Bank Ownership and Performance in the Middle East and North Africa Region
Although both domestic and foreign private banks have gained ground in MENA in recent years, state banks continue to play an important role in many countries. Using a MENA bank-level panel dataset for the period 2001-08, the paper contributes to th...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110404090342 http://hdl.handle.net/10986/3387 |
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okr-10986-3387 |
|---|---|
| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCESS TO CREDIT ACCESS TO FINANCE ACCOUNTING ADVISORY SERVICES AGRICULTURAL BANKS ASSET QUALITY ASSETS RATIO ASSETS RATIOS ASYMMETRIC INFORMATION AUCTIONS BAILOUTS BALANCE SHEET BANK ASSETS BANK COMPETITION BANK INTEREST MARGIN BANK INTEREST MARGINS BANK LENDING BANK POLICY BANK PRIVATIZATION BANK PROFITABILITY BANK REGULATION BANK REGULATIONS BANK SIZE BANKING ASSETS BANKING INSTITUTIONS BANKING REGULATION BANKING SECTOR BANKING SECTORS BANKING SYSTEM BANKING SYSTEMS BORROWINGS BRANCH NETWORK BRANCH NETWORKS CAPITAL MARKET COLLATERAL COLLATERAL REGIMES COMMERCIAL BANK COMMERCIAL BANKS COMMERCIAL LOANS CONNECTED LENDING CONSUMER LENDING CORPORATE GOVERNANCE CREDIT ALLOCATION CREDIT BUREAUS CREDIT CARDS CREDIT DECISIONS CREDIT GROWTH CREDIT GUARANTEE CREDIT GUARANTEES CREDIT INFORMATION CREDIT INFORMATION SYSTEMS CREDIT MARKETS CREDIT REGISTRIES CREDIT REPORTING CREDIT REPORTING SYSTEMS CREDIT SCORING CREDITOR CREDITOR RIGHTS CREDITS DEBT FINANCE DEFAULT RATES DEMAND DEPOSITS DEPOSIT DEPOSIT ACCOUNTS DEPOSITS DERIVATIVES DEVELOPING COUNTRIES DEVELOPMENT BANK DISCLOSURE REQUIREMENTS DIVERSIFICATION DOMESTIC BANKS DOMESTIC CREDIT DUMMY VARIABLE EARNING ASSETS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIES OF SCALE EMPLOYEE EMPLOYMENT ENFORCEMENT OF CONTRACTS EQUALITY EQUITY INVESTMENTS EXCHANGE COMMISSIONS EXIT MECHANISM EXPATRIATE EXTERNAL FUNDING EXTERNALITIES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL LIBERALIZATION FINANCIAL MARKET FINANCIAL PERFORMANCE FINANCIAL SECTOR REFORMS FINANCIAL SERVICES FINANCIAL SYSTEM FINANCIAL SYSTEMS FIXED ASSETS FIXED COSTS FOREIGN BANK FOREIGN BANKS FOREIGN EXCHANGE GOVERNANCE STANDARDS GOVERNMENT DEBT GOVERNMENT FINANCING GOVERNMENT OWNERSHIP GOVERNMENT SECURITIES GUARANTEE SCHEMES HELD TO MATURITY SECURITIES HOLDING HOUSEHOLDS HOUSING HOUSING FINANCE IMPLICIT GOVERNMENT GUARANTEE INCOME-GENERATING ACTIVITIES INDIVIDUALS INEQUALITY INFORMATION ASYMMETRIES INFORMATION SHARING INSTITUTIONAL ASPECTS INSURANCE INTANGIBLES INTEREST COSTS INTEREST EXPENSE INTEREST INCOME INTEREST MARGIN INTEREST RATES INTERNATIONAL BANK INTERNATIONAL BANKS INTERNATIONAL FINANCE INVESTMENT DECISIONS INVESTMENT FINANCE INVESTMENT LOANS ISLAMIC BANK ISLAMIC BANKING ISLAMIC BANKS JOINT VENTURE LACK OF COMPETITION LENDERS LENDING TECHNIQUES LETTERS OF CREDIT LEVY LIMITED LOAN LOAN LOSS PROVISIONS LOAN PORTFOLIO