Revue d'économie et de statistique appliquée
Volume 19, Numéro 1, Pages 6-20

Risk And Profitability In Algerian Banks Using Macroeconomic And Bank Specific Variables: A Panel Regression Analysis

Authors : Sahraoui Fatma Zahra . Merhoun Malek .


This study investigates the relationship between risk management and financial performance in Algeria banks for the period 2010-2019. The study conducted a panel regression analysis, to estimates the variation of the performance measures using OLS, fixed and random effects methods, after that, a Hausman’s test was established to determine the appropriate model to estimate. The results show that financial performance in Algerian banks measured using ROA and ROE, have a significant relationship with both bank specific variables and macroeconomic variables: interest rate risk (IRR), funding liquidity ratio (FL), provision to total loans ratio (PTL), GDP, inflation, real exchange rate (USD/DZD) and to real interest rate. Findings also indicate that Algerian banks need to improve loan quality and have sound credit risk management procedures.


Risk management ; Financial performance ; Algerian banks ; ROE ; ROA