Background: The objective of this paper is threefold. First, we test the most important factors that determine the level of non-interest income for Tunisian banks. Second, we study the impact of non-interest income on banks' profitability measured by both return on assets (ROA) and return on equity (ROE). Finally, we investigate the relationship between non-interest income and the level of risk taking. Methods: To achieve this goal, we used annual data of 20 Tunisian banks during the period 2005-2012. In the empirical section we performed a Dynamic Panel Data model. Results: Empirical results indicate that the main determinants of non-interest income are: relative performance (RROA and RROE), bank size, loan specialization and new epayments channels, automatic teller machine (ATM) and credit cards). We also find that diversification increases bank performance for both ROA and ROE measures. Eventually, non-interest income appears to be negatively and significantly correlated with the effect on the level of risk. Conclusions: Tunisian banks are invited to more diversify their activities and do not focus only on the traditional activity. The noninterest income seems to be associated with a higher level of profitability and a lower risk.
An important part of banking literature was interested in the relationship between credit risk and bank performance. However, only few studies investigated the association between liquidity risk and bank performance. The aim of this paper is to study the effect of liquidity risk on the Tunisian bank performance. To this end, we used a sample of 10 Tunisian banks over the period 1990-2013. By applying panel data method, precisely random effect regression, results show that liquidity risk decreases significantly Tunisian bank performance. Also, findings indicate that international financial crisis and inflation act negatively and significantly on bank performance.
<p>This paper aims to develop models for foreseeing default risk of small and medium enterprises (SMEs) for one Tunisian commercial bank using two different methodologies (logistic regression and discriminant analysis). We used a database that consists of 195 credit files granted to Tunisian SMEs which are divided into five sectors “industry, agriculture, tourism, trade and services” for a period from 2012 to 2014. The empirical results that we found support the idea that these two scoring techniques have a statistically significant power in predicting default risk of enterprises. Logistic discrimination classifies enterprises correctly in their original groups with a rate of 76.7% against 76.4% in case of linear discrimination giving so a slight superiority to the first method.</p>
This paper examines the impact of credit risk, liquidity risk, and operational risk on Tunisian bank stability. These major risks continue to threaten Tunisian banks which are still developing traditional activities, despite the exhaustion of the main factors that have long sustained banking intermediation. To do this, we used data from all conventional banks operational during the period 2005-2015 and we used panel data analysis. Empirical results show that the stability of banks is closely linked to factors specific to them. It depends positively and significantly on their profitability and their liquidity risk, and negatively and significantly on their size and the interaction of both credit and liquidity risks. As for the credit risk, it has no significant impact on the stability of banks when the latter is proxied by Z-score (ROE), but it becomes detrimental in the case of Z-score (ROE). These results could be of great importance for bank managers to draw appropriate strategies in order to manage various risks facing their banks, to know how to enhance their profitability, to make adequate restructurings to enlarge their size and to rely on highly qualified managers and staff who know how to coordinate various actions and manage large institutions. Contribution/ Originality:This study is one of very few which have investigated the impact of three types of risks, incorporated in the same econometric model, on all conventional Tunisian banks using a recent database. INTRODUCTIONIn developed countries, the bank plays a dual role. It is both a financial intermediary and a service provider. By using its balance sheet, the bank provides loans to deficit agents and collects resources, mainly in the form of deposits, from surplus agents. These operations constitute the core of balance sheet intermediation. Similarly, banks intervene in various capital markets to balance their cash, limit their risks, manage portfolios of financial securities, and so on. These activities, not exclusive of others, constitute market intermediation. As a service provider, the bank provides to its customers different means of payments and takes care of their management, gives both exchange and securities services, provides advice on asset management and private banking, and offers financial engineering services, etc. However, in developing countries, the two functions are unevenly developed. The intermediation function outweighs the service delivery function. More importantly, banks continue to play a leading role in financing those Asian Economic and Financial Review
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