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

Journal of African Business, Vol. 18, No.2, pp.143-168 (2017)

35 Pages Posted: 6 Jan 2017 Last revised: 13 Mar 2017

See all articles by Peterson K Ozili

Peterson K Ozili

University of Essex - Essex Business School; Central Bank of Nigeria

Date Written: March 1, 2017

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 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.

Keywords: Bank profitability, Africa, Listed Banks, Panel Regression, Capital Regulation, GMM dynamic panel, Bank regulation, Captial Markets

JEL Classification: E44, G21

Suggested Citation

Ozili, Peterson Kitakogelu, Bank Profitability and Capital Regulation: Evidence from Listed and Non-Listed Banks in Africa (March 1, 2017). Journal of African Business, Vol. 18, No.2, pp.143-168 (2017). Available at SSRN: https://ssrn.com/abstract=2893830

Peterson Kitakogelu Ozili (Contact Author)

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Central Bank of Nigeria ( email )

Plot 33, Abubakar Tafawa Balewa Way
Central Business District, Cadastral Zone
Abuja
Nigeria

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