ii): Confirmed COVID-19 cases growth | |||||||||
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | |
| ROAA | ROAE | NIM | CIN | ZSC | NPL | PRK | LRK | ORK | |
| COVID-19-V2 | -0.409 * ** | -0.258 * ** | -0.126 * * | -0.256 * * | 0.569 * ** | 0.323 * * | -0.141 | 0.271 | 0.247 * * |
| (0.118) | (0.063) | (0.055) | (0.100) | (0.108) | (0.156) | (0.107) | (0.170) | (0.117) | |
| Control variables | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Country FE | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Year FE | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| -3.032 * ** | -16.496 * ** | 5.914 * * | -4.214 * ** | -3.429 * * | 12.262 * ** | 8.356 * ** | 11.779 * ** | 2.522 * * | |
| (1.127) | (2.607) | (2.595) | (1.359) | (1.403) | (1.583) | (1.788) | (2.783) | (1.205) | |
| Obs. | 26,746 | 26,753 | 26,233 | 26,314 | 23,528 | 25,336 | 25,053 | 25,641 | 25,530 |
| R-squared | 0.346 | 0.339 | 0.358 | 0.388 | 0.392 | 0.351 | 0.350 | 0.348 | 0.332 |
This table shows how bank performance and stability respond to the COVID-19 pandemic. The sample comprises 2073 banks in 106 countries from 2016 Q1 to 2021 Q2. Panel A represents the outcomes for bank performance measured as ROA, ROE, NIM, and CIN. Panel B shows the bank stability results, which are measured as ZSC, NPL PRK, LRK, and ORK. COVID-19-V1 and COVID-19-V2 are the main explanatory variables. COVID-19-V1 indicates confirmed death growth, calculated as log(1 +number of confirmed deaths in quarter t) − log(1 + number of confirmed deaths in quarter t-1). While COVID-19-V2 shows the confirmed cases growth calculated as log(1 +number of confirmed cases in quarter t) − log(1 + number of confirmed cases in quarter t-1). We also control several bank-specific and country-specific factors, country-fixed effects, and time (quarter) fixed effects. Robust standard errors are clustered at the country level and reported in parentheses *** p < 0.01, ** p < 0.05, * p < 0.1.