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
Date Written: March 1, 2017
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: Suggested Citation