Profitability,Risk And Efficiency Assessment Of Major Sub-Saharan Africa Banking Markets

The study seeks to examine the profitability,risk,and efficiency of the banking sector of major Sub-Saharan Africa economies.Five major banking institutions selected from each of these countries were used to represent the banks of the countries.In the study,performance is measured in terms of profits generated,risk,and efficiency by employing banking ratios.Profitability was assessed using Return on Assets(ROA),Return on Equity(ROE),Rate Paid on Funds(RPF),Yield on Earning Assets(YEA)and Net Interest Margin(NIM).Risk was measured using Loan Loss Reserve and Debt-to-Assets ratios.The measures of efficiency included Non-Interest Income and Non-Interest Expense ratios.Panel data analysis employing an econometric model was run using Eviews.The results obtained showed a marked variation in individual country's banking performance which could be attributable to the individual country's specific macroeconomic,sectoral,and even political situation.The banks of Kenya were found out to be exhibiting good performance under most of the profitability metrics.South African banks were found out to be more efficient and risky at the same time.However,it can also be hypothesized that a number of bank-specific factors like size,ownership,age,and experience significantly affect bank's performance.