The Determinants of Banking Stability: The Example of Tunisia

Mkadmi, Jamel Eddine; Baccari, Najwa; Ncib, Adel

doi:10.9756/iajafm/v8i1/iajafm0801

Cited by 5 publications

(16 citation statements)

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“…Table 1 lists the dependent, explanatory and control variables used in the study, as well as their associated computations. The first independent variable in our study is NIM which we found in (Mkadmi et al, 2021;Muizzuddin et al, 2021) past research as calculated by net interest income to total assets as a measure of bank profitability. NIM stands for "interest income minus interest costs divided by interest-bearing assets," and it is a measure of the profitability of the banking industry.…”

Section: Methodsmentioning

confidence: 99%

“…In our research, return on asset (ROA) is also used as a measure of bank profitability. ROA is estimated here by net income to total assets as suggested by Ali and Puah (2019), Audi et al (2021) and Mkadmi et al (2021). The influence of financial institution profitability on institutional stability was determined using NIM and ROA.…”

Section: Methodsmentioning

confidence: 99%

“…The influence of financial institution profitability on institutional stability was determined using NIM and ROA. Another independent variable we consider here is the NII ratio which measures as NII to total assets as recommended by Mkadmi et al (2021). The greater the value, the more stable the banking system is.…”

Section: Methodsmentioning

confidence: 99%

“…Moreover, the drivers of bank profitability seem to have a clear association with the stability of the banking industry (Ali, 2015;Borio, 2003;M€ orttinen et al, 2005). Nevertheless, Mkadmi et al (2021) reveal in his studies that NIM has a minor yet favorable influence on bank stability. The "margin effect", according to Martinez-Miera and Repullo (2010), suggests that reduced interest payments on loans diminish bank profits, increasing bank risk.…”

Section: Bank Stability and Bank Performancementioning

confidence: 99%

“…Because of this lack of agreement, each community bank regulator must define financial stability and determine whether it includes traditional banks, non-bank financial enterprises and shadow banks operating outside the formal financial system. However, only a few studies have been written about non-interest income (NII) and net interest margin (NIM) as a determinant of bank stability altogether (Mkadmi, Baccari, & Ncib, 2021).…”

Section: Introductionmentioning

confidence: 99%

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Bank stability, performance and efficiency: an experience from West Asian countries

Shahriar

Mehzabin

Ahmed

et al. 2022

IRJMS

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PurposeThe banking sector in West Asia has always experienced positive growth except for Palestine. Apart from some negligible outlying outcomes in some countries that have faced political crises and war, most West Asian countries have gained bank profitability and efficiency. However, the stability in the banking sector has been rarely examined in the literature. Hence, this study sheds light on examining bank stability by considering 12 countries in West Asia.Design/methodology/approachA fixed effect panel data regression analysis is employed on strongly balanced panel data using data from 2004 to 2018.FindingsResults reveal that the net interest margin has a positive relationship with bank stability. The bank’s stability rises as the net interest margin improves. Furthermore, the non-interest income reveals a positive significant impact on the stability of banks, depicting that the increase in non-interest income increases the stability of banks. Additionally, the non-interest expense also reveals positive significant results with the stability of banks. Nevertheless, leverage ratio and long-term debt portray a negative significant impact on banks’ stability. The finding reveals that higher long-term debt and leverage ratios may decrease the stability of the banks in West Asia.Practical implicationsOverall, the authors’ findings add to the literature on the stability of the banks by providing some new but significant information. Some of the recommendations may be beneficial to the long-term success of 12 Western Asian countries’ banks.Originality/valueThe study examines the stability of banks by incorporating both profitability and operating efficiency along with net-interest income, which extends to the current literature’s insight.

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Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Bank Stability and Bank Performancementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Bank stability, performance and efficiency: an experience from West Asian countries

Shahriar

Mehzabin

Ahmed

et al. 2022

IRJMS

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The effect of capital structure, operating efficiency and non-interest income on bank profitability: new evidence from Asia

Mehzabin

Shahriar

Hoque³

et al. 2022

AJEB

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PurposeThe Asian banking system has been appreciated with many distinct qualities including consistent in profitability. Many studies have examined the profitability of Asian banking sector from diverse perspectives. However, studies on bank profitability in connection to the capital structure, operating efficiency and non-interest income are only a few. This study investigates the influence of capital structure as estimated by leverage ratio and long-term debt, operating efficiency and non-interest income on the profitability of the banking industry in 28 countries of Asia.Design/methodology/approachThis paper utilizes fixed effect regression model by involving panel data with sample of 492 banks from 28 countries of Asia for the time span of 15 years from 2004 to 2018.FindingsThe results confirm that an increase in total debt ratio increases the profit margin of the bank as supported by the agency cost theory, suggesting that the debt financing increases the profitability of the firm. In addition, the findings reveal that lowering the operating expenses and managing of costs effectively can boost the profitability of bank. Furthermore, non-interest income plays a vital role when the interest rates are lower. Hence the study suggests that a careful investment in this sector can generate income as well as increase the profit margin of the banking arena.Originality/valueThe paper examines the profitability of bank by including impact of leverage ratio and long-term debt as a measure of capital structure along with the influence of operational efficiency and non-interest income which contributes to the understanding of the existing literature.

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Does green banking affect banks’ profitability?

Al-Kubaisi,

Khalaf

2023

JGR

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This paper empirically investigated the impact of green banking on the financial performance of Qatari banks. This paper collected the data for all banks in Qatar during the period 2012–2021. Specifically, the data collected included all 7 banks in Qatar and gathered data from the Refinitiv Eikon platform, the annual reports of the banks, and the relevant stock markets. Ordinary least squares (OLS) and panel regression have been applied but the fixed effect technique was interpreted because of the significance of the Hausman test. The dependent variable was the return on equity, the independent variables were size, loan loss provision, and two dummy variables as a proxy for green banking, which are: the availability of online banking and the availability of mobile applications. The results showed a positive relationship between the size and the return on equity and a negative relationship between the loan loss provision and the availability of mobile applications on the return on equity. The availability of online banking had an insignificant relationship with return on equity. This implies that larger Qatari banks tend to have larger profits and banks who estimate higher loan loss provisions are expected to have lower profitability. Surprisingly, the availability of mobile applications is found to affect profitability negatively if the cost of having the application is not covered by the noninterest charges.

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The Determinants of Banking Stability: The Example of Tunisia

Cited by 5 publications

References 0 publications

Bank stability, performance and efficiency: an experience from West Asian countries

Bank stability, performance and efficiency: an experience from West Asian countries

The effect of capital structure, operating efficiency and non-interest income on bank profitability: new evidence from Asia

Does green banking affect banks’ profitability?

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