Bank supervision and bank profitability: the case of MENA countries

Abdennour, Faouzi; Khediri, Karim Ben

doi:10.1504/ijmef.2010.035594

Cited by 5 publications

(1 citation statement)

References 18 publications

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“…The Middle East and North Africa (MENA) area, where banks still constitute the major part in providing financial services (Abdennour and Khediri, 2010), is one region of the global economy where the evolution of banks’ credit risk has been relatively under-researched (Ghosh, 2018). Unlike other regions of the world, a distinctive feature of MENA countries is their exceedingly close interaction with the commodity of oil.…”

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confidence: 99%

Oil prices and bank credit risk in MENA countries after the 2008 financial crisis

Wang

Luo

2020

IMEFM

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Purpose The purpose of this paper is to investigate the oil price–bank risk nexus by considering the heterogeneity of bank characters. Design/methodology/approach This paper empirically tests the effect of oil price movements on bank credit risk by using a sample of 279 banks in the Middle East and North Africa countries from 2011 to 2017. Findings Authors find robust evidence that the credit risk of bank loan portfolios is negatively associated with increased oil prices. The heterogeneity analysis indicates that the effect of asset quality improvement brought about by rising oil prices is more salient in conventional banks, and banks with small size, low liquidity and whose funding source relies on customers’ deposits. Practical implications The results favor the diversification of bank funding sources, the improvement of a country’s financial development, the adoption of explicit deposit insurance and macroprudential policies, such as countercyclical liquidity buffers, to weaken the adverse impact of oil prices declines. Originality/value The present paper enriches the literature of oil price–bank risk nexus by analyzing the heterogeneity of bank characters and advances our knowledge on the determined factors of bank riskiness and vulnerability.

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Section: Introductionmentioning

confidence: 99%

Oil prices and bank credit risk in MENA countries after the 2008 financial crisis

Wang

Luo

2020

IMEFM

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Bank Supervision and bank’s Outcomes: The Case of Tunisia

Belgacem,

Hadriche,

Belhaj

2024

Journal of African Business

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The effect of financial soundness variables on bank performance: a macro-level analysis in MSCI Emerging Market Index countries

Arzova

Şahin

2023

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PurposeThe present study investigates the impact of financial soundness variables on bank performance in emerging countries.Design/methodology/approachThis study uses macro-level panel data from 17 countries from 2011 to 2020. The analysis adopts six models. While four models include bank profitability, the dependent variable of the other models is Bank Z Scores. Regulatory Capital to Risk-Weighted Assets, Liquid Assets to Total Assets, Non-Performing Loans to Total Gross Loans and Non-Interest Expenses to Gross Income are proxies of financial soundness variables.FindingsThe authors estimate fixed and random effects models with the Arellano, Froot and Rogers methods. Empirical results show that Non-Performing Loans to Total Gross Loans harm ROA and ROE. Regulatory Capital to Risk-Weighted Assets negatively affects ROE. Non-Interest Expenses to Gross Income on Bank Z Scores have a significant and negative effect. Moreover, Inflation, Foreign Direct Investment and GDP are macroeconomic variables that increase bank profitability.Originality/valueThis study contributes to the literature in different aspects. The first is the model of the study. The authors contribute to the literature regarding the variables used to measure financial soundness. Secondly, emerging countries are samples in the study. A significant part of the studies on financial soundness has focused on developed countries. Finally, the authors analyze the macro-level data. Bank soundness studies mainly investigate country-level variables. Macro-level analysis may provide an advantage in combating global financial crises.

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Bank supervision and bank profitability: the case of MENA countries

Cited by 5 publications

References 18 publications

Oil prices and bank credit risk in MENA countries after the 2008 financial crisis

Oil prices and bank credit risk in MENA countries after the 2008 financial crisis

Bank Supervision and bank’s Outcomes: The Case of Tunisia

The effect of financial soundness variables on bank performance: a macro-level analysis in MSCI Emerging Market Index countries

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