Testing the governance-performance relationship for the Tunisian banks: a GMM in system analysis

Rationale:This study aims to contribute to settling the lack of consensus regarding the determinants of bank performance,not only by considering bank governance,but also by including factors such as CEO compensation and risk management committee.Previous literature has included bank governance and considered only large banks in their surveys.The exclusion of other factors such as small-and medium-size banks may render the findings of these studies limited in applicability.Objective:The objective of this paper is to examine the impact of internal governance on bank performance.Methodology:To achieve this goal,we used annual data of a sample of ten Tunisian commercial banks listed in the Tunisian Stock Exchange observed during the period 1998–2015.We use the Generalized Method of Moments(GMM)to estimate the parameters of our econometric model.Results:Our study finds that the correlation between the size of the board of directors,the state’s inclusion,and the presence of independent directors is positive and significant.On the other hand,we have found that CEO compensation,as well as foreign and institutional investors negatively affect the performance of the banks.Conclusions and implications:Tunisian banks are invited to broaden their size through appropriate restructuring,adopt new remuneration policies and define the optimal number of directors representing the state within the board of directors.Our results suggest managerial implications that can be of great value to ensuring the success of Tunisian banks.The latter should favor a higher presence of independent directors to reduce the bank control ineffectiveness caused by having a significant number of foreign and institutional investors in the board of directors.

Neoteric Performance Challenges for Islamic Banks： An Elucidation

This paper aims to examine the challenges posed to the global banking environment with the advent of phenomenal growth in Islamic banking and the changing macroeconomic environment. The paper reviews different approaches to analyze the banking sector performance and the success or failure thereof. The paper also identifies the main factors affecting banking sector performance and their relative impact on the overall stability and resilience of banks. The approach of this paper is more judiciously diagnostic and synthesizing in nature. The paper covers significant studies undertaken in banking sector and synthesizes the nature of elements used to predict the predilection status of Islamic and conventional commercial banks. The findings suggest that return on equity （ROE） and weighted capital adequacy ratio （WCAR） are the most important bank-specific factors that may be used to analyze bank＇s performance. The findings also suggest that not only bank-specific but macroeconomic factors also play an important role in determining a bank＇s performance in an economy, though the effect is usually widespread. Amongst macroeconomic factors, GDP growth rate, inflation, and real interest rate are most common factors affecting bank performance. This research is different from other researches as it takes into consideration the methodological, aeon and acclimatization perspective. Most researches do not see Islamic banking as a challenge to conventional commercial banking and the banking sector in general. The paper not only reviews Islamic banking as a major element of change in the overall banking environment but also as a potential intimidator to the conventional banking stream.

Chinese banking system： Peculiarities in a comparison with Italian case

The analysis of principal data on Chinese banks highlights how they are exposed to credit risk, primarily generated from loans to public companies. Chinese banks have a good capital provision; The analysis of economic data describes a system oriented towards relationship lending; The average profitability per employee shows wide margins of improvement in terms of efficiency and technological equipment. The comparison with the case of Italy, which like China can be considered an economy heavily oriented to banking intermediation, it is useful to highlight some peculiarities of the Chinese banking system.

The Impact of Foreign Bank Strategies on the Behavior and Performance of Czech and Slovak Banks in the Financial Crisis

In this paper, the authors analyze the impact of the specific ownership structure of the banking sector in Czech and Slovakia on the performance and applied strategies of particular banks during times of crisis. Did the multinational banks pursue a coherent regional strategy to cope with the risks resulting from the crisis, or did they focus on finding local solutions？ The aim of this paper is to find answers to these questions. A case study is going to be used as a basic research method. Two members （Slovak and Czech） of four multinational banking groups are examined in the crisis year 2009, whereby both a qualitative analysis of the annual reports regarding strategic business or risk management decisions and a comparative quantitative analysis of selected financial data and risk indicators are employed. The authors have found that Czech and Slovak banks generally tried to follow the main strategic directions given by their parent banks during the financial crisis. However, particular financial results and risk profiles of respective subsidiaries of multinational banks still differ because of market factors specific to the different countries in which the subsidiaries are located.

Degree of financialization and energy efficiency in Sub-Saharan Africa: do institutions matter?

The United Nations Sustainable Development Goal 7 emphasizes the need for economies around the world to double their efforts in energy efficiency improvements.This is because improvements in energy efficiency can trigger economic growth and considered as one of the‘green’growth strategies due to its carbon free content.To this end,some empirical studies have investigated the nexus between economic growth and energy efficiency,but the effects of the latter on financial indicators have not been sufficiently studied in the literature,at least in developing economies like Africa.This study examines the effect of energy efficiency improvements on commercial bank profitability under different political regimes(i.e.,autocratic and democratic political regimes);something previous literature had neglected.The study uses panel data,consisting of 43 African countries and the simultaneous System Generalized Method of Moments.We found that energy efficiency improvement is more likely to induce higher bank profitability in political institutions with the characteristics of centralization of power compared with those with decentralization of power.Furthermore,for the banking sector,the findings suggest that energy utilization behavior of clients should be included in the loan or credit valuation process.For the government,the agenda of energy efficiency should be aggressively pursued while taking cognizance of creating a political environment that weans itself from a‘grandfathering’behavior.

Cooperation Satisfaction and Performance:Empirical Evidence from Chinese Banks and Their Foreign Strategic Investors

In this paper, we investigate whether the mutual satisfaction of Chinese banks and foreign strategic investors （FSI） in terms of their cooperation with each other affects the performance of Chinese banks＇. Since 2004, China ＇s banking authority has conducted an annual survey on Chinese banks and their FSI, assessing levels of mutual satisfaction in terms of their cooperation. We use these survey results to examine the effects of satisfaction levels on the profitability of Chinese banks. Our results reveal that satisfaction affects profitability; that is, satisfied foreign investors and Chinese banks yield better performance. Satisfaction determinants for each party are also examined. Although the profitability of Chinese banks does not show a significant effect on the satisfaction of either party, bank loan to deposit ratios, regions of FSI home countries, and the type of Chinese banks＇ are important factors that might affect satisfaction.