Analysis of Factors Impacting the Negativity of the net Result of Primary Banks of the West African Economic and Monetary Union (Waemu)

Abstract

This study aims to analyse the explanatory factors of the negativity of the net result of primary banks in the West African Economic and Monetary Union (WAEMU). We collected data from the World Bank (WB) and the Central Bank of West African States (BCEAO). The data collected are annual data from 2003 to 2019 and concern all eight WAEMU countries. The analysis tools used were EXCEL and STATA 15 software. The estimation results showed that the increase in the cost of risk (CR) and the increase in general operating expenses (GOE) have a negative sign on the negative net result. Therefore, these two variables (CR and FGE) significantly positively affect the opposing net result. However, the increase in interest and similar income (IPA) has a positive sign, which leads us to say that this factor has a significant adverse effect on the opposing net result. To improve the negative net result, operational recommendations were made to primary banks in the WAEMU based on the results of our analysis.