The relationship between non-performing loans, banking system stability and economic activity: The case of Tunisia

Dorsaf Elbir Merhbene ()
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Dorsaf Elbir Merhbene: Central Bank of Tunisia

No 03-2021, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: This study seeks to determine the relation between non-performing loans (NPLs) and bank profitability in Tunisia. This relation appears non-linear. We estimate a threshold of NPLs using an econometric framework. We examine the determinants affecting profitability over the Q4 2010 - Q4 2019 period for 10 Tunisian banks by estimating a model showing the impact of NPLs on bank profitability. The results indicate that banks with lower non-performing loan tend to have higher profitability.

Keywords: NPLS; banking profitability (search for similar items in EconPapers)
JEL-codes: E58 G21 P34 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2021-02-24
New Economics Papers: this item is included in nep-ara, nep-ban, nep-isf and nep-mac
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gii:giihei:heidwp03-2021

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