04092nam 2200649Ia 450 991082645170332120200520144314.01-4623-3156-41-4527-4806-31-282-84237-41-4518-7162-79786612842375(CKB)3170000000055181(EBL)1608139(SSID)ssj0000943305(PQKBManifestationID)11985090(PQKBTitleCode)TC0000943305(PQKBWorkID)10975479(PQKB)10021156(OCoLC)426149243(IMF)WPIEE2009015(MiAaPQ)EBC1608139(EXLCZ)99317000000005518120041202d2009 uf 0engurcn|||||||||txtccrThe determinants of commercial bank profitability in Sub-Saharan Africa /prepared by Valentina Flamini, Calvin McDonald, and Liliana Schumacher1st ed.[Washington D.C.] International Monetary Fund20091 online resource (32 p.)IMF working paper ;WP/09/15Description based upon print version of record.1-4519-1598-5 Includes bibliographical references.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 MarginsFigure 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 withTable 9. Estimation Results Using Random EffectsReferencesBank 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.IMF working paper ;WP/09/15.Bank profitsAfrica, Sub-SaharanBanks and bankingAfrica, Sub-SaharanBank profitsBanks and banking332.3;332.32;332.3209684Flamini Valentina1657746McDonald Calvin A1759986Schumacher Liliana1657747MiAaPQMiAaPQMiAaPQBOOK9910826451703321The determinants of commercial bank profitability in Sub-Saharan Africa4198701UNINA