The determinants of banking sector performance in Tanzania: A pre-post Treasury Single Account analysis
AbstractThis study examined how the Treasury Single Account (TSA) policy, aimed at withdrawing government deposits from commercial banks, impacted the Tanzanian banking sector’s performance in relation to ownership concentration, bank size, and macroeconomic variables. Balanced panel dataset compris...
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2023-10-01
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| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2023.2282812 |
| _version_ | 1797554301601579008 |
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| author | Goodhope Hance Mkaro Lin Sea Lau Chee Keong Choong |
| author_facet | Goodhope Hance Mkaro Lin Sea Lau Chee Keong Choong |
| author_sort | Goodhope Hance Mkaro |
| collection | DOAJ |
| description | AbstractThis study examined how the Treasury Single Account (TSA) policy, aimed at withdrawing government deposits from commercial banks, impacted the Tanzanian banking sector’s performance in relation to ownership concentration, bank size, and macroeconomic variables. Balanced panel dataset comprising thirty (30) banks, from 2010Q1 to 2020Q4, was analyzed. Regression results revealed that, while foreign and state-owned banks were more resilient, private and domestic banks’ performance deteriorated after TSA adoption. Small banks survived the negative TSA shock while the performance of the larger ones was negatively affected. The effects of interest rate, GDP, and exchange rate turned negative whilst the inflationary effects on bank performance were enhanced after TSA. The study enhances comprehension of the relatively new TSA system in Africa while addressing a literature gap by exploring its influence on banking sector’s performance across various bank classifications. Following TSA adoption, regulators should strike a balance between tightening or relaxing regulatory limits while enforcing banks’ compliance to ensure the sector’s stability. Government support for key economic growth-driving sectors potentially attracts more deposits into the banking system, thus promoting the sector’s stability. Banks are encouraged to innovate strategies to attract deposits from the general public, while deviating from dependence on government funds. |
| first_indexed | 2024-03-10T16:30:03Z |
| format | Article |
| id | doaj.art-cfec86d37f6d4350b09e9e9d3e9c4c26 |
| institution | Directory Open Access Journal |
| issn | 2332-2039 |
| language | English |
| last_indexed | 2024-03-10T16:30:03Z |
| publishDate | 2023-10-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj.art-cfec86d37f6d4350b09e9e9d3e9c4c262023-11-20T12:57:19ZengTaylor & Francis GroupCogent Economics & Finance2332-20392023-10-0111210.1080/23322039.2023.2282812The determinants of banking sector performance in Tanzania: A pre-post Treasury Single Account analysisGoodhope Hance Mkaro0Lin Sea Lau1Chee Keong Choong2Faculty of Business and Finance, Universiti Tunku Abdul Rahman, Perak, MalaysiaFaculty of Business and Finance, Universiti Tunku Abdul Rahman, Perak, MalaysiaFaculty of Business and Finance, Universiti Tunku Abdul Rahman, Perak, MalaysiaAbstractThis study examined how the Treasury Single Account (TSA) policy, aimed at withdrawing government deposits from commercial banks, impacted the Tanzanian banking sector’s performance in relation to ownership concentration, bank size, and macroeconomic variables. Balanced panel dataset comprising thirty (30) banks, from 2010Q1 to 2020Q4, was analyzed. Regression results revealed that, while foreign and state-owned banks were more resilient, private and domestic banks’ performance deteriorated after TSA adoption. Small banks survived the negative TSA shock while the performance of the larger ones was negatively affected. The effects of interest rate, GDP, and exchange rate turned negative whilst the inflationary effects on bank performance were enhanced after TSA. The study enhances comprehension of the relatively new TSA system in Africa while addressing a literature gap by exploring its influence on banking sector’s performance across various bank classifications. Following TSA adoption, regulators should strike a balance between tightening or relaxing regulatory limits while enforcing banks’ compliance to ensure the sector’s stability. Government support for key economic growth-driving sectors potentially attracts more deposits into the banking system, thus promoting the sector’s stability. Banks are encouraged to innovate strategies to attract deposits from the general public, while deviating from dependence on government funds.https://www.tandfonline.com/doi/10.1080/23322039.2023.2282812ownership concentrationsizebank performancetreasury single accountTanzania |
| spellingShingle | Goodhope Hance Mkaro Lin Sea Lau Chee Keong Choong The determinants of banking sector performance in Tanzania: A pre-post Treasury Single Account analysis Cogent Economics & Finance ownership concentration size bank performance treasury single account Tanzania |
| title | The determinants of banking sector performance in Tanzania: A pre-post Treasury Single Account analysis |
| title_full | The determinants of banking sector performance in Tanzania: A pre-post Treasury Single Account analysis |
| title_fullStr | The determinants of banking sector performance in Tanzania: A pre-post Treasury Single Account analysis |
| title_full_unstemmed | The determinants of banking sector performance in Tanzania: A pre-post Treasury Single Account analysis |
| title_short | The determinants of banking sector performance in Tanzania: A pre-post Treasury Single Account analysis |
| title_sort | determinants of banking sector performance in tanzania a pre post treasury single account analysis |
| topic | ownership concentration size bank performance treasury single account Tanzania |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2023.2282812 |
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