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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.

This study examined the effect of deposit diversification on the financial performance of Deposit-Taking Savings and Credit Cooperative Societies (DT-SACCOs) in Kenya and evaluated the moderating effect of corporate governance on this relationship.  The study adopted a positivist research philosophy and a causal research design. The target population comprised 176 SASRA-licensed DT-SACCOs in Kenya, from which 122 SACCOs with complete financial records for the period 2015–2024 were selected using simple random sampling. Panel data techniques, including fixed-effects and random-effects regression models, were employed to estimate the direct and moderating effects, while hierarchical regression was used to test the moderation hypothesis. The findings revealed that non-withdrawable deposits significantly and positively influenced both surplus and dividend payout after introducing lags, whereas withdrawable deposits had no significant effect on financial performance. The results further established that corporate governance had a positive and significant direct effect on financial performance and significantly strengthened the relationship between deposit diversification and financial performance. The findings provide practical guidance for DT-SACCO managers and policymakers to strengthen stable deposit mobilization and corporate governance as mechanisms for enhancing financial sustainability and institutional performance.

This paper examines how uninsured deposits influence credit union funding and whether private excess deposit insurance alters the stability, pricing, and lending capacity of uninsured deposits — deposits that exceed the federal deposit insurance limit. Using U.S. credit union Call Report data from 1995–2022, we exploit variation across institution size, insurance regime, and participation in optional private excess deposit insurance.  We distinguish between pre-crisis (1995–2007) and post-crisis (2009–2022) periods surrounding the 2008 expansion of federal insurance limits.  We document pronounced heterogeneity across the size distribution.  For small credit unions, uninsured deposits are limited in scale and are associated with lower loan intensity.  In contrast, uninsured deposits play a central funding role for large credit unions, which account for 94% of industry assets and 97% of uninsured deposits. For these institutions, uninsured deposits support lending and command higher funding costs — effects that are significantly moderated by excess deposit insurance, reducing funding costs by approximately 27 basis points during the pre-crisis period.  Following 2008, excess insurance participation declines among large institutions but increases modestly among small firms.  Overall, excess deposit insurance functions as a partial substitute for federal coverage, stabilizing uninsured funding without increasing delinquency rates — evidence against moral hazard.

This study explored the bank-specific and macroeconomic factors influencing capital adequacy in South African commercial banks. In this research, a balanced panel data set comprising 11 recapitalized banks was employed, spanning the period from 2008 to 2019. Employing panel regression techniques including OLS, Fixed Effects, Random Effects, and the Generalized Method of Moments (GMM), the analysis examines the influence of profitability (ROA), bank size, leverage, broad money supply, and the central bank’s monetary policy rate on the Capital Adequacy Ratio (CAR). The results indicate that profitability, bank size, leverage, and the broad money supply are critical determinants of capital sufficiency. Banks with increased profitability and increased exposure to the money supply typically demonstrate more robust capital positions. Larger bank size and increased leverage levels negatively affect capital adequacy ratios. The little impact of the delayed CAR signifies minimal persistence in capital buffer methods over time, implying that banks may not significantly depend on prior year capital conditions in their current capital planning. The study highlights the complex nature of capital sufficiency, influenced by microeconomic factors such as size and leverage, as well as macroeconomic indices like the money supply. The findings substantiate the Capital Buffer Theory and furnish critical insights for regulators, bank executives, and policymakers seeking to bolster the resilience of the banking industry in South Africa.

The COVID-19 pandemic triggered a global economic crisis that significantly impacted the South African banking sector, already weakened by a pre-existing recession. While bank profitability and credit quality declined, stock market reactions appeared less severe, indicating a potential disconnect between fundamentals and investor behaviour. This study explores the influence of investor sentiment on credit risk, lending, and performance (ROA) of selected JSE-listed banks during the pandemic, incorporating behavioural finance perspectives. Panel regression analysis reveals that COVID-19 had a significant negative effect on stock, ROA and ROE, driven by heightened uncertainty and rising non-performing loans. Liquidity and capital positively influenced returns and ROE, reflecting investor confidence in resilient banks. Investor sentiment had a weakly positive impact on returns, but a significant negative effect on both ROA and ROE, suggesting that excessive optimism may have led to riskier lending practices and reduced profitability. Larger banks underperformed in terms of returns, likely due to operational complexity during the crisis. These findings highlight the critical role of behavioural factors in shaping financial outcomes during systemic shocks and provide new insights into emerging market banking dynamics under crisis conditions.

