Competitiveness and Determinants of Bank Profitability in Sub-Saharan Africa

Oino, Isaiah

doi:10.5539/ijef.v7n10p151

Cited by 12 publications

(16 citation statements)

References 31 publications

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“…This result is inconsistent with previous studies that found that the bank capital has respectively significant positive and significant negative influences on ROA (Dawood, 2014;Alkhazaleh & Almsafir, 2014). Regarding ROE, results are consistent with studies that concluded negative influence (Navapan & Tripe, 2003;Goddard et al, 2004b;Mathuva, 2009;Oino, 2015), However, they are inconsistent with other studies that concluded a positive and significant influence of capital ratio on bank profitability in many countries (Demirguc-Kunt & Huizinga, 1999;Ben Naceur, 2003;Goddard et al, 2004a;Pasiouras & Kosmidou, 2007;Sufian & Habibullah, 2010;Sufian, 2011). Since the results support H1-1 B but not H1-1 A , we accept the former and reject the later.…”

Section: Findings Discussion and Conclusioncontrasting

confidence: 39%

“…Mathuva (2009) examined the relationship between capital structure and banks profitability (ROA and ROE) and he found that they are negatively correlated. Oino (2015) used a panel data of 97 sub-Saharan African banks for the period from 2000 to 2012 and found that capital ratio negatively and significantly influence profitability. The negative relationship can be explained by that increasing providers to a bank from the banks retained earnings in form of dividends will lead to reduce banks retained funds for growth purposes, which will reduce funds available to boost profit (Mathuva, 2009).…”

Section: Bank Capitalmentioning

confidence: 99%

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Financial Information Influencing Commercial Banks Profitability

Shamki¹,

Alulis²,

Sayari³

2016

IJEF

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The paper investigates the influence of bank capital ratio, size and loans on the profitability of a commercial bank in Jordan. It also evaluates whether returns on Assets (ROA) or returns on equity (ROE) is the better indicator that reflects bank profitability. Two Multiple regression models are used to test the influence of capital ratio, size and loans of a commercial bank on its profitability indicators measured by ROA and ROE and to detect the superiority between the two indicators for 13 Jordanian commercial banks for the period 2005-2013. The results of the study showed that capital ratio, size and loans have insignificant influence on ROA, but not on ROE except bank size. Regarding ROE, significant negative and positive influence for capital ratio and loans respectively are concluded. Although the small number of commercial banks in Jordan and some variables have not been well researched in literature, the paper presents a sight to associate bank performance/profitability proxied by ROA and ROE with its capital ratios, size and loans. Our results might assist bank management to capitalize the factors that could improve banks performance and hedge against the adverse factors.

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Section: Findings Discussion and Conclusioncontrasting

confidence: 39%

Section: Bank Capitalmentioning

confidence: 99%

Financial Information Influencing Commercial Banks Profitability

Shamki¹,

Alulis²,

Sayari³

2016

IJEF

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“…The authors indicated that short-term funding, non-interest earning assets, and overhead are important factors in promoting banks' profits. Oino (2015) investigated how competitive the banks in sub-Saharan Africa are and what determines their profitability. They used a panel data of 97 sub-Saharan African banks for the period from 2000 to 2012.…”

Section: Banks Profitability In Cross Country Studiesmentioning

confidence: 99%

“…The higher EQTA ratio leads to low insolvency profile and more profitability. This measure has been used as independent variable in many studies by Bashir (2003) Dietricha and Wanzenried (2009), Muda et al (2013), Elgadi and Yu (2018), Jamel and Mansour (2018), Hassan and Bashir (2005), Oino (2015) and Aliyu and Yusof (2016).…”

Section: Bank Capitalization (Equity To Assets -Eqta)mentioning

confidence: 99%

Influential Factors on Profitability of Islamic Banks: Evidence from Sudan

Mennawi¹,

Ahmed²

2020

IJEF

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Profitability of Islamic banks has a significant effect on banks current and future decisions that do not only associate with shareholders and management, but also for various types of stakeholders. Despite that, scholars are not yet in agreement on common determinants of profitability in banking industry. This study aims to investigate the effect of bank-specific and industry characteristics along with macroeconomic variable (the inflation) on the profitability of a sample of 10 Islamic banks in Sudan. The study applied descriptive statistics, Persons’ correlation and multiple regression analysis on secondary data in order to determine the relationships and degree of significant of the independent variables to profitability. The profitability has been measured by two models; as return on assets (ROA) and net profit margin (NMP). The results reveal that bank capitalization (EQTA), operational cost efficiency (OCOI), investment in short-term securities (SECA) and inflation (INF) variables are significantly affecting the profitability of Islamic banks in Sudan. In contrary, the deposit-size of the bank (as market share) is not a significant determinant of banks’ profitability. Furthermore, the results indicate that quality of credit loan (NPL) is highly significant to NPM, while it is insignificant to ROA.

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“…The need for risk management in banks stems from the core nature of the banking business which revolves more around lending. Poor assets quality and low liquidity have been seen as the two key challenges of banks (Oino, 2015). Deteriorating assets quality in the banking sector has been of global concern particularly after the 2007-2009 global financial crisis.…”

Section: Introductionmentioning

confidence: 99%

Adoption of International Financial Reporting Standards (IFRS) and Assets Quality in the Nigerian Banking Sector: The Fundamental Effect Approach

Nwaubani¹,

Okoro²

2018

JPMR

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The main purpose of this work is to examine the effect of the adoption of international financial reporting standards (IFRS) on assets quality in the Nigerian banking sector. Specifically the study sought to determine the effect of the adoption on asset quality, loan volume, , net interest income and profit after tax of deposit money banks listed on the Nigerian Stock Exchange. The adopted research design is causal-comparative. Secondary data on ten out of sixteen listed deposit money banks on the Nigerian Stock Exchange by June 2018 were used. The banks which were selected via judgmental sampling technique were those whose annual financial statements for the immediate year before IFRS adoption year were available and contained figures under Nigerian GAAP/SAS and IFRS-equivalent. The data which were analyzed using paired student t-test approach were sourced from 2011 and 2012 annual reports of the selected banks except Zenith bank for which only 2011 annual financial reports were used.. The variables of interest were grouped under Nigerian GAAP (SAS) and IFRS. Findings revealed that overall, the IFRS adoption indicates negative insignificant effect on assets quality of deposit money banks in Nigeria. The study therefore, recommends inter-alia that Financial Reporting Council of Nigeria should partner with the CBN to provide clarity on areas of regulatory hindrance to full and effective implementation of the IFRS with regular.

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Competitiveness and Determinants of Bank Profitability in Sub-Saharan Africa

Cited by 12 publications

References 31 publications

Financial Information Influencing Commercial Banks Profitability

Financial Information Influencing Commercial Banks Profitability

Influential Factors on Profitability of Islamic Banks: Evidence from Sudan

Adoption of International Financial Reporting Standards (IFRS) and Assets Quality in the Nigerian Banking Sector: The Fundamental Effect Approach

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