LOAN PORTFOLIOS LOCAL BANKS LOCAL MARKETS LONG-TERM FUNDING LONG-TERM INVESTMENT MANDATES MARKET FAILURES MARKET INSTITUTIONS MARKET PARTICIPANTS MARKET SHARE MARKET SHARES MATURITY MEASURES OF PROFITABILITY MORTGAGE LOANS NET INTEREST MARGIN NON PERFORMING LOANS NON-PERFORMING LOANS NONPERFORMING LOANS NPL OPERATING COSTS OPERATING EXPENSES OPERATING INCOME OVERHEAD COSTS OWNERSHIP STRUCTURE OWNERSHIP STRUCTURES PARTIAL CREDIT PENSION PERFORMANCE ANALYSIS PERSONNEL EXPENSES PRIVATE BANK PRIVATE BANKING PRIVATE BANKS PRIVATE CREDIT PRIVATE CREDIT BUREAUS PRIVATE OWNERSHIP PRIVATIZATION PROFITABILITY PROFITABLE BUSINESS PUBLIC BANKS PUBLIC CREDIT PUBLIC DEBT REAL ESTATE REGIONAL BANKS REMITTANCES RESERVE RESIDENTIAL MORTGAGE RETURN RETURN ON ASSETS RETURN ON EQUITY RETURNS RETURNS ON EQUITY RISK MANAGEMENT SHARE OF GOVERNMENT SECURITIES SHARE OF INVESTMENT SHAREHOLDER SHAREHOLDERS SHORT-TERM BORROWINGS SOCIAL SECURITY STATE BANK STATE BANKS STATE ENTERPRISES STATISTICAL ANALYSIS STOCK EXCHANGE STOCK MARKET STOCK MARKETS STOCK OPTIONS SUPERVISION OF BANKS TAX TRADE FINANCE TRADING UNION URBAN AREAS URBANIZATION WAGES |
| spellingShingle |
ACCESS TO CREDIT ACCESS TO FINANCE ACCOUNTING ADVISORY SERVICES AGRICULTURAL BANKS ASSET QUALITY ASSETS RATIO ASSETS RATIOS ASYMMETRIC INFORMATION AUCTIONS BAILOUTS BALANCE SHEET BANK ASSETS BANK COMPETITION BANK INTEREST MARGIN BANK INTEREST MARGINS BANK LENDING BANK POLICY BANK PRIVATIZATION BANK PROFITABILITY BANK REGULATION BANK REGULATIONS BANK SIZE BANKING ASSETS BANKING INSTITUTIONS BANKING REGULATION BANKING SECTOR BANKING SECTORS BANKING SYSTEM BANKING SYSTEMS BORROWINGS BRANCH NETWORK BRANCH NETWORKS CAPITAL MARKET COLLATERAL COLLATERAL REGIMES COMMERCIAL BANK COMMERCIAL BANKS COMMERCIAL LOANS CONNECTED LENDING CONSUMER LENDING CORPORATE GOVERNANCE CREDIT ALLOCATION CREDIT BUREAUS CREDIT CARDS CREDIT DECISIONS CREDIT GROWTH CREDIT GUARANTEE CREDIT GUARANTEES CREDIT INFORMATION CREDIT INFORMATION SYSTEMS CREDIT MARKETS CREDIT REGISTRIES CREDIT REPORTING CREDIT REPORTING SYSTEMS CREDIT SCORING CREDITOR CREDITOR RIGHTS CREDITS DEBT FINANCE DEFAULT RATES DEMAND DEPOSITS DEPOSIT DEPOSIT ACCOUNTS DEPOSITS DERIVATIVES DEVELOPING COUNTRIES DEVELOPMENT BANK DISCLOSURE REQUIREMENTS DIVERSIFICATION DOMESTIC BANKS DOMESTIC CREDIT DUMMY VARIABLE EARNING ASSETS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIES OF SCALE EMPLOYEE EMPLOYMENT ENFORCEMENT OF CONTRACTS EQUALITY EQUITY INVESTMENTS EXCHANGE COMMISSIONS EXIT MECHANISM EXPATRIATE EXTERNAL FUNDING EXTERNALITIES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL LIBERALIZATION FINANCIAL MARKET FINANCIAL PERFORMANCE FINANCIAL SECTOR REFORMS FINANCIAL SERVICES FINANCIAL SYSTEM FINANCIAL SYSTEMS FIXED ASSETS FIXED COSTS FOREIGN BANK FOREIGN BANKS FOREIGN EXCHANGE GOVERNANCE STANDARDS GOVERNMENT DEBT GOVERNMENT FINANCING GOVERNMENT OWNERSHIP GOVERNMENT SECURITIES GUARANTEE SCHEMES HELD TO MATURITY