Abstract
The purpose of this article is to examine the impact of selected internal and external factors on a bank’s profitability. The research investigates the impact of size; liquidity ; operating costs ; deposits ; credits ; GDP growth and inflation change of the profitability of sample of 11 banks in Tunisia for the period ( 2000…2018). The determinants were used to construct 2 models with ROA and ROE as a proxies and regression analysis using panel approach. It was found that size ; bank deposit ; operating costs ; liquidity ; economic growth have a significant impact on bank profitability measured by ( ROA and ROE).
Highlights
Since the 1980s, the banking sector has experienced significant changes
Our analysis aims to find among the profitability factors those that appear most relevant to explain the profitability of the Tunisian commercial banks and this by referring to previous studies by Bourke (1989) and Molyneux and Thornton (1992) and recently by Athanasoglou, Delis and Staikouras (2008) and Sayilgan and Yildirim (2009)
The panel data analysis allowed us to estimate the relationship between the bank profitability and a variety of explanatory factors classified into internal and external or macroeconomic variables in a sample of ten Tunisian commercial banks observed over the period 19902008
Summary
Since the 1980s, the banking sector has experienced significant changes. These rapid changes caused by the phenomenon of financial liberalization, which has emerged in the United States and that spread later in some countries of the world such as the Japan, the France, the Spain, the Turkey, the Australia,... etc, the deregulation and the technological advances increase more and more the fragility and the risk of the banking system. Since the 1980s, the banking sector has experienced significant changes These rapid changes caused by the phenomenon of financial liberalization, which has emerged in the United States and that spread later in some countries of the world such as the Japan, the France, the Spain, the Turkey, the Australia,... Nessibi / International Journal of Finance & Banking Studies Vol 5, No 1, 2016 ISSN: 2147-4486 authorization and the refinancing agreement and the liberalization of the deposit rates and the lending rates All these measures have radically transformed the environment of Tunisian banks: competition for obtaining funds and the granting of credits is amplified, the possibility given to foreign banks to settle on the banking market helped to introduce more competition in the banking system.
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