Browsing by Author "Masole, One Maitumelo"

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    Regulation and its impact on bank performance: The case of Basel Accords
    (University of the Witwatersrand, Johannesburg, 2023-11) Masole, One Maitumelo; Mudavanhu, Blessing
    The purpose of this thesis is to investigate the effect of the Basel Accords regulatory capital requirements on bank performance of the African banking sectors. The sample for the study included countries that had at a minimum adopted Basel II regulatory capital requirements and had data available for the research period. The countries selected were Botswana, Kenya, Malawi, Namibia, Tanzania, Uganda, Zambia and Zimbabwe. The empirical analysis adopted the multiple regression estimations to ascertain the effects of regulatory capital on bank performance. In addressing the research objectives, the study used the three proxies of regulatory capital and these were capital adequacy ratio (CAR), core capital ratio (CC) and total capital to total assets ratio (TCTA). The banking sector performance was measured by the financial soundness indicators of profitability (Return on Assets and Return on Equity) and financial intermediation (Loans to Deposit ratio). The empirical results showed that the regulatory capital requirements of CAR and TCTA had a positive effect on Return on Assets and Return on Equity, whereas the CC negatively affected the profitability ratios. The financial intermediation was negatively affected by both CAR and CC, and the positively affected by the TCTA. The mixed results of the impact of the Basel Accords capital requirements on the performance of banks was an indication that the regulatory standards can have unintended consequences on bank performance. Thus, it can be deduced that, the adoption of the Basel Accords in Africa should be informed by an in-depth analysis of the possible negative effects which should countered with appropriate regulatory policy decisions.