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

Farazi, Subika; Feyen, Erik; Rocha, Roberto

dc.creator	Farazi, Subika
dc.creator	Feyen, Erik
dc.creator	Rocha, Roberto
dc.date	2012-03-19T18:01:33Z
dc.date	2012-03-19T18:01:33Z
dc.date	2011-04-01
dc.date.accessioned	2023-02-17T20:55:48Z
dc.date.available	2023-02-17T20:55:48Z
dc.identifier	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
dc.identifier	http://hdl.handle.net/10986/3387
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244351
dc.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.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5620
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCESS TO CREDIT
dc.subject	ACCESS TO FINANCE
dc.subject	ACCOUNTING
dc.subject	ADVISORY SERVICES
dc.subject	AGRICULTURAL BANKS
dc.subject	ASSET QUALITY
dc.subject	ASSETS RATIO
dc.subject	ASSETS RATIOS
dc.subject	ASYMMETRIC INFORMATION
dc.subject	AUCTIONS
dc.subject	BAILOUTS
dc.subject	BALANCE SHEET
dc.subject	BANK ASSETS
dc.subject	BANK COMPETITION
dc.subject	BANK INTEREST MARGIN
dc.subject	BANK INTEREST MARGINS
dc.subject	BANK LENDING
dc.subject	BANK POLICY
dc.subject	BANK PRIVATIZATION
dc.subject	BANK PROFITABILITY
dc.subject	BANK REGULATION
dc.subject	BANK REGULATIONS
dc.subject	BANK SIZE
dc.subject	BANKING ASSETS
dc.subject	BANKING INSTITUTIONS
dc.subject	BANKING REGULATION
dc.subject	BANKING SECTOR
dc.subject	BANKING SECTORS
dc.subject	BANKING SYSTEM
dc.subject	BANKING SYSTEMS
dc.subject	BORROWINGS
dc.subject	BRANCH NETWORK
dc.subject	BRANCH NETWORKS
dc.subject	CAPITAL MARKET
dc.subject	COLLATERAL
dc.subject	COLLATERAL REGIMES
dc.subject	COMMERCIAL BANK
dc.subject	COMMERCIAL BANKS
dc.subject	COMMERCIAL LOANS
dc.subject	CONNECTED LENDING
dc.subject	CONSUMER LENDING
dc.subject	CORPORATE GOVERNANCE
dc.subject	CREDIT ALLOCATION
dc.subject	CREDIT BUREAUS
dc.subject	CREDIT CARDS
dc.subject	CREDIT DECISIONS
dc.subject	CREDIT GROWTH
dc.subject	CREDIT GUARANTEE
dc.subject	CREDIT GUARANTEES
dc.subject	CREDIT INFORMATION
dc.subject	CREDIT INFORMATION SYSTEMS
dc.subject	CREDIT MARKETS
dc.subject	CREDIT REGISTRIES
dc.subject	CREDIT REPORTING
dc.subject	CREDIT REPORTING SYSTEMS
dc.subject	CREDIT SCORING
dc.subject	CREDITOR
dc.subject	CREDITOR RIGHTS
dc.subject	CREDITS
dc.subject	DEBT FINANCE
dc.subject	DEFAULT RATES
dc.subject	DEMAND DEPOSITS
dc.subject	DEPOSIT
dc.subject	DEPOSIT ACCOUNTS
dc.subject	DEPOSITS
dc.subject	DERIVATIVES
dc.subject	DEVELOPING COUNTRIES
dc.subject	DEVELOPMENT BANK
dc.subject	DISCLOSURE REQUIREMENTS
dc.subject	DIVERSIFICATION
dc.subject	DOMESTIC BANKS
dc.subject	DOMESTIC CREDIT
dc.subject	DUMMY VARIABLE
dc.subject	EARNING ASSETS
dc.subject	ECONOMIC DEVELOPMENT
dc.subject	ECONOMIC GROWTH
dc.subject	ECONOMIES OF SCALE
dc.subject	EMPLOYEE
dc.subject	EMPLOYMENT
dc.subject	ENFORCEMENT OF CONTRACTS
dc.subject	EQUALITY
dc.subject	EQUITY INVESTMENTS
dc.subject	EXCHANGE COMMISSIONS
dc.subject	EXIT MECHANISM
dc.subject	EXPATRIATE
dc.subject	EXTERNAL FUNDING
dc.subject	EXTERNALITIES
dc.subject	FINANCIAL CRISIS
dc.subject	FINANCIAL DEVELOPMENT
dc.subject	FINANCIAL INFRASTRUCTURE
dc.subject	FINANCIAL INSTITUTIONS
dc.subject	FINANCIAL INTERMEDIATION
dc.subject	FINANCIAL LIBERALIZATION
dc.subject	FINANCIAL MARKET
dc.subject	FINANCIAL PERFORMANCE
dc.subject	FINANCIAL SECTOR REFORMS
dc.subject	FINANCIAL SERVICES
dc.subject	FINANCIAL SYSTEM
dc.subject	FINANCIAL SYSTEMS
dc.subject	FIXED ASSETS
dc.subject	FIXED COSTS
dc.subject	FOREIGN BANK
