Banking Governance and Financial Profitability in the CEMAC Zone

Abstract

This paper investigates the relationship between internal governance mechanisms, specifically the impact of the board of directors, and the financial profitability from a sample of 20 credit banks in the CEMAC zone over the period 2010-2017. By mobilising a quantitative methodology, using STATA 12.00 software, the results suggest that institutional and foreign directors have a significant and positive impact on financial profitability, in line with theoretical predictions, while public directors have a significant negative impact on profitability. Sufficiently large banks are more profitable than their smaller counterparts, while board size has no significant impact on bank financial profitability. The study recommends further privatisation of state-owned banks.

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