Research-Thesis: The Influence of Ownership Structure on Financial Performance in European Listed Banks.

Abstract

This study investigates the relationship between ownership concentration and the financial performance of European listed banks over the period 2010–2024. The objective is to determine whether ownership concentration is associated with bank performance and whether this relationship differs according to banks’ capitalization levels. The analysis is motivated by the important role of corporate governance in banking, where information asymmetry, risk exposure, and regulatory supervision intensify agency problems between shareholders and managers. The study is based on a panel dataset of 117 European listed banks collected from Refinitiv. Financial performance is measured using both accounting-based indicators (ROA and ROE) and a market-based indicator (Tobin’s Q). Fixed effects panel regressions are applied in order to control for unobserved heterogeneity across banks and over time. Additional analyses are conducted by separating the sample into low-capitalized and high-capitalized banks based on the median capital ratio. The empirical findings indicate that ownership concentration does not exert a significant or systematic influence on bank performance across the full sample. No significant relationship is identified between ownership concentration and ROA, ROE, or Tobin’s Q in the baseline regressions. However, the additional analyses reveal that ownership concentration becomes positively and weakly significantly associated with ROE among highly capitalized banks, while no significant effect is observed among low capitalized institutions. Overall, the results suggest that ownership concentration should not be considered a universally effective governance mechanism in banking. Instead, its effectiveness depends on bank-specific financial and regulatory conditions. The study therefore contributes to the corporate governance literature by highlighting the heterogeneous and context-dependent nature of the ownership performance relationship within the European banking sector.