Determinants of Bank Net Interest Margin: Case of Tunisia
PDF

Keywords

Banking
Tunisia
Net Interest Margin
Size
Deposits
Inflation

How to Cite

Moussa, M., & Majouj, W. (2016). Determinants of Bank Net Interest Margin: Case of Tunisia. International Journal of Finance & Banking Studies (2147-4486), 5(3), 103-116. https://doi.org/10.20525/ijfbs.v5i3.252

Abstract

Net interest margin is a significant indicator of the efficiency of the banking financial intermediation. In general, the level of net interest margin is primarily a consequence of result of the level of development and competitiveness of the financial system of country.Therefore, It is important to determine their determinants. In this article, we analyze the determinants of net interest margin of 18 banks in Tunisia between ( 2000…2013). We found that among the internal factors, size, deposits, TLA, CEA, risk have an significant impact  on net interest margin. In external factors, only inflation have a significant impact on net interest margin..

https://doi.org/10.20525/ijfbs.v5i3.252
PDF

References

Abreu.M, Mendes.V ( 2003) . Do macro –financial variables matter for European bank interest margins and profitability? Paper presented at Eco Mod Network, Istanbul Conference, Istanbul.

Ali.K, Akhtar.M.F, Ahmed.H.Z (2011). Bank specific and macroeconomic indicators of profitability: empirical evidence form the commercial banks of Pakistan. International Journal of Business and Social Sciences, 2, (6).

Almarzoqi.R, Ben Naceur.S ( 2015). Determinants of bank interest margins in the Caucasus and Central Asia. IMF Working paper.

Angbazo L (1997). Commercial Bank Net Interest Margin, Default Risk, Interest Rate Risk, and Off –Balance Sheet Banking. Journal of Banking and Finance, vol 21, issue1.

Azeez.A.A, Gamage.S (2013). The determinants of net interest rate margins of commercial banks in Kenya. Vidyasagar University Journal of Commerce, vol 18.

Barajas.A, Steiner.R, Salazar.N ( 1999) . Interest Rate Spread in Banking in Colombia. IMF staff paper, 46.

Beck.T, H.Hess ( 2009). Why Are Interest Spreads so high in Uganda? Journal of Development Economics, vol 88.

Ben Naceur.S (2003). The Determinants of the Tunisian Bank Industry Profitability: Panel Evidence. October, www.mafhoum.com.

Ben Naceur.S, Goaied.M ( 2008) . The Determinants of Commercial Bank Interest Margin and Profitability: Evidence from Tunisia. Frontiers in Finance and Economics, vol. 5, n.1.

Ben Nassar.K, Martinez.E, Pineda.A ( 2014) . Determinants of Bank’s Net Interest Margin in Honduras . IMF Working Paper.

Boone.J Weigand.J ( 2000). Measuring Competitive in the Dutch Manufacturing Sector: How Are Costs Differential Mapped Into Profit Different. CPB working paper, N.131

Brock.P, Rajas –Suarez.L ( 2000). Interest Rate Spreads in Latin America: Facts, theories, and Policy Recommendations. Inter-American Development Bank.

Brock.P.L, Suarez.R.L ( 2000). Understanding the Behavior of Bank Spreads in Latin America. Journal of Development Economics, 63 (1).

Brock.P, Franken H. ( 2002). Bank Interest Margin Net Interest Rate Spread: How Good Is Balance Sheet Data For Analyzing The Cost Of Financial Intermediation? Mimeo Central bank of Chile.

-Busch.R, Memmel.C (2014). Quantifying the Components of the Bank’s net Interest Margin. Discussion paper, Deutsche Bandesbank, n.5, www.bandesbank.de, p:1-33.

Carbo.S, F.Rodriguez ( 2007) . The Determinants of Bank’s Margins in European Banking. Journal of Banking and Finance, vol 31, p:2043-2063.

Claessens.S, Luc Leaven ( 2004). What Drives Bank Competition ? Some international Evidence. Journal of Money, Credit and Banking, vol 36.

Clayes.S, Vennet.R.V. (2008). Determinants of Bank Interest Margin in Central and Eastern Europe : A Comparison with the West. Economics systems, vol 32,n.2.

Dabla Norris.E, Floerkemeir.H ( 2007). Bank Efficiency and Market Structure: What Determines Banking Spreads in Armenia?Washington, International Monetary Fund ( IMF), Working paper. N: 7/134

Demirguc Kunt.A, Huizinga H (1998). Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence. The World Bank policy research working paper.

Demirguc Kunt.A, Huizinga H (1999) .Determinants of Commercial Bank Interest Margins and Profitability : Some International Evidence. World Bank Economic Review, 13.

Demirguc Kunt.A, Huizinga.H (2000). Financial Structure and Bank Profitability. Siteresources.world bank.org, January.

Demirguc Kunt A, L.Leaven, R.Levine ( 2004). Regulations, Market Structure, Institutions and the Cost of Financial Intermediation. Journal of Money, Credit and Banking, vol 36,(3),p593-622

Dimicic.M , Ridzak T ( 2013). Determinants of Bank’s Net Interest Margin in CENTRAL and Eastern Europe.

