Evaluating profitability strategies and the determinants of the risk performance of sectoral and banking institutions

Walter Amedzro St-Hilaire and Patrick Boisselier

Journal of Economic and Administrative Sciences, 2018, vol. 34, issue 3, 174-186

Abstract: Purpose - The purpose of this paper is to evaluate the need to incorporate the loan loss provisions (LLPs) and risk measures in order to examine the repercussions on advancing approach and profitability. Design/methodology/approach - The study investigates the effect of explanatory variables on profitability and advancing approach of the banks. The variables used in this study were determined, based on the review of relevant literature and established according to the availability of data for measurement purposes. Inspired by previous research, Hausman test is used in this study to determine whether a random or fixed effects generalized least squares model is best. The linear regression model is applied to strongly balanced panel data obtained from the ten commercial banks. Findings - The findings demonstrate that Nigerian banking sector considers LLPs in terms of its decision making of advancing approach, while proper inclusion of credit, market and operational risk is more important for South Africa’s banks rather than the maintenance of provisions. Originality/value - Moreover, the credit risk proves to be more needed factor of consideration for Nigerian rather for South African banks. This is an answer to the strong economy of South Africa as compared to Nigeria and more chances of default faced by Nigerian banks.

Keywords: Economics; Performance management; Decision making; Corporate strategy; Risk management; Auditing; Finance and banking; Profitability strategies; Experimental studies; Financial research; F29; F36; G19; G29; M00; P00 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jeaspp:jeas-08-2017-0078

DOI: 10.1108/JEAS-08-2017-0078

Access Statistics for this article

Journal of Economic and Administrative Sciences is currently edited by Associate Professor Ghulam A Arain and Dr Rebecca Abraham

More articles in Journal of Economic and Administrative Sciences from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().