The Factors Determining the Profitability of Tunisian Banks

Abstract

The main objective of this chapter is to study empirically the performance indicators of Tunisian banks during the period from 1999 to 2020. The authors use NIM and ROA as profitability measures. They employ GLS method to estimate the panel model who measure the bank profitability. From the empirical findings, the authors find that EQUITY has a positive impact on the profitability of banks. The credit risk presents a negative impact on performance. The size of the banks affects their performance positively. The financial regulations and the financial reform are statistically significant and positive. The density is statistically significant and negative. In that case, the level of the collected deposits has a negative impact on the profitability of Tunisian banks. Private credit is statistically significant and positive. The improved performance by Tunisian banks largely reflects the prudential supervision exercised by the Central Bank of Tunisia.