Quality of the loans Portfolio and solidity of banks in EMCCA countries

Qualité du portefeuille de crédits et solidité des banques des pays de la CEMAC

Ingrid Sorel Kouemou Watcho ()
Additional contact information
Ingrid Sorel Kouemou Watcho: Université Omar Bongo [Libreville, Gabon]

Post-Print from HAL

Abstract: The resurgence of financial crises in recent years has led to renewed interest in the issue of the financial health of banks. The purpose of this paper is to examine the effects of portfolio quality on the soundness (individual health) of banks in the Central African Economic and Monetary Community (CAEMC). Given the new requirements of prudential regulation, we have, from a Logit model supplemented by a Tobit, determined the threshold for NPLs that could lead to banks' vulnerability. Thus, our analysis will be carried out on the following (4) four states: Cameroon, Congo, Gabon, and Chad. Our sample will consist of twenty (20) banks in the main representative countries (mentioned above) of the CEMAC banking sector for a period of 14 years from 2000 to 2013. Our database is represented on Panel data. Our data come mainly from the IMF (International Monetary Fund), the World Bank (WB), reports from the CABC (Central African Banking Commission), bank balance sheets and ratio calculations. The results tell us that only variables in the quality of the credit portfolio explain the soundness of banks. We found that the ability of banks to provide credit as measured by net lending on total assets (NACCs) is the main credit quality indicator that negatively affects the probability of bank soundness occurring, so that the NPL rate above 10% would result in a bank in a situation of soundness.

Keywords: bank soundness; Threshold; Non-performing loan rate; Seuil; Taux de prêts non performants; qualité du portefeuille; solidité bancaire; Logit; Tobit; Panel (search for similar items in EconPapers)
Date: 2024-08-02
Note: View the original document on HAL open archive server: https://hal.science/hal-04676892
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in International Journal of Accounting, Finance, Auditing, Management and Economics, 2024, 5 (8), pp.112-128. ⟨10.5281/zenodo.13328626⟩

Downloads: (external link)
https://hal.science/hal-04676892/document (application/pdf)

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:hal:journl:hal-04676892

DOI: 10.5281/zenodo.13328626

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().