Profitability Determinants of Commercial Banks: Empirical Evidence from Sub-Saharan Africa

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F22%3A43923430" target="_blank" >RIV/62156489:43110/22:43923430 - isvavai.cz</a>

Výsledek na webu

<a href="https://doi.org/10.31920/1750-4562/2022/v17n3a1" target="_blank" >https://doi.org/10.31920/1750-4562/2022/v17n3a1</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.31920/1750-4562/2022/V17N3A1" target="_blank" >10.31920/1750-4562/2022/V17N3A1</a>

Jazyk výsledku

angličtina

Název v původním jazyce

Profitability Determinants of Commercial Banks: Empirical Evidence from Sub-Saharan Africa

Popis výsledku v původním jazyce

This study attempts to fill the research gap caused by a lack of empirical studies on the determinants of commercial banks&apos;profitability in sub-Saharan Africa. The purpose of the study was to provide comprehensive knowledge of commercial banks&apos;profitability and its determinants in sub-Saharan Africa, using only bank-specific factors. The study sourced panel data from the audited financial statements of the commercial banks through the Orbis database, which covered the period 2011 to 2018. In total, 400 commercial banks in 40 countries were involved in the eight-year study, thus generating 3, 200 observations. The study employed return on average assets (ROAA) as a representation of bank profitability indicators. Bank-specific factors such as cost to income ratio (CTI), net interest margin (NIM), non-performing loan (NPL), and net income (NIC) represented the independent variables. Descriptive statistics, correlation matrix, the variance inflation factor and tolerance value were considered for the analysis. The study used multiple linear regressions to measure the impact in sub-Saharan Africa. The empirical findings revealed that net interest margin (NIM) and net income (NIC) had a significant positive impact on bank profitability, whereas the cost to income ratio and nonperforming loan (NPL) had a significant negative impact on bank profitability. The study recommended that bank managers and policymakers should develop optimum credit risk and operational costs policies to reduce the cost to income ratio and non-performing loans to improve net income and net interest margin in the sub-region.

Název v anglickém jazyce

Profitability Determinants of Commercial Banks: Empirical Evidence from Sub-Saharan Africa

Popis výsledku anglicky

This study attempts to fill the research gap caused by a lack of empirical studies on the determinants of commercial banks&apos;profitability in sub-Saharan Africa. The purpose of the study was to provide comprehensive knowledge of commercial banks&apos;profitability and its determinants in sub-Saharan Africa, using only bank-specific factors. The study sourced panel data from the audited financial statements of the commercial banks through the Orbis database, which covered the period 2011 to 2018. In total, 400 commercial banks in 40 countries were involved in the eight-year study, thus generating 3, 200 observations. The study employed return on average assets (ROAA) as a representation of bank profitability indicators. Bank-specific factors such as cost to income ratio (CTI), net interest margin (NIM), non-performing loan (NPL), and net income (NIC) represented the independent variables. Descriptive statistics, correlation matrix, the variance inflation factor and tolerance value were considered for the analysis. The study used multiple linear regressions to measure the impact in sub-Saharan Africa. The empirical findings revealed that net interest margin (NIM) and net income (NIC) had a significant positive impact on bank profitability, whereas the cost to income ratio and nonperforming loan (NPL) had a significant negative impact on bank profitability. The study recommended that bank managers and policymakers should develop optimum credit risk and operational costs policies to reduce the cost to income ratio and non-performing loans to improve net income and net interest margin in the sub-region.

Druh

J_SC - Článek v periodiku v databázi SCOPUS

CEP obor

—

OECD FORD obor

50202 - Applied Economics, Econometrics

Projekt

—

Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2022

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

African Journal of Business and Economic Research

ISSN

1750-4554

e-ISSN

1750-4562

Svazek periodika

17

Číslo periodika v rámci svazku

3

Stát vydavatele periodika

GB - Spojené království Velké Británie a Severního Irska

Počet stran výsledku

19

Strana od-do

7-25

Kód UT WoS článku

—

EID výsledku v databázi Scopus

2-s2.0-85153377061