The Impact of Capital on Bank Profitability: Case of Tunisia
Mohamed Aymen Ben Moussa *
Faculty of Economics Sciences and Management of Tunis University el Manar, Tunisia.
Hédi Trabelsi
Faculty of Economics Sciences and Management of Tunis University el Manar, Tunisia.
Adel Boubaker
Faculty of Economics Sciences and Management of Tunis University el Manar, Tunisia.
*Author to whom correspondence should be addressed.
Abstract
The capital adequacy ratio measures the ability of a financial institutions to meet its liabilities by comparing its capital with assets.
This article studied the relationship between bank capital and bank profitability measured by (Return on assets; return on equity; net interest margin). We used a method of static panel for a sample of 11 banks in Tunisia between (2000…2018). We found that bank capital has a significant impact on ROA. But capital has a non significant effect on bank return on equity and not significant impact on bank net interest margin.
Keywords: Capital, bank, profitability, panel static