Valentina Flamini, Calvin McDonald, Liliana Schumacher|
International Monetary Fund (IMF)|
The Determinants of Commercial Bank Profitability in Sub-Saharan Africa
Public|
Printed: Yes
This paper examines the profitability of banks in Sub-Saharan Africa (SSA). A sample of 389 banks in 41 SSA countries was used for this study. High asset returns and credit risk are correlated activity diversification, larger bank size, and private ownership. Macroeconomic variables are found to affect bank returns. Granger causality from asset returns to capital occurs with a substantial time lag. The paper concludes by suggesting an imposition of higher capital requirements in the region to strengthen financial stability.
Report type
Partner Resources
Themes
State owned Financial Institutions
Region
Sub-Saharan Africa
