Analyzes of the causality between profit and efficiency in the banking sector of Ukraine

In the article on the basis of Granger test, the causal relationships between the operational efficiency of the banking business and its profitability were investigated. The results confirmed the existence of a significant difference between the correlation and the causal relationship between the variables. The causality was not found between asset returns and return on capital, but return on assets ROA according to Granger test is causal relative to the operational efficiency of the bank, which was evaluated in our case by the CIR capability. The return on assets ROA of Ukrainian banks makes a significant contribution to the forecast of the operational effectiveness CIR, while the opposite is incorrect - the CIR variable is not causal to ROA

bank efficiency; operational efficiency; ROA; ROE; CIR; bank profitability; Granger test