The financial soundness of the Algerian commercial banks

Bounaas, Khaoula; Bennamoun, Hamadou

مجلة التحليل الاقتصادي ودراسات التنمية
Volume 1, Numéro 2, Pages 218-234
2022-12-15

The Financial Soundness Of The Algerian Commercial Banks

Authors : Bounaas Khaoula . Bennamoun Hamadou .

Abstract

The Algerian banking system has passed through many stages and reforms that have encouraged opening the banking sector to private investment to increase the competition level and improving the bank’s performance. Due to these reforms, the banking system is facing deep and varied challenges which has increased in recent years. This study aims to investigate the soundness of the Algerian banking system after the reforms of the banking system in 2011. The study measures the financial stability by using the Financial Soundness Indicators, which include 3 main indicators: capital-based; asset-based; and income- and expense-based indicators. The study utilizes a sample of 08 Algerian commercial banks (public and private) for the period 2012-2018. The findings reveal that both capital-based and asset-based indicators showed that Algerian banks were unable to maintain a sustain performance, while, income- and expense-based indicators revealed that Algerian banks are able to uphold a strong position.