Authors: Iveta Palečková; Pavla Klepková Vodová
Addresses: School of Business Administration in Karviná, Silesian University in Opava, Univerzitní nám. 1934/3, 733 40 Karviná, Czech Republic ' School of Business Administration in Karviná, Silesian University in Opava, Univerzitní nám. 1934/3, 733 40 Karviná, Czech Republic
Abstract: The aim of the paper is to choose which financial ratios are the most suitable for inclusion into the aggregate financial stability index for commercial banks, to examine the selected aspects of the financial stability and performance of the Czech commercial banks and their parent companies with the use of chosen financial ratios, and to construct aggregate financial stability index. We examined the aspects of financial stability of the Czech commercial banks and their parent companies. We focused on several aspects of financial stability: the banking profitability, efficiency, liquidity, solvency and asset quality. Results show that Czech subsidiaries were more profitable, solvent and liquid than their parent companies. Nevertheless, the Czech subsidiaries are less efficient than parent companies. Finally, we created the new aggregate financial stability index.
Keywords: profitability; efficiency; DEA; data envelopment analysis; solvency; liquidity risk; assets' quality; financial stability; commercial bank; financial conglomerate; Czechia.
International Journal of Monetary Economics and Finance, 2021 Vol.14 No.1, pp.23 - 34
Received: 29 Nov 2019
Accepted: 02 Sep 2020
Published online: 26 Feb 2021 *