SECURITIES HOLDING HOUSEHOLDS HOUSING HOUSING FINANCE IMPLICIT GOVERNMENT GUARANTEE INCOME-GENERATING ACTIVITIES INDIVIDUALS INEQUALITY INFORMATION ASYMMETRIES INFORMATION SHARING INSTITUTIONAL ASPECTS INSURANCE INTANGIBLES INTEREST COSTS INTEREST EXPENSE INTEREST INCOME INTEREST MARGIN INTEREST RATES INTERNATIONAL BANK INTERNATIONAL BANKS INTERNATIONAL FINANCE INVESTMENT DECISIONS INVESTMENT FINANCE INVESTMENT LOANS ISLAMIC BANK ISLAMIC BANKING ISLAMIC BANKS JOINT VENTURE LACK OF COMPETITION LENDERS LENDING TECHNIQUES LETTERS OF CREDIT LEVY LIMITED LOAN LOAN LOSS PROVISIONS LOAN PORTFOLIO LOAN PORTFOLIOS LOCAL BANKS LOCAL MARKETS LONG-TERM FUNDING LONG-TERM INVESTMENT MANDATES MARKET FAILURES MARKET INSTITUTIONS MARKET PARTICIPANTS MARKET SHARE MARKET SHARES MATURITY MEASURES OF PROFITABILITY MORTGAGE LOANS NET INTEREST MARGIN NON PERFORMING LOANS NON-PERFORMING LOANS NONPERFORMING LOANS NPL OPERATING COSTS OPERATING EXPENSES OPERATING INCOME OVERHEAD COSTS OWNERSHIP STRUCTURE OWNERSHIP STRUCTURES PARTIAL CREDIT PENSION PERFORMANCE ANALYSIS PERSONNEL EXPENSES PRIVATE BANK PRIVATE BANKING PRIVATE BANKS PRIVATE CREDIT PRIVATE CREDIT BUREAUS PRIVATE OWNERSHIP PRIVATIZATION PROFITABILITY PROFITABLE BUSINESS PUBLIC BANKS PUBLIC CREDIT PUBLIC DEBT REAL ESTATE REGIONAL BANKS REMITTANCES RESERVE RESIDENTIAL MORTGAGE RETURN RETURN ON ASSETS RETURN ON EQUITY RETURNS RETURNS ON EQUITY RISK MANAGEMENT SHARE OF GOVERNMENT SECURITIES SHARE OF INVESTMENT SHAREHOLDER SHAREHOLDERS SHORT-TERM BORROWINGS SOCIAL SECURITY STATE BANK STATE BANKS STATE ENTERPRISES STATISTICAL ANALYSIS STOCK EXCHANGE STOCK MARKET STOCK MARKETS STOCK OPTIONS SUPERVISION OF BANKS TAX TRADE FINANCE TRADING UNION URBAN AREAS URBANIZATION WAGES Farazi, Subika Feyen, Erik Rocha, Roberto Bank Ownership and Performance in the Middle East and North Africa Region |
| geographic_facet |
Middle East and North Africa Middle East and North Africa Middle East and North Africa |
| relation |
Policy Research working paper ; no. WPS 5620 |
| description |
Although both domestic and foreign
private banks have gained ground in MENA in recent years,
state banks continue to play an important role in many
countries. Using a MENA bank-level panel dataset for the
period 2001-08, the paper contributes to the empirical
literature by documenting recent ownership trends and
assessing the role of ownership and bank performance in MENA
while accounting for key bank characteristics such as size
and balance sheet composition. The paper analyzes headline
performance indicators as well as their key drivers and
finds that state banks exhibit significantly weaker
performance, despite their larger size. This result is
mainly driven by a larger holding of government securities,
higher costs due to larger staffing numbers, and larger loan
loss provisions reflecting weaker asset quality. The results
reflect both operational inefficiencies and policy mandates.
