REGULAR BANKING CAPITAL AND BANKS PROFITABILITY IN THE WEST AFRICAN ECONOMICS AND MONETARY UNION (WAEMU)

Tom–Irazou Tchalim

Volume : V, Issue : X, October - 2015

REGULAR BANKING CAPITAL AND BANKS PROFITABILITY IN THE WEST AFRICAN ECONOMICS AND MONETARY UNION (WAEMU)

Tom Irazou Tchalim

Abstract :

The banking capital is a key indicator of banking regulation. This study aims to analyse the determinants of banking profitability in the WAEMU by focusing on the relationship between capital equity of banks as approximate measure of regulatory banking capital and profitability. From a sample of pooled individuals’ data of thirty banks over the period from 2008 to 2011, we identify the determinants of banking profitability of the Union by applying the Ordinary Least Square (OLS) on panel data with fixed effects. The results show that equity capital of banks influence negatively the banking profitability while it is positively and significantly influenced by banking loans. The banks regulation should take into account the degree of individual risk