Drakos.K ( 2003). Assessing the Success of Reform in Tunisian Banking: An Interest Margin Analysis. Journal of Policy Modeling, Vol 25, (3).

Fry.M.J ( 1995). Money, Interest and Banking in Economic Development. Second ed, John Kopkins, University Press

Funcagova.Z, Poghosyan.T ( 2009). Determinants of Bank Interest Margin in Russia: Does Bank Ownership Matter ? Discussion paper 22/2009

Gustavo.J, Garcia G ( 2010). What Influences Net Interest Rate Margins? Developed versus Developing Countries. Banks and Banks Systems. 5( 4), 2010.

Hadad.M, D.Santoso.W, Dwityapetra.S.B ( 2003) . Intermediation Cost Study by Some Banks in Indonesia: Is Interest Credit Banks Overpriced ? Bank Indonesia Working Paper

Hamadi.H, Awdeh ( 2012) . The Determinants of Bank Net Interest Margin: Evidence From the LEBANESE banking sector. Journal of Money, investment and Banking, issue 23.

Ho.T.S, A.Saunders (1981). The Determinants of Bank Interest Margins: Theory and Empirical Evidence . Journal of Financial Quantitative Analysis, Vol 16.

Hovarth.R ( 2009). Interest Margins Determinants of Czech Banks. Institue of Economic Studies, Faculty of Social Sciences, Charles University, wp 11/09, Prague

Iloska.N (2014). Determinants of Net Interest Margin in the Case of Macedonia. Journal of Applied Economics and Business, issue 2:

Kalluci.I ( 2013). Determinants of Net Interest Margin in the Albanian Banking System. Bank of Albania.

Khrawish.H.A (2011). Determinants of Commercial Bank Performance: Evidence From Jordan . International Research Journal of Finance and Economics, Zarqa University, 5(5).

Khanh.H.T, Tra.V.T.D (2015). Determinants of Net Interest Margin of Commercial bAnks in Vietnam. Journal of Economics and Development, Vol 17, N.2:

Konar.Y (2014). Factors Explaining Net Interest Margins and Spreads in Turkish Banking Sector : Evidence From ( 2002….2013). arno.uvt.nl:

Maria Elena.K, Agoraki ( 2010) . The Determinants of Net Interest Margin during Transition. Journal of Accounting and Finance, Athens, University of Economics and Business,

Martinez.P, A.Mody (2004). How Foreign Participation and Market Concentration Impact Bank Spreads : Evidence from Latin America. Journal of Money, Credit and Banking, Vol 36,(3):

Maudos.J, J.Fernandez De Guevara ( 2004) . Factors Explaining the Interest Margin in the Banking Sector of the European Union. Journal of Banking and Finance, Vol 28.

Maudos.J, L.Solis (2009). The Determinants of Net Interest Income in the Mexican Banking System: An Integrated Model. Journal of Banking and Finance. Vol 33.

Naceur S.B(2003). The Determinants of the Tunisian Banking Industry Profitability: Panel Evidence . October.

Ongore.V.O, Kusa.G.B (2013) . Determinants of Financial Performance of Commercial Banks in Kenya . International Journal of Economics and Financial issues, Vol 3, N.1.

Plakalovic.N, Alihodzic.A( 2015) . Determinants of the Net Interest Margins in BH banks Vol. 43, N.1.

Poghosyan.T (2010) . Re-Examining the Impact of Foreign Bank Participation on Interest Margins in Emerging Markets. Emerging Market Review. 11(4).

Raharjo. P.G, Hakim.D.B, Manuring.A.H, Maulana.T.NA ( 2014) . The Determinants of Commercial Bank’s Interest Margin in Indonesia : An Analysis of Fixed Effect Panel Regression. International Journal of Economic and Financial Issues, 4(2).

Rajan.G.R, Zingales.L ( 1998). Which Capitalism ? Lessons from the East Asian Crisis. Journal of Applied Corporate Finance, 11(3).

Schawaiger.M.S, Liebig.D ( 2008). Determinants of the Interest rate Margins in Central and Eastern Europe. Oestereichische National Bank, Financial Stability report, n.14

Staikouras.C, Wood.C ( 2003) . The Determinants of Bank Profitability in Europe. Paper Presented at the European applied Business Research Conference, Venice.

Tarus.D.R, Chekol..Y, Mutwol.M( 2012). Determinants of Net Interest Margin of Commercial Banks in Kenya. Procedia Economics and Finance, Vol 2.

Ugur.A, Erkus.H ( 2010) . Determinants of the Net Interest Margins of Banks in Turkey. Journal of Economics and Social Research, 12(2).

Vong L.K ( 2005). Loans and Profitability of Banks in Macao . AMCM Quaterly Bulletin, Issue n.15.

William.B ( 2007). Factors Determining Net Interest Margin in Australia: Domestic and Foreign Banks. Financial Market, Institutions and Instruments,Vol. 16.

Yilmaz. A.A (2013). Profitability of Banking System: Evidence from emerging markets . WEI International Academic Conference Antalya, Turkey.

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.