The paper also provides a detailed performance analysis of
foreign and listed banks. Foreign banks are fairly new in
MENA, yet perform on par with domestic banks despite their
smaller size and higher investment costs. Listed banks
exhibit superior performance driven by higher interest
margins even in the face of higher costs associated with
listing. Taken together, the results do not reject the
development role for state banks, but do show that their
intervention comes at a cost. As such, there is scope to
reduce the share of state banks in some countries and to
clarify the mandates, improve the governance, and strengthen
the operational efficiency of most state banks in MENA. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Farazi, Subika Feyen, Erik Rocha, Roberto |
| author_facet |
Farazi, Subika Feyen, Erik Rocha, Roberto |
| author_sort |
Farazi, Subika |
| title |
Bank Ownership and Performance in the Middle East and North Africa Region |
| title_short |
Bank Ownership and Performance in the Middle East and North Africa Region |
| title_full |
Bank Ownership and Performance in the Middle East and North Africa Region |
| title_fullStr |
Bank Ownership and Performance in the Middle East and North Africa Region |
| title_full_unstemmed |
Bank Ownership and Performance in the Middle East and North Africa Region |
| title_sort |
bank ownership and performance in the middle east and north africa region |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110404090342 http://hdl.handle.net/10986/3387 |
| _version_ |
1764386900914733056 |
| spelling |
okr-10986-33872021-04-23T14:02:09Z Bank Ownership and Performance in the Middle East and North Africa Region Farazi, Subika Feyen, Erik Rocha, Roberto ACCESS TO CREDIT ACCESS TO FINANCE ACCOUNTING ADVISORY SERVICES AGRICULTURAL BANKS ASSET QUALITY ASSETS RATIO ASSETS RATIOS ASYMMETRIC INFORMATION AUCTIONS BAILOUTS BALANCE SHEET BANK ASSETS BANK COMPETITION BANK INTEREST MARGIN BANK INTEREST MARGINS BANK LENDING BANK POLICY BANK PRIVATIZATION BANK PROFITABILITY BANK REGULATION BANK REGULATIONS BANK SIZE BANKING ASSETS BANKING INSTITUTIONS BANKING REGULATION BANKING SECTOR BANKING SECTORS BANKING SYSTEM BANKING SYSTEMS BORROWINGS BRANCH NETWORK BRANCH NETWORKS CAPITAL MARKET COLLATERAL COLLATERAL REGIMES COMMERCIAL BANK COMMERCIAL BANKS COMMERCIAL LOANS CONNECTED LENDING CONSUMER LENDING CORPORATE GOVERNANCE CREDIT ALLOCATION CREDIT BUREAUS CREDIT CARDS CREDIT DECISIONS CREDIT GROWTH CREDIT GUARANTEE CREDIT GUARANTEES CREDIT INFORMATION CREDIT INFORMATION SYSTEMS CREDIT MARKETS CREDIT REGISTRIES CREDIT REPORTING CREDIT REPORTING SYSTEMS CREDIT SCORING CREDITOR CREDITOR RIGHTS CREDITS DEBT FINANCE DEFAULT RATES DEMAND DEPOSITS DEPOSIT DEPOSIT ACCOUNTS DEPOSITS DERIVATIVES DEVELOPING COUNTRIES DEVELOPMENT BANK DISCLOSURE REQUIREMENTS DIVERSIFICATION DOMESTIC BANKS DOMESTIC CREDIT DUMMY VARIABLE EARNING ASSETS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIES OF SCALE EMPLOYEE EMPLOYMENT ENFORCEMENT OF CONTRACTS EQUALITY EQUITY INVESTMENTS EXCHANGE COMMISSIONS EXIT MECHANISM EXPATRIATE EXTERNAL FUNDING EXTERNALITIES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL LIBERALIZATION FINANCIAL MARKET FINANCIAL PERFORMANCE FINANCIAL SECTOR REFORMS FINANCIAL SERVICES FINANCIAL SYSTEM FINANCIAL SYSTEMS FIXED ASSETS FIXED COSTS FOREIGN BANK FOREIGN BANKS FOREIGN EXCHANGE GOVERNANCE STANDARDS GOVERNMENT DEBT GOVERNMENT FINANCING GOVERNMENT OWNERSHIP GOVERNMENT SECURITIES GUARANTEE SCHEMES HELD TO MATURITY SECURITIES HOLDING HOUSEHOLDS HOUSING HOUSING FINANCE IMPLICIT GOVERNMENT