Bank diversification, governance structure and the performance of Tunisian listed banks

Abstract

This paper examines the relevance of the effect of the bank diversification and the governance structure on the performance of Tunisian listed banks. Using a sample of ten Tunisian conventional banks listed on the Tunis Stock Exchange over a period extending from 2013 to 2019, our study shows that the diversity of assets of the Tunisian banks affects positively their performance. It also identifies that the governance variables, particularly the board size, the institutional ownership and the outside directors on audit committee, play an important role in determining the performance of listed banks. These results confirm that governance matters as it amplify the positive relationship between bank diversification and profitability.