Determinants of Portuguese Banks’ Profitability – An Update

A new prototype of a ripening chamber was proposed in the CFD4CHEESE project aiming to evaluate the application of computational fluid dynamics in the optimization of traditional cheeses ripening conditions. With the purpose of evaluating the possible impact on the energy cost of cheese ripening in three Portuguese regions (Setúbal, Évora, and Beja), we demonstrated the potential economic benefits of the prototype. The proposed automation process would imply higher productive efficiency, reducing the consumption of water and electricity. The simple consideration of the reduction of electricity costs is enough to recover the investment needed to have the new ripening chambers, meaning that the investment is economically viable. In addition to the economic impact in firms, which are mostly small and medium firms, our results also contribute to an increase on the sustainable use of natural resources.

Objectives: The objective of this paper is to analyze the impact of issuing Green Bonds on the financial performance of European energy companies. This paper analyses the indebtedness of 30 European companies in the energy sector and verifies if there is any relationship between the Green Bonds issue and companies’ value between 2015 and 2022. Theoretical Framework: Green Bonds have been increasing their visibility in the financing market, representing an innovative debt instrument, becoming a way of reducing the pressure of bank loans and the associated financial costs. Green Bonds present themselves as an important choice for economic agents, with a positive impact on the financial performance of financed projects expected. We therefore thought it would be interesting to analyze whether green bonds have a statistically significant effect on the debt performance of European energy companies. Method: For this purpose, the Bloomberg database was used, and a sample of bonds from Euronext ESG Bonds. A Pooled OLS and Random model were applied. The software chosen for analyzing the empirical model was R Studio. The Chi-Square independence test and Cramer's V were also applied. Results and Discussion: Results indicate that in the years in which energy companies issued Green Bonds they had a better performance, measured by the ROE indicator. The internal variables TTA, LTA, STA, EAF and GAF are statistically significant in the performance (ROE) of the Energy European Companies. The Chi-Square independence test and Cramer's V degree of association between the debt and DUMMY variable were also applied. The conclusion is that when Green Bonds are issued, indebtedness decreases. Issuing Green Bonds is a more sustainable alternative to traditional sources of finance. There is a lot of research in this area, and it is quite diverse. There are researchers interested in this topic on all continents. In this sense, given the difference in Green Bonds legislation and cultural aspects, it is not always straightforward to carry out a comparative analysis of the results obtained. Research Implications: Green finance has become an important subject for researchers and promotes sustainable economic development. The goal is financing green projects, contributing to mitigation and adaptation to climate changes. Represent a resent an innovative debt instrument. In other words, it is an important choice for economic agents. Originality/Value: It's the first study of the European Union's energy companies that emit Green Bonds. It should be noted that issuing Green Bonds is not only important for environmental and sustainability issues, but also means reducing bank loans, which have high financial costs. More sustainable forms of financing are important for growth and keeping up with the changes the world is going through. Companies must be aware of these new forms of financing as routine bank loans are not always the best way to meet companies' financial needs.

The purpose of this paper is to analyse the profitability determinants of seventeen banks operating in Portugal from 2013 to 2023. The banking market has changed significantly, particularly since 2021, when Euribor grew rapidly to control inflation target. Methodologically, a hypothetical-deductive approach was used based on panel data collected from banks' published accounts. To generate results, grouped ordinary least squares were applied, as the Breusch-Pagan test confirms homoscedasticity, an essential assumption in this regression model. Internal variables considered include credit quality, capital adequacy, management quality, financial margin, and bank size, alongside an external variable, the Euribor. The findings reveal that credit risk, capital adequacy, management capacity, and Euribor are the most statistically significant for both return on equity and return on assets, with Euribor emerging as the greatest statistically significant variable. The analysis of Euribor as an explanatory variable represents the key contribution of this study relative to the existing and reviewed literature.