Factors Affecting Bank Performance: Empirical Evidence from Morocco

Abstract

This study empirically examines the effects of bank-specific characteristics, bank governance, financial market structure, and macroeconomic conditions on Moroccan banks' performance. Moroccan banks' performance is measured by return on assets (ROA) and return on equity (ROE). For this aim, panel data method (fixed effects model) is applied to data which is obtained from a sample of 6 Moroccan banks' financial statements during the period 2010-2016. The findings show that only operating management efficiency represented by the cost-to-income ratio (COST) is highly significant and negatively related to bank's performance. Also, the results indicate that bank size (SIZE) is positively related to ROA and statistically significant. Nevertheless, the effects of the other variables are statistically insignificant. The findings suggest that future studies could be include more dependent and independent variables to explain Moroccan banks' performance.

The Effect of Corporate Social Responsibility, Credit Risk, and Leverage on the Financial Performance of Commercial Banks in Indonesia

“…Value of 0.3362 and 0.8121, both> 0.05, so CAR has no significant effect on bank financial performance measured by ROA and ROE, Ha is rejected. This is not in line with research conducted by [15] but is in line with the study of [13], which shows that the CAR ratio has no significant effect on the financial performance of UAE Commercial Banks as described by ROE and ROA. Research in Indonesia [21] shows similar results where CAR does not significantly affect ROA.…”

Pengaruh Rasio Keuangan Camel Terhadap Kondisi Di Bank Perkreditan Rakyat Kabupaten Tabanan

“…Profitabilitas bank biasanya diekspresikan melalui variabel internal dan eksternal. Penentu internal dapat didefinisikan sebagai faktor-faktor yang spesifik untuk masing-masing bank, sedangkan variabel eksternal meliputi faktor-faktor yang berkaitan dengan profitabilitas dengan struktur industri, dan dengan lingkungan ekonomi makro yang mempengaruhi operasi dan kinerja sistem perbankan (Jaouad & Lahsen, 2018). Keadaan lingkungan yang berasal dari luar organisasi yang dapat mempengaruhi kinerja buruk bank contohnya adalah nasabah peminjam dana yang gagal dalam melaksanakan kewajibannya membayar kredit kepada bank, dapat menyebabkan bank mengalami kesulitan dalam melakukan perputaran dana nasabah (Zaki, et al, 2011).…”

Does financial technology matter? Evidence from an alternative banking system

“…Following prior studies (Ky et al, 2019 ;Phan et al, 2020;Mollah & Zaman, 2015), we controlled for firm-level characteristics: bank size measured by the natural logarithm of total assets (S); capital ratio; total capital to total assets (CAP); loan size, which equals total loans to total assets (LS); loan loss provisions measured by dividing loan loss provisions by total loans (LLP); income diversification, which equals non-interest income to total income (NONIN); beta; the market risk computed using the CAPM model using the prior three years of returns (monthly) (B); and IB, measured as a dummy variable that takes the value of 1 if the bank is Islamic, and 0 if otherwise (Islamic). Consistent with the previous literature (e.g., Aljughaiman & Salama, 2019;Gafoor et al, 2018;Jaouad & Lahsen, 2018), we also controlled for corporate governance variables: the board size of directors, which reflects the number of members on the board (BS); and independent directors, as the percentage of independent directors on the board (IND). In addition, we controlled for macroeconomic variables, namely gross domestic product growth rate (GDP) and inflation rate (INF), as additional controls.…”

“…Following the previous literature (Ismail, 2017;Jaouad & Lahsen, 2018;Kaneza, 2016;Mollah & Zaman, 2015), we measured banks' performance using two different aspects: the accounting aspect (return on assets [ROA]) and the market aspect (return on equity [ROE]). ROA is defined as the ability of a bank's management to generate profits from the bank's assets.…”