The Determinants of the Profitability of the Tunisian Deposit Banks

Abstract

Thanks to the study of twelve Tunisian deposit banks, the researchers were able to identify the influence of these determinants on the bank profitability, using a technique of panel data over the period of 1995-2005. The empirical results suggest that the bank capitalization, as well as the size, have a positive and significant effect on the bank profitability. The empirical results indicate that the variables of financial structure, the ratio of the bank assets to the GDP and that of the stock market capitalization to the banking assets have a negative and a statistically significant effect. As for the impact of the macroeconomic indicators, the researchers conclude that the variables do not have a significant effect on bank profitability. Finally, the results indicate the substitutability between banks and financial markets.

The Profitability and Performance Measurement of U.S. Regional Banks Using the Predictive Focus of the “Fundamental Analysis Research”

“…Studies, finding that the larger the share of loans on the balance sheet the greater will be the bank's profitability, include Francis (2013), Gul et al (2011), Karimzadeh et al (2013), Lee (2012), Mamatzakis and Remoundos (2003), Olson and Zoubi (2011), Ramadan et al (2011), Sastrosuwito and Suzuki (2012), Sufian (2011), Sufian and Habibullah (2009), Trujillo-Ponce (2013), and Zimmerman (1996. In other studies, this relationship failed to reach significance (Almumani, 2013;Alp et al, 2010;Athanasoglou et al, 2006;Ayadi & Boujelbene, 2012;Ayaydin & Karakaya, 2014;Ben Naceur & Goaied, 2008;Chantapong, 2005;Javaid et al, 2011;Lee, 2012;Liu & Wilson, 2010;Rachdi, 2013;Saeed, 2014;Tan & Floros, 2012). In other studies, the relationship of the size of the credit portfolio and profitability was negative (Aburime, 2008;Chronopoulos et al, 2012;Demirguc-Kunt & Huizinga, 1999;Heffernan & Fu, 2008;Lee & Hsieh, 2013;Mirzaei & Mirzaei, 2011;Naseem et al, 2012;Raza et al, 2013;Staikouras & Wood, 2004;Sufian & Noor, 2012;Vong & Chan, 2009;Wall, 1985).…”

“…Thus, the relationship between size and profitability may be nonlinear or ambiguous. Studies have found a positive relationship between size and profitability (Agustini, 2011;Alexiou & Sofoklis, 2009;Al-Jafari & Alchami, 2014;Alper & Anbar, 2011;Alp et al, 2010;Athanasoglou et al, 2006;Ayadi & Boujelbene, 2012;Gul et al, 2011;Jabbar, 2014;Karimzadeh et al, 2013;Khrawish, 2011;Lee, 2012;Mirzaei & Mirzaei, 2011;Naseem et al, 2012;Sufian & Noor, 2012;Zimmerman, 1996). Others report a negative relationship (e.g., Ameur & Mhiri, 2013;Kosmidou et al, 2005;Lee & Hsieh, 2013;Macit, 2012;Pasiouras & Kosmidou, 2007;Perera et al, 2013;Rachdi, 2013;Sohail et al, 2013;Sufian & Chong, 2008).…”

“…Studies showing a positive relationship between capital levels and profitability include: Alp et al (2010), Ameur and Mhiri (2013), Athanasoglou et al (2005Athanasoglou et al ( , 2006, Ayadi and Boujelbene (2012), Ayaydin and Karakaya (2014), Ben Naceur and Goaied (2008); Bourke (1989), Demirguc-Kunt and Huizinga (1999), Dietrich and Wanzenried (2011), Flamini et al (2009), Francis (2013, Garcia-Herrero et al (2009), Jabbar (2014, Javaid et al (2011), Kanas et al (2012), Khrawish (2011), Kosmidou et al (2005), Lee (2012), Lee and Hsieh (2013), Liu and Wilson (2010), Macit (2012), Mamatzakis and Remoundos (2003), Mirzaei and Mirzaei (2011), Molyneux and Thornton (1992), Olson and Zoubi (2011), Ongore and Kusa (2013), Pasiouras and Kosmidou (2007), Perera et al (2013), Poposka and Trpkoski (2013), Ramadan et al (2011), Saeed (2014, Sastrosuwito and Suzuki (2012), Shen et al (2009), Sufian and Chong (2008), Trujillo-Ponce (2013), van Ommeren (2011), Vong and Chan (2009), Wahidudin et al (2013, Wall (1985), and Zimmerman (1996). Studies finding a negative relationship include:…”

Performance and Profitability of Islamic Banks in Saudi Arabia: An Empirical Analysis

“…Thus, the relationship between size and profitability may be nonlinear or ambiguous. Studies have found a positive relationship between size and profitability (Zimmerman, 1996;Athanasoglou et al, 2006;Athanasogloua et al, 2008;Alexiou and Sofoklis, 2009;Alp et al, 2010;Agustini, 2011;Alper and Anbar, 2011;Gul et al, 2011;Khrawish, 2011;Mirzaei and Mirzaei, 2011;Ayadi and Boujelbene, 2012;Lee, 2012;Naseem et al, 2012;Sufian and Noor, 2012;Karimzadeh et al, 2013;Al-Jafari and Alchami, 2014;Jabbar, 2014).…”

Exchange Rate Volatility, Global Market Exposure and Operational Efficiency among US Commercial Banks

“…For instance, in an earlier study focusing on the relationship, Afanasieff, Lhacer and Nakane (2002) concluded that inflationary conditions have negative impact on net interest margins; this conclusion supported earlier findings by Saunders and Schumacher (2000) in a related analysis. Additionally, in a recent study verifying similar relationship among Tunisian deposit banks, Ayadi and Boujelbene (2012) also showed that Inflationary conditions have negative impact on profitability among banks studied. Schwaiger and Liebig (2008) further made a strong case for the role of macroeconomic conditions by showing that banks perform better in periods of significant growth characterized by relatively high investment and consumption growth, and growth in credit supply.…”