Cost-efficiency and bank profitability during health crisis

Daniel Taylor, Bernard Sarpong and Eunice Yaa Cudjoe

Applied Economics Letters, 2024, vol. 31, issue 8, 732-737

Abstract: This paper examines the impact of cost-efficiency on bank profitability in the context of the Covid-19 pandemic using quarterly data from a panel of banks operating in five (5) Sub-Saharan African countries. The findings show that cost-efficient banks are more profitable amid the pandemic. Additionally, we found that revenue diversification is associated with strong financial performance. Our findings contribute to literature by proposing the adoption of aggressive cost control and revenue diversification strategies by the management of banks to ensure sustainable and resilient financial performance in times of crises when interest incomes are sticky.

Date: 2024
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DOI: 10.1080/13504851.2022.2146644

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