IDEAS home Printed from https://ideas.repec.org/a/ids/ajaafi/v3y2014i2p130-142.html
   My bibliography  Save this article

The impact of loan loss provisions on the firm valorisation: the case of the Tunisian banking sector

Author

Listed:
  • Chedli Baccouche
  • Rim Mouelhi
  • Sana Ben Ghodbane

Abstract

According to national authorities and international institutions, the prospects for growth of the Tunisian economy remain very encouraging. In order to maintain and further sustain this growth, the banking sector remains a major pillar. Taking into account the prominent role it has been playing in the mobilisation of savings, the financing of the economy and the preservation of the major internal and external balances for several years; it has benefitted from a particular attention. Our study addresses the issue of the evaluation of non-productive loans and their provisioning. With a sample of ten universal Tunisian banks which have been studied over a five year period, we concluded that there is no positive correlation between the provisions' discretionary component for bad debts and the banks' cash flow. This component is positively correlated with the market value of the banks. Insufficient provisions affect the market value of the banks and create problems which could affect the Tunisian economy.

Suggested Citation

  • Chedli Baccouche & Rim Mouelhi & Sana Ben Ghodbane, 2014. "The impact of loan loss provisions on the firm valorisation: the case of the Tunisian banking sector," African Journal of Accounting, Auditing and Finance, Inderscience Enterprises Ltd, vol. 3(2), pages 130-142.
  • Handle: RePEc:ids:ajaafi:v:3:y:2014:i:2:p:130-142
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=66112
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ajaafi:v:3:y:2014:i:2:p:130-142. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carmel O'Grady). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID==383 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.