Liquidity Risk and Bank Performance: An Empirical Test for Tunisian Banks

Hakimi, Abdelaziz; Zaghdoudi, Khemais

doi:10.5296/ber.v7i1.10524

Cited by 36 publications

(37 citation statements)

References 14 publications

(15 reference statements)

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“…Similar conclusions have been drawn by Bashir (2003), Staikouras and Wood (2004), and Sultan et al (2020). Conversely, Hakimi and Zaghdoudi (2017), based on a study of 10 Tunisian banks found a negative relationship between liquidity and bank performance. Godfrey (2015) and Farooq et al (2021) also reported similar findings in the respective studies as well.…”

Section: Liquidity Ratiosupporting

confidence: 80%

Determinants of Bank Profitability: Empirical Evidence From a Pacific Small Island Developing State

Krishna

Lingam

Mala

et al. 2021

HSSR

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Purpose: This study aims to investigate the determinants of profitability of the Fijian banks for the 2001-2019 periods. Using several bank-specific and external variables, and covering nineteen years, researchers measure the impact of each variable on Return on Average Assets, Return on Average Equity, and Net Interest Margin. Methodology: The sample of this study comprises five commercial banks and two credit financiers. Purposive sampling is employed resulting in 133 audited financial statements. Stata version 16 is used for multivariate econometric analysis and hypothesis testing. Main Findings: The results of this research show that bank size, risk, and exchange rate positively impacts bank profitability while management efficiency, broad money supply, and quality of regulation negatively affect profitability. On the other hand, the level of liquidity, economic growth, and inflation do not have any impact on profitability. Application of this study: The findings of this study can be of significance for regulators as well as financial institutions in policy development and market oversight to ensure the sustainability of financial institutions. Novelty/Originality of this study: Few studies have so far been carried out on the banking sector in Fiji with only one focusing on profitability determinants. This study, using accounting financial ratios and several macroeconomic variables is unique in the sense that it uses several external variables not considered previously.

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Section: Liquidity Ratiosupporting

confidence: 80%

Determinants of Bank Profitability: Empirical Evidence From a Pacific Small Island Developing State

Krishna

Lingam

Mala

et al. 2021

HSSR

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“…LDR coefficient showed -0.1005 which indicates that a unit change in LDR will cause an inverse change in ROE. This outcome agrees with the findings of Bassey and Moses (2015) in Nigeria as well as Hakimi (2017) in Tunisia in similar studies where financial performance and liquidity risk measured by credit deposit ratio showed negative relationship. However, the result is at variance with that of Berrio (2013) in USA and Omid & Javaid (2016) in India where the same study gave a positive relationship between loan deposit ratio and ROE.…”

Section: Results Of the Panel Data Regression Analysissupporting

confidence: 92%

Risk Management and Financial Performance of Listed Deposit Money Banks in Nigeria

Akande¹,

Salawu²

2019

theijbm

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The study examined the effect of risk management on the financial performance of Deposit Money Banks in Nigeria. The study employed ex-post-facto research design. The study population consisted of 26 DMBs from which 10 were selected using purposive sampling technique. Secondary data were collected from financial statements. Panel data regression was used to estimate the parameter coefficients. Findings revealed that Debt Equity Ratio, Asset Liability Maturity Mismatch and Capital Adequacy Ratios had significant negative, positive and negative effects on Return on Assets respectively. Loan Deposit Ratio and Type of Auditor had significant negative and positive effects on Return on Equity respectively. Also, Interbank Funding Ratio had significant positive effect on Return on Equity. Risk Asset Portfolio of the DMBs was reasonably diversified with diversification index above 0.6. Capital adequacy ratio of the DMBs averaged 0.22. The study concluded that the effective risk management among the DMBs impacted their financial performance positively. The study recommended that DMBs should determine their optimum loan-deposit mix as well as pay special attention to their balance sheet mismatch to determine the most appropriate bounds of tenors between deposit and risk assets. Also, the Central Bank of Nigeria should bring down the cash reserve ratio that restricts credit creation and causes high cost of funds. The Central Bank of Nigeria should also pay interest rate on cash reserves held by the bank.

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“…Table 1 presents the results of the credit risk, liquidity risk and insolvency risk impact on the return on equity of domestic and foreign Islamic banks in Malaysia. Concerning the fixed effect, the liquidity assets over total assets (LATA) and equity to assets (ETA) ratio showed negative and statistically significant impact on bank performance of both domestic Islamic banks in Malaysia over the study periods, which is consistent with several previous studies (Hakimi and Zaghdoudi;. This implies that one unit decreases in LATA and ETA is contributed to the one unit increase in liquidity risk in domestic Islamic banks.…”

Section: Return On Equity (Roe) Non-performing Loan (Npl) Loan Losssupporting

confidence: 88%

The Relationship of Risk Management and Bank Profitability Performance Between Domestic and Foreign Islamic Banks in Malaysia

Chong

Lam

Tan

2019

HSSR

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Purpose: This study is to determine the effects of risk management towards the domestic and foreign Islamic bank’s financial performance in Malaysia. The ten Islamic banks in Malaysia have been chosen as the sample bank in which domestic and foreign banks were equally divided. The credit risk, liquidity risk as well as solvency risk acted as the independent variables to determine the effects towards the bank’s profitability as measured by return on equity. Methodology: The panel data analysis has employed fixed effect and random effect regression models and the Hausman test in this study. Furthermore, the independent sample T-test was conducted to examine the significant difference between domestic and foreign Islamic banks. Result: The finding of this study showed that liquidity risk and insolvency risk would have a greater impact towards the Islamic bank’s profitability while the credit risk has no significant influence on Islamic bank’s financial performance in Malaysia. The study concludes that domestic Islamic banks had better financial performance as compared to foreign Islamic banks in Malaysia. Applications: This research can be used for universities, teachers, and students. Novelty/Originality: In this research, the model of The Relationship of Risk Management and Bank Profitability Performance between Domestic and Foreign Islamic Banks in Malaysia is presented in a comprehensive and complete manner.

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Liquidity Risk and Bank Performance: An Empirical Test for Tunisian Banks

Cited by 36 publications

References 14 publications

Determinants of Bank Profitability: Empirical Evidence From a Pacific Small Island Developing State

Determinants of Bank Profitability: Empirical Evidence From a Pacific Small Island Developing State

Risk Management and Financial Performance of Listed Deposit Money Banks in Nigeria

The Relationship of Risk Management and Bank Profitability Performance Between Domestic and Foreign Islamic Banks in Malaysia

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