Drivers of bank profitability: Case of Latvia and Lithuania

The issues regarding measuring and managing bank performance are always on the agenda due to the critically important role of banks in the national economies of new member states of the European Union. The goal of the given study is to explore drivers of bank profitability in Latvia and Lithuania. Research period covers 2008–2014. Performance of the banking sector is proxied by profitability ratios. The set of explanatory factors involves financial and non-financial measures. The core research method is a multiple regression analysis. Data processing is performed in SPSS environment. The paper contributes to the scope of knowledge regarding bank performance drivers and the research results provide the basis for the future studies in the related field.