dc.subject	FOREIGN BANKS
dc.subject	FOREIGN EXCHANGE
dc.subject	GOVERNANCE STANDARDS
dc.subject	GOVERNMENT DEBT
dc.subject	GOVERNMENT FINANCING
dc.subject	GOVERNMENT OWNERSHIP
dc.subject	GOVERNMENT SECURITIES
dc.subject	GUARANTEE SCHEMES
dc.subject	HELD TO MATURITY SECURITIES
dc.subject	HOLDING
dc.subject	HOUSEHOLDS
dc.subject	HOUSING
dc.subject	HOUSING FINANCE
dc.subject	IMPLICIT GOVERNMENT GUARANTEE
dc.subject	INCOME-GENERATING ACTIVITIES
dc.subject	INDIVIDUALS
dc.subject	INEQUALITY
dc.subject	INFORMATION ASYMMETRIES
dc.subject	INFORMATION SHARING
dc.subject	INSTITUTIONAL ASPECTS
dc.subject	INSURANCE
dc.subject	INTANGIBLES
dc.subject	INTEREST COSTS
dc.subject	INTEREST EXPENSE
dc.subject	INTEREST INCOME
dc.subject	INTEREST MARGIN
dc.subject	INTEREST RATES
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL BANKS
dc.subject	INTERNATIONAL FINANCE
dc.subject	INVESTMENT DECISIONS
dc.subject	INVESTMENT FINANCE
dc.subject	INVESTMENT LOANS
dc.subject	ISLAMIC BANK
dc.subject	ISLAMIC BANKING
dc.subject	ISLAMIC BANKS
dc.subject	JOINT VENTURE
dc.subject	LACK OF COMPETITION
dc.subject	LENDERS
dc.subject	LENDING TECHNIQUES
dc.subject	LETTERS OF CREDIT
dc.subject	LEVY
dc.subject	LIMITED
dc.subject	LOAN
dc.subject	LOAN LOSS PROVISIONS
dc.subject	LOAN PORTFOLIO
dc.subject	LOAN PORTFOLIOS
dc.subject	LOCAL BANKS
dc.subject	LOCAL MARKETS
dc.subject	LONG-TERM FUNDING
dc.subject	LONG-TERM INVESTMENT
dc.subject	MANDATES
dc.subject	MARKET FAILURES
dc.subject	MARKET INSTITUTIONS
dc.subject	MARKET PARTICIPANTS
dc.subject	MARKET SHARE
dc.subject	MARKET SHARES
dc.subject	MATURITY
dc.subject	MEASURES OF PROFITABILITY
dc.subject	MORTGAGE LOANS
dc.subject	NET INTEREST MARGIN
dc.subject	NON PERFORMING LOANS
dc.subject	NON-PERFORMING LOANS
dc.subject	NONPERFORMING LOANS
dc.subject	NPL
dc.subject	OPERATING COSTS
dc.subject	OPERATING EXPENSES
dc.subject	OPERATING INCOME
dc.subject	OVERHEAD COSTS
dc.subject	OWNERSHIP STRUCTURE
dc.subject	OWNERSHIP STRUCTURES
dc.subject	PARTIAL CREDIT
dc.subject	PENSION
dc.subject	PERFORMANCE ANALYSIS
dc.subject	PERSONNEL EXPENSES
dc.subject	PRIVATE BANK
dc.subject	PRIVATE BANKING
dc.subject	PRIVATE BANKS
dc.subject	PRIVATE CREDIT
dc.subject	PRIVATE CREDIT BUREAUS
dc.subject	PRIVATE OWNERSHIP
dc.subject	PRIVATIZATION
dc.subject	PROFITABILITY
dc.subject	PROFITABLE BUSINESS
dc.subject	PUBLIC BANKS
dc.subject	PUBLIC CREDIT
dc.subject	PUBLIC DEBT
dc.subject	REAL ESTATE
dc.subject	REGIONAL BANKS
dc.subject	REMITTANCES
dc.subject	RESERVE
dc.subject	RESIDENTIAL MORTGAGE
dc.subject	RETURN
dc.subject	RETURN ON ASSETS
dc.subject	RETURN ON EQUITY
dc.subject	RETURNS
dc.subject	RETURNS ON EQUITY
dc.subject	RISK MANAGEMENT
dc.subject	SHARE OF GOVERNMENT SECURITIES
dc.subject	SHARE OF INVESTMENT
dc.subject	SHAREHOLDER
dc.subject	SHAREHOLDERS
dc.subject	SHORT-TERM BORROWINGS
dc.subject	SOCIAL SECURITY
dc.subject	STATE BANK
dc.subject	STATE BANKS
dc.subject	STATE ENTERPRISES
dc.subject	STATISTICAL ANALYSIS
dc.subject	STOCK EXCHANGE
dc.subject	STOCK MARKET
dc.subject	STOCK MARKETS
dc.subject	STOCK OPTIONS
dc.subject	SUPERVISION OF BANKS
dc.subject	TAX
dc.subject	TRADE FINANCE
dc.subject	TRADING
dc.subject	UNION
dc.subject	URBAN AREAS
dc.subject	URBANIZATION
dc.subject	WAGES
dc.title	Bank Ownership and Performance in the Middle East and North Africa Region
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	Middle East and North Africa
dc.coverage	Middle East and North Africa
dc.coverage	Middle East and North Africa