Bank Profitability and Capital Regulation: Evidence from Listed and non-Listed Banks in Africa

Ozili, Peterson K (2017): Bank Profitability and Capital Regulation: Evidence from Listed and non-Listed Banks in Africa. Published in: Journal of African Business , Vol. 18, No. 2 (21 December 2017): pp. 143-168.

Abstract

This study investigates the determinants of African bank profitability while controlling for bank capital regulation. Using static and dynamic panel estimation techniques, the findings indicate that bank size, total regulatory capital, and loan loss provisions are significant determinants of the return on assets of listed banks compared to non-listed banks. Also, regulatory capital has a more significant (and positive) impact on the return on assets of listed banks than non-listed banks particularly when listed banks have sufficient regulatory capital ratio. We also find that higher regulatory thresholds have a negative impact on the return on asset of non-listed banks.

• Item Type: MPRA Paper
• Language: English
• Keywords: Bank profitability, Africa, listed banks, panel regression, capital regulation, GMM dynamic panel
• Subjects: D - Microeconomics > D2 - Production and Organizations; D - Microeconomics > D2 - Production and Organizations > D22 - Firm Behavior: Empirical Analysis; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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