This paper focuses on a classic policy trade-off by unraveling the role of financial deregulation in driving financial stability and exploring how the role of regulatory quality can affect this relationship. To this end, this study uses a balanced panel dataset of 73 countries across a period of ten years starting from 2014. The empirical specification utilizes a two-step System GMM approach, accounting for both endogeneity, unobserved heterogeneity issues, and persistence in financial stability. Specifically, financial stability is measured by non-performing loans (NPLs), which represent the level of risk exposure of national banking sectors. The findings reveal that financial freedom leads to higher level of financial instability, proving theoretical predictions of the excessive risk-taking behavior of lending institutions encouraged with financial deregulation. Furthermore, the interaction term between financial freedom and regulatory quality is statistically significant, suggesting that financial deregulation can be compensated by the quality of regulatory environment. The role of the GDP per capita variable used for stabilizing the findings is significant as it represents the resilience of more developed economies. The implications of the results are complex. In a more institutional context, this finding suggests that financial stability is not a direct function of financial freedom but is conditional on institutional capability. Hence, high regulatory quality can mitigate the instability caused by financial freedom, thereby enabling a balanced approach.

SMEs (Small and Medium Enterprises) play a critical role in Senegal's economy. Some SMEs choose to work with only one bank (monobanking), while others engage with multiple banks (multibanking). This study aims to examine both internal and external determinants that influence SMEs' decision to opt for multibanking. Using data collected from 105 SME managers in Senegal, the research employs multinomial logistic regression which shows that internal factors such as the size of the SME, its maturity, and the manager's experience, significantly drive multibanking, while external factors, such as the quality of banking services, negatively influence this decision. Knowledge of these factors could help to improve the bank-SME relationship, resulting in a win-win situation that better meets the needs of SMEs and increases the loyalty of the main bank's customers. This could contribute to better performance for both players.

This study examines the impacts of credit risk management on the growth of Nigerian banks. Specifically, the study focused mainly on the impacts of credit risk management among Deposit Money Banks in Nigeria. The study employed an ex-post facto research design, utilising secondary data from the financial information of 14 selected listed Deposit Money Banks from 2007 to 2022. The study population was defined as the total number of listed Deposit Money Banks, from which a sample of six banks was selected using a simple random sampling technique. The operationalisation of variables included (1) the use of natural logarithm for bank size, (2) a three-level scale for credit risk, and (3) alternative measurements for collateral management and credit scores. Data analysis involved the calculation of descriptive statistics, correlation analysis, variance inflation factors, and regression analysis. The research hypotheses are also validated to assess the significance of various factors in credit risk management. The findings revealed that credit scores significantly enhance the effectiveness of credit risk assessment, and collateral management did not significantly contribute to mitigating credit risk. The findings also revealed that default risk management significantly reduces the credit risk of Deposit Money Banks in Nigeria. These results highlight the intricate nature of credit risk management in the banking sector and emphasize the need for a multifaceted approach.

This study examines the stock performance of large and small European banks included in the STOXX 600 Banks index in response to three major macroeconomic shocks the COVID-19 pandemic, the Russian invasion of Ukraine, and the collapse of Silicon Valley Bank. Employing daily bank stock returns and an event study framework, the analysis measures immediate market reactions through abnormal returns, while subsequent shifts in equity performance are evaluated using volatility, Sharpe ratios, and beta coefficients. The results suggest that large banks tend to exhibit more pronounced short-term losses during shocks compared to smaller banks. In contrast, small banks generally outperform in the medium term following these events, achieving higher risk-adjusted returns despite elevated volatility. Both segments experience increased market correlation and volatility during periods of disruption, indicating heightened systemic risk. Moreover, the type of shock plays a crucial role, with smaller banks often showing greater resilience to localized and geopolitical shocks.

This study assesses the determinants of bank deposit flows under changing economic conditions by applying the dynamic panel two-step generalized methods of moments technique to annual observations covering 2007 to 2022 of 12 commercial banks in South Africa. The analysis revealed past deposit flow, profitability, bank size, and capital adequacy ratio as constituting a set of bank-specific variables with a positive predictive influence on deposit flows. At the same time, expenditure drives an adverse impact on deposits. These dynamics posit important implications for efficiency in bank expenditure management to sustain the inflow of depositors’ flows. Also, the results show the existence of a positive relationship between the unemployment rate and deposit flow, which is unexpected in practice, as an increase in joblessness in the country implies a decline in the financial capacity of the population to contribute to bank saving portfolios. However, the unexpected interaction between unemployment and deposit flow in this context can be explained by the adaptive principles of market interactions as the relationship between financial variables is unlikely to be the same under different economic conditions. Moreover, the analysis shows a positive effect of the economic condition on deposit flows which implies that an increase in national productivity exerts an impressive on the flow of depositors' funds to the banks based on market expansion and rapid growth momentum. Based on the findings, strategies to ensure the sustenance of a conducive macroeconomic environment should be reinforced by policymakers as the dynamics of bank deposit flows are linked to the direction of the current economic condition.

