Determinants of Bank Profitability and Basel Capital Regulation: Empirical Evidence from Nigeria

Peterson Ozili

MPRA Paper from University Library of Munich, Germany

Abstract: This study, empirically, investigates the determinants of bank profitability. After including the regulatory variable into the model, I find no significant difference in bank profitability during pre-and post-capital regulation regime. Second, after employing NIM and ROA profitability metrics, I find that the determinants of bank profitability, and its significance, depends on the profitability metric employed. Third, I find that asset quality is a strong determinant of bank interest margin, relative to return on asset. Also, I observe that economies of scale and scope enables larger banks to be profitable (ROA) relative to smaller banks. Overall, the insignificant effect of Basel capital regime on bank profitability seems to suggest that such regulation might not be aimed at decreasing bank profits.

Keywords: Bank Profitabilty; Basel Capital Regulation (search for similar items in EconPapers)
JEL-codes: E5 E58 G2 G21 N2 N20 N27 (search for similar items in EconPapers)
Date: 2015-01
New Economics Papers: this item is included in nep-afr, nep-eff, nep-mac and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Working Paper: Determinants of Bank Profitability and Basel Capital Regulation: Empirical Evidence from Nigeria (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:61048

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