The Determinants of Commercial Bank Profitability in Sub-Saharan Africa / / Valentina Flamini, Liliana Schumacher, Calvin McDonald

• Record Nr.: UNINA9910788349203321
• Autore: Flamini Valentina
• Pubbl/distr/stampa: Washington, D.C. : , : International Monetary Fund, , 2009
• ISBN: 1-4623-3156-4; 1-4527-4806-3; 1-282-84237-4; 1-4518-7162-7; 9786612842375
• Descrizione fisica: 1 online resource (32 p.)
• Collana: IMF Working Papers
• Altri autori (Persone): SchumacherLiliana; McDonaldCalvin
• Soggetti: Bank profits - Africa, Sub-Saharan; Banks and banking - Africa, Sub-Saharan; Banks and Banking; Finance: General; Investments: Stocks; Macroeconomics; Inflation; Financial Markets and the Macroeconomy; Banks; Depository Institutions; Micro Finance Institutions; Mortgages; General Financial Markets: Government Policy and Regulation; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill; Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors; Personal Income, Wealth, and Their Distributions; Price Level; Deflation; Banking; Finance; Financial services law & regulation; Investment & securities; Bank soundness; Credit risk; Stocks; Personal income; Financial sector policy and analysis; Financial regulation and supervision; Financial institutions; National accounts; Prices; Banks and banking; Financial risk management; Income; United States
• Lingua di pubblicazione: Inglese
• Formato: Materiale a stampa
• Livello bibliografico: Monografia
• Note generali: Description based upon print version of record.
• Nota di bibliografia: Includes bibliographical references.
• Nota di contenuto: Contents; I. Introduction; II. Literature Review; III. Data and Methodology; IV. Empirical Results; V. Concluding Remarks and Some Implications for Policymakers; Figures; Figure 1. Time Series of Sub-Saharan African Countries' Return on Assets; Figure 2. Average Return on Assets by Income Group (2006); Figure 3. Sub-Saharan Africa Return on Assets by Country (2006); Figure 4. Distribution of Sub-Saharan Africa Return on Assets (2006); Figure 5. Time Series of Sub-Saharan Africa's Return on Assets by Income Group; Figure 6. Time Series of Sub-Saharan Africa's Net Interest Margins; Figure 7. Average Net Interest Margins by Income Group (2006)Tables; Table 1. Account Decomposition of Banks by Income Group; Table 2. Account Decomposition of Sub-Saharan African Banks; Table 3. Variable Definition and Notation; Table 4. Descriptive Statistics; Table 5. Estimation Results; Table 6. Sargan Test for Alternative Model with All Variables Strictly Exogenous; Control Variables Table 7. Granger-Causality Test Between Return on Asset and Capital Without; Control Variables Table 8. Granger-Causality Test Between Return on Asset and Capital with; Table 9. Estimation Results Using Random EffectsReferences
• Sommario/riassunto: Bank profits are high in Sub-Saharan Africa (SSA) compared to other regions. This paper uses a sample of 389 banks in 41 SSA countries to study the determinants of bank profitability. We find that apart from credit risk, higher returns on assets are associated with larger bank size, activity diversification, and private ownership. Bank returns are affected by macroeconomic variables, suggesting that macroeconomic policies that promote low inflation and stable output growth does boost credit expansion. The results also indicate moderate persistence in profitability. Causation in the Granger sense from returns on assets ; to capital occurs with a considerable lag, implying that high returns are not immediately retained in the form of equity increases. Thus, the paper gives some support to a policy of imposing higher capital requirements in the region in order to strengthen financial stability.