This study investigates the impact of Credit Risk Management (CRM) on resilience in non-bank financial institutions (NBFIs) and explores how Customer Relationship Management (CREM) moderates this relationship. Using Partial Least Squares Structural Equation Modeling (PLS-SEM) with data from credit risk managers in the National Capital Region, the study finds that CRM significantly enhances resilience. Moreover, CREM strengthens the impact of credit risk management on resilience, demonstrating a synergistic effect. The findings suggest that NBFIs should integrate CRM and CREM strategies to improve organizational resilience, offering a valuable framework for enhancing stability amidst economic challenges.

This paper investigates the factors that form bank risks in Bangladeshi state-owned banks. As a representation of bank risk, non-performing loans have been considered the dependent variable for this study. The relevant data have been extracted from six state-owned banks in Bangladesh from 2013 to 2022. The final dataset consists of 60 firm-year observations. The ordinary least square (OLS) regression with robust standard errors model is utilized to find the relationship of bank risks with determinants like asset size, efficiency, liquidity, profitability, leverage ratio, capital adequacy ratio, and loan to asset ratio. The findings say that bank size and loan-to-asset ratio have a highly significant positive relationship with bank risk, whereas profitability, capital adequacy ratio, and bank efficiency have a significant negative association with bank risk. On the other hand, leverage and liquidity are negatively and positively correlated with no statistical significance. To check the study's robustness, another proxy of bank risk, loan loss provision has been used and the results are almost similar. State-owned banks operate in every economy with a different mindset than the general commercial banks. Hence, policymakers should take necessary initiatives based on this study to bring down the high bank risks in state-owned banks in Bangladesh.

This study analyses the impact of external debt on the financial performance of commercial banks in Kenya for the period 2008-2022. Employing descriptive, correlational, and inferential research designs, the study reviewed data from the Central Bank of Kenya, the World Bank, KNBS, and IMF on a quarterly basis. By employing the Augmented Dickey-Fuller test, ROE and external debt were further qualified to be stationary at first difference. The results highlighted by the Autoregressive Distributed Lag (ARDL) analysis indicated a statistically significant negative relationship between external debt and financial performance; the coefficients (-0.8998) confirmed that for every unit of increase in external debt, there would be a decline in ROE by 0.8998 units. The study establishes that external debt has been detrimental to the financial health of Kenyan banks due to the economic pressure it brings to the sector. For this purpose, it suggests that the government should avoid borrowing from external sources, and it has advised the development of measures that encourage overseas investors to invest in the country's banking sector. The policy of attracting FDI can enhance capital availability and alleviate the financial load on banking institutions. Relaxing regulations that restrict foreign investors would pave the way for this and help increase the bank’s performance, thus enhancing long-term economic growth.

This article discusses financial stability related notions of risk, the issue of convergence and cross financial sector prudential intervention. It elucidates the Basel framework shortcomings and enunciates the requirement of setting a reinvigorated prudential framework before proceeding to its essentials in terms of engineering. It highlights an early warning approach dealing with the issue of time reaction mismatch of the prudential authority and the priority of setting a long run forwarded guided approach. The objective of this research is to provide a clue into enhancing prudential setting of instruments, the forwarded guided purview of surveillance as well as hedging and the Balanced Score Card. 

Savings and Credit Co-operatives in Kenya are required to adhere to regulations set by the SACCOs Regulation Authority. Among the regulations is the requirement that the management has to present a myriad of reports including; the Capital Adequacy Return report, Liquidity Statement report, Statement of Financial Position and Statement of Deposit Return. The Return on Investments report compares land, building, and financial assets to SACCO's total assets and its core capital. Despite the existence of prudential guidelines, their influence on the financial performance of deposit-taking SACCOs in Kenya remains contentious with some claiming regulatory compliance in the form of SASRA prudential guidelines has a positive influence while others argue that SASRA regulation has insignificant influence on the financial performance of deposit taking SACCOs. This study seeks to determine the effect of loan-loss provisioning on the financial performance of Deposit-taking SACCOs in Kirinyaga County, Kenya. The study adopted a cross-section descriptive research design. The study population was 10 deposit-taking SACCOs in Kirinyaga County over the period 2017-2022 relying on secondary data. Data analysis involved descriptive and inferential statistics. From the inferential results, the study concluded that loan-loss provisioning positively and significantly affected the financial performance of the deposit-taking SACCOs in Kirinyaga County. The study recommended that the deposit-taking SACCOs in Kirinyaga County ought to strive to be capital-adequate as well as manage their loans efficiently. Being capital-adequate ensures that the SACCOs can expand their operations and hence be sustainable, competitive, and finally profitable. Managing its loans through periodic classification of the loans and having room for loan loss provision ensures the sustainability of the SACCOs.

