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The Determinants of Banking Performance in Front of Financial Changes: Case of Trade Banks in Tunisia

Author

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  • Makram Nouaili

    (Higher Institute of Management, Gabes University, Tunisia,)

  • Ezzeddine Abaoub

    (College of Administrative and Financial Studies, Taif University, Saudi Arabia,)

  • Anis Ochi

    (Faculty of Economic Science and Management of Tunis, Tunis El Manar University, Tunisia.)

Abstract

The banking sector in Tunisia has undergone, in the past decades, numerous structural changes which have affected the banking industry in particular and the economy as whole. This paper studies the internal and external determinants of bank performance in Tunisia during the period after financial reforms. We used regression analysis and panel data technique with the linear model of Bourke (1989) and followed the methodology employed by Demirg -Kunt and Huizinga (1999) and Dietrich and Wanzenried (2011) in order to address the issue. The empirical results showed that bank performance is positively related with capitalization, privatization and quotation. While, bank size, concentration index and efficiency are negatively related with performance indicators (measured by net interest margin, LIQ, return on assets and return on equity). As for the macroeconomic determinants, our analysis showed that the business cycle, measured by the growth of the gross domestic product is supposed to be favorable to the improvement of the performance of the banks and negative relationship was found with inflation rate.Those variables have to arouse the interest of the decision-makers of economic and restructuring policies to direct their strategies and aiming corrective actions to promote the performance of banking and financial systems.

Suggested Citation

  • Makram Nouaili & Ezzeddine Abaoub & Anis Ochi, 2015. "The Determinants of Banking Performance in Front of Financial Changes: Case of Trade Banks in Tunisia," International Journal of Economics and Financial Issues, Econjournals, vol. 5(2), pages 410-417.
    • Handle: RePEc:eco:journ1:2015-02-10
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    2. Teodor HADA & Nicoleta BARBUTA-MISU & Teodora Maria AVRAM, 2018. "Performance of manufactured and sold goods by direct costing method," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 95-103.
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    More about this item

    Keywords

    Financial Performance; Determinant; Interest Margin; Profitability; Tunisia; Panel Data;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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