GUARANTEE INCOME-GENERATING ACTIVITIES INDIVIDUALS INEQUALITY INFORMATION ASYMMETRIES INFORMATION SHARING INSTITUTIONAL ASPECTS INSURANCE INTANGIBLES INTEREST COSTS INTEREST EXPENSE INTEREST INCOME INTEREST MARGIN INTEREST RATES INTERNATIONAL BANK INTERNATIONAL BANKS INTERNATIONAL FINANCE INVESTMENT DECISIONS INVESTMENT FINANCE INVESTMENT LOANS ISLAMIC BANK ISLAMIC BANKING ISLAMIC BANKS JOINT VENTURE LACK OF COMPETITION LENDERS LENDING TECHNIQUES LETTERS OF CREDIT LEVY LIMITED LOAN LOAN LOSS PROVISIONS LOAN PORTFOLIO LOAN PORTFOLIOS LOCAL BANKS LOCAL MARKETS LONG-TERM FUNDING LONG-TERM INVESTMENT MANDATES MARKET FAILURES MARKET INSTITUTIONS MARKET PARTICIPANTS MARKET SHARE MARKET SHARES MATURITY MEASURES OF PROFITABILITY MORTGAGE LOANS NET INTEREST MARGIN NON PERFORMING LOANS NON-PERFORMING LOANS NONPERFORMING LOANS NPL OPERATING COSTS OPERATING EXPENSES OPERATING INCOME OVERHEAD COSTS OWNERSHIP STRUCTURE OWNERSHIP STRUCTURES PARTIAL CREDIT PENSION PERFORMANCE ANALYSIS PERSONNEL EXPENSES PRIVATE BANK PRIVATE BANKING PRIVATE BANKS PRIVATE CREDIT PRIVATE CREDIT BUREAUS PRIVATE OWNERSHIP PRIVATIZATION PROFITABILITY PROFITABLE BUSINESS PUBLIC BANKS PUBLIC CREDIT PUBLIC DEBT REAL ESTATE REGIONAL BANKS REMITTANCES RESERVE RESIDENTIAL MORTGAGE RETURN RETURN ON ASSETS RETURN ON EQUITY RETURNS RETURNS ON EQUITY RISK MANAGEMENT SHARE OF GOVERNMENT SECURITIES SHARE OF INVESTMENT SHAREHOLDER SHAREHOLDERS SHORT-TERM BORROWINGS SOCIAL SECURITY STATE BANK STATE BANKS STATE ENTERPRISES STATISTICAL ANALYSIS STOCK EXCHANGE STOCK MARKET STOCK MARKETS STOCK OPTIONS SUPERVISION OF BANKS TAX TRADE FINANCE TRADING UNION URBAN AREAS URBANIZATION WAGES Although both domestic and foreign private banks have gained ground in MENA in recent years, state banks continue to play an important role in many countries. Using a MENA bank-level panel dataset for the period 2001-08, the paper contributes to the empirical literature by documenting recent ownership trends and assessing the role of ownership and bank performance in MENA while accounting for key bank characteristics such as size and balance sheet composition. The paper analyzes headline performance indicators as well as their key drivers and finds that state banks exhibit significantly weaker performance, despite their larger size. This result is mainly driven by a larger holding of government securities, higher costs due to larger staffing numbers, and larger loan loss provisions reflecting weaker asset quality. The results reflect both operational inefficiencies and policy mandates. The paper also provides a detailed performance analysis of foreign and listed banks. Foreign banks are fairly new in MENA, yet perform on par with domestic banks despite their smaller size and higher investment costs. Listed banks exhibit superior performance driven by higher interest margins even in the face of higher costs associated with listing. Taken together, the results do not reject the development role for state banks, but do show that their intervention comes at a cost. As such, there is scope to reduce the share of state banks in some countries and to clarify the mandates, improve the governance, and strengthen the operational efficiency of most state banks in MENA. 2012-03-19T18:01:33Z 2012-03-19T18:01:33Z 2011-04-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110404090342 http://hdl.handle.net/10986/3387 English Policy Research working paper ; no. WPS 5620 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Middle East and North Africa Middle East and North Africa Middle East and North Africa |