This study investigated the causal interactions between macroprudential policy, measured by the Macroprudential Policy Index (MPI), and financial cycles represented by the Aggregate Financial Cycle (AFC) and the Credit and Asset Prices Financial Cycle (CAFC) in South Africa from 1970q1 to 2023q2. Additionally, the study explored the effects of macroprudential policy during different phases of financial cycles. Using the time-varying Granger-causality model, the study found that the MPI Granger-caused financial cycles during the 2003/07 credit boom in South Africa, while the AFC and CAFC Granger-caused macroprudential policy during the Covid-19-induced collapse of financial markets. The results suggest that macroprudential policy is employed more proactively during financial booms and more reactively during financial busts in South Africa. The Markov switching dynamic regression model used to assess the MPI's effects revealed that macroprudential policy's effectiveness is stronger during financial busts and weaker during financial booms in South Africa. This is because financial institutions in South Africa tend to resist stricter regulations during boom phases due to heightened optimism about future prospects. Conversely, they are more receptive to stimulatory interventions during bust phases. Based on these findings, it is recommended that the South African Reserve Bank and the Prudential Authority use macroprudential policy more assertively during financial booms to enhance its effectiveness. This could involve setting more stringent parameters upon activating macroprudential policy tools or complementing macroprudential policy with monetary policy during financial booms.

This paper examines the consequences of banks’ performance on bank risk. The paper forms a theoretical model and delivers empirical evidence to identify that banks suffer in performance as the loans become bad. Using panel data from a sample of five (05) South-Asian emerging economies from 2011 to 2019, we have found that the banks are highly influenced by the development of non-performing loans (NPLs). We have primarily used Return on Asset (ROA) followed by Return on Equity (ROE) as a substitution to the performance of the banks and NPL as the proxy of bank risk. Simultaneous regression applying 3sls finds that Non-Performing Loan (NPL) hinders banks' growth, negatively affecting their profitability.

This paper investigates the relation between bank liquidity and borrowing from a lender of last resort on a high frequency basis during a financial crisis.  The paper evaluates weekly observations of individual bank borrowing of clearinghouse loan certificates by a panel of New York Clearing House member banks during the crisis of 1884.  Naturally, banks with higher reserve ratios borrowed lower amounts, but banks replaced a dollar of reserves with less than a dollar of borrowing from a lender of last resort.

The Covid-19 pandemic has hit the world since the end of 2019 and has damaged the world economy, including Indonesia. Banking as a financial institution that provides funding to companies is also affected. Because the pandemic has reduced the company's performance, and this decline in performance has had an impact on banking. The aim of this research is to test whether the Covid-19 pandemic has an impact on the relationship between risk factors and bank performance. Bank performance is measured by profitability which consists of return on assets (ROA) and return on equity (ROE), while bank risk in this study consists of credit risk, liquidity risk, capital, operational risk and the Covid-19 pandemic. The population in this research is the Regional Development Banks (BPD) in Indonesia totaling 34 banks with a sample of 30 banks. The observation period was 4 years with quarterly data so that 320 observation data were collected. Hypothesis testing uses panel data regression, and to select the best regression model, the model will be tested using the Chow-test, Hausman-test, and Lagrange Multiplier test. After the model test was carried out, the fixed effect model was selected as the best model. The research results show that credit risk and operational risk have a significant and negative influence on all profitability, both ROA and ROE. Meanwhile, liquidity risk (LDR) has no effect on both types of profitability, while capital has an effect on ROE but has no effect on ROA. Another interesting result is that the Covid-19 pandemic has no impact on the influence of risk on bank performance.

The financial performance of banks relies heavily on properly utilizing their capital. However, bank ownership can have varying effects on the relationship between financial performance and capital. This study delves into this relationship by examining the impact of ownership on financial performance and bank capital. The study analyzes data from 44 commercial banks in Bangladesh and uses a two-step system generalized method of moments to address heteroscedasticity and autocorrelation issues. Unlike previous studies, this study confirms the significant effect of ownership on the relationship between bank financial performance and bank capital. The study's main findings are: (1) an inverted U-shaped relationship exists between bank capital and financial performance, implying that increasing capital can improve and reduce financial performance. (2) Private and Islamic commercial banks perform better than state-owned and conventional banks. (3) private-owned and Islamic commercial banks with higher capital are more likely to achieve higher profitability and financial success, while state-owned and conventional commercial banks with higher capital show lower profitability and weaker financial performance. Overall, this study offers significant practical implications for academics, researchers, and regulators interested in leveraging these findings.