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Cost and profit efficiency of listed South African banks pre and post the financial crisis

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  • du Toit, Elda
  • Cuba, Yolanda Z.

Abstract

The 2008 financial crisis and the regulations that followed after the crisis have seen an increase in the safeguards to the financial system, adding additional costs to the banking sector. This has significantly impacted on the banking industry. This study investigates the change in cost and profit efficiency in the period before, during and after the financial crisis (2004–2013) in South Africa for banks listed on the Johannesburg Stock Exchange (JSE). It further seeks to explain the relationship between the cost to income ratio (CIR) and the return on average assets (ROAA), as well as in relation to business cycles. The study further seeks to understand how ownership relates to market share, CIR and ROA.

Suggested Citation

  • du Toit, Elda & Cuba, Yolanda Z., 2018. "Cost and profit efficiency of listed South African banks pre and post the financial crisis," Research in International Business and Finance, Elsevier, vol. 45(C), pages 435-445.
    • Handle: RePEc:eee:riibaf:v:45:y:2018:i:c:p:435-445
    DOI: 10.1016/j.ribaf.2017.07.175
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    Cited by:

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    2. Adeabah, David & Abakah, Emmanuel Joel Aikins & Tiwari, Aviral Kumar & Hammoudeh, Shawkat, 2023. "How far have we come and where should we go after 30+ years of research on Africa's emerging financial markets? A systematic review and a bibliometric network analysis," Emerging Markets Review, Elsevier, vol. 55(C).
    3. Abreu, Emmanuel Sousa de & Kimura, Herbert & Sobreiro, Vinicius Amorim, 2019. "What is going on with studies on banking efficiency?," Research in International Business and Finance, Elsevier, vol. 47(C), pages 195-219.
    4. Bilel Jarraya & Hatem Afi & Anis Omri, 2023. "Analyzing the Profitability and Efficiency in European Non-Life Insurance Industry," Methodology and Computing in Applied Probability, Springer, vol. 25(2), pages 1-25, June.

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    More about this item

    Keywords

    Cost to income ratio (CIR); Return on average assets (ROAA); Financial crisis; Composite ownership index; Market share;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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