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How Business Model Shapes Bank Performance and Stability in Africa

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  • Pawessé Louis Arnaud Tamini

Abstract

This article aims to investigate the impact of a business model on bank performance and stability, with a focus on net interest margins. Using a large sample of 300 commercial banks covering 46 African countries, we define the business model by the income structure. Overall, we find that the shift toward non-interest income is associated with a decrease in net interest margins and overall performance. Besides, we observe limited, if any, impact on stability on average. Thus, our results suggest that African banks do not clearly benefit from diversification. However, the results show that ownership and size matter. JEL Codes: G21, G32, N27

Suggested Citation

  • Pawessé Louis Arnaud Tamini, 2026. "How Business Model Shapes Bank Performance and Stability in Africa," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 25(1), pages 87-113, March.
    • Handle: RePEc:sae:emffin:v:25:y:2026:i:1:p:87-113
    DOI: 10.1177/09726527251406703
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • N27 - Economic History - - Financial Markets and Institutions - - - Africa; Oceania

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