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International Journal of Finance & Banking Studies
Last article check: 03 Nov 2026 19:06 · Completed
Last successful article refresh: 03 Nov 2026 19:06
Next article check due: 04 Nov 2026 19:06
Crossref refresh: 21 Oct 2026 00:21 · OpenAlex refresh: 21 Oct 2026 00:22
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JOURNAL ARTICLE

Risk Asset Exposure and Bank Performance in Emerging Markets: Panel Evidence from Cameroon

Fossung, Michael Forzeh · Njei, Gisele · Tapang, Arzizeh Tiesieh

International Journal of Finance & Banking Studies · 2026

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This study examines whether risk asset exposure affects the financial performance of commercial banks in Cameroon, a bank-dominated economy of the Central African Economic and Monetary Community (CEMAC). Risk asset exposure is measured by lending intensity (the loan-to-deposit ratio) and credit expansion (annual loan growth), and performance by return on assets (ROA). The data form a balanced panel of ten commercial banks over 2014–2024, compiled from the prudential reporting system of the Central African Banking Commission (COBAC) as published by Cameroon's National Economic and Financial Committee. Bank fixed-effects regressions with bank-clustered standard errors are complemented by a wild-cluster bootstrap suited to few clusters, Driscoll–Kraay standard errors, lagged regressors, panel Granger non-causality tests and a within–between (Mundlak) decomposition that separates changes in a bank's own exposure from persistent differences between banks. The main findings are that (i) neither lending intensity nor credit expansion is significantly associated with profitability in any specification (bootstrap p = 0.81 and 0.30), and the confidence intervals exclude effects larger than about one percentage point of ROA; (ii) lending intensity is unrelated to profitability both within banks over time and between banks (between-effect bootstrap p = 0.88); and (iii) the COVID-19 years of 2020–2021 were associated with ROA about 0.70 percentage points lower (bootstrap p = 0.009). The results indicate a limited role for lending exposure, while significant bank fixed effects and the COVID-19 coefficient point to persistent bank heterogeneity and common systemic shocks. Because the sample comprises ten banks under a single regulator, the findings should be interpreted with caution.

DOI 10.20525/ijfbs.v15i4.5090N/A Crossref citations0 OpenAlex citations