Bank Ownership and Performance in the Middle East and North Africa Region

Farazi, Subika ; Feyen, Erik ; Rocha, Roberto

关键词: ACCESS TO CREDIT;    ACCESS TO FINANCE;    ACCOUNTING;    ADVISORY SERVICES;    AGRICULTURAL BANKS;   

DOI  :  10.1596/1813-9450-5620
RP-ID  :  WPS5620

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Although both domestic and foreignprivate banks have gained ground in MENA in recent years,state banks continue to play an important role in manycountries. Using a MENA bank-level panel dataset for theperiod 2001-08, the paper contributes to the empiricalliterature by documenting recent ownership trends andassessing the role of ownership and bank performance in MENAwhile accounting for key bank characteristics such as sizeand balance sheet composition. The paper analyzes headlineperformance indicators as well as their key drivers andfinds that state banks exhibit significantly weakerperformance, despite their larger size. This result ismainly driven by a larger holding of government securities,higher costs due to larger staffing numbers, and larger loanloss provisions reflecting weaker asset quality. The resultsreflect both operational inefficiencies and policy mandates.The paper also provides a detailed performance analysis offoreign and listed banks. Foreign banks are fairly new inMENA, yet perform on par with domestic banks despite theirsmaller size and higher investment costs. Listed banksexhibit superior performance driven by higher interestmargins even in the face of higher costs associated withlisting. Taken together, the results do not reject thedevelopment role for state banks, but do show that theirintervention comes at a cost. As such, there is scope toreduce the share of state banks in some countries and toclarify the mandates, improve the governance, and strengthenthe operational efficiency of most state banks in MENA.