{"title":"The Impact of COVID-19 on Banking Sector Returns, Profitability, and Liquidity in South Africa","authors":"Faeezah Peerbhai, Damien Kunjal","doi":"10.32479/ijefi.14950","DOIUrl":null,"url":null,"abstract":"The COVID-19 pandemic, which initially started as a health crisis, has had widespread economic impacts on various industries in the global economy. The banking sector, in particular, was significantly impacted by fiscal and monetary responses which were implemented to reduce the closure of several businesses and stabilize markets. Given that banks are regarded as systemically important financial institutions, this heightened uncertainty increased the possibility of a financial crisis because instabilities in the banking sector could have further detrimental effects on national and global economies. Therefore, the objective of this study was to explore the effect of the COVID-19 pandemic on the South African banking sector. To achieve this objective, the study analysed the returns, profitability, and liquidity of banks listed on the Johannesburg Stock Exchange using a panel regression approach. Together, the results of the study revealed that the profitability and liquidity of banks were negatively impacted by the COVID-19 pandemic, however, the excess bank stock returns generated by investors were not affected. These findings may serve as reference to policymakers when developing policies which regulate the banking sector in order to improve performance and ensure liquidity during periods of increased market uncertainty.","PeriodicalId":30329,"journal":{"name":"International Journal of Economics and Financial Issues","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2024-03-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Economics and Financial Issues","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.32479/ijefi.14950","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 0
Abstract
The COVID-19 pandemic, which initially started as a health crisis, has had widespread economic impacts on various industries in the global economy. The banking sector, in particular, was significantly impacted by fiscal and monetary responses which were implemented to reduce the closure of several businesses and stabilize markets. Given that banks are regarded as systemically important financial institutions, this heightened uncertainty increased the possibility of a financial crisis because instabilities in the banking sector could have further detrimental effects on national and global economies. Therefore, the objective of this study was to explore the effect of the COVID-19 pandemic on the South African banking sector. To achieve this objective, the study analysed the returns, profitability, and liquidity of banks listed on the Johannesburg Stock Exchange using a panel regression approach. Together, the results of the study revealed that the profitability and liquidity of banks were negatively impacted by the COVID-19 pandemic, however, the excess bank stock returns generated by investors were not affected. These findings may serve as reference to policymakers when developing policies which regulate the banking sector in order to improve performance and ensure liquidity during periods of increased market uncertainty.
期刊介绍:
International Journal of Economics and Financial Issues (IJEFI) is the international academic journal, and is a double-blind, peer-reviewed academic journal publishing high quality conceptual and measure development articles in the areas of economics, finance and related disciplines. The journal has a worldwide audience. The journal''s goal is to stimulate the development of economics, finance and related disciplines theory worldwide by publishing interesting articles in a highly readable format. The journal is published Bimonthly (6 issues per year) and covers a wide variety of topics including (but not limited to): Macroeconomcis International Economics Econometrics Business Economics Growth and Development Regional Economics Tourism Economics International Trade Finance International Finance Macroeconomic Aspects of Finance General Financial Markets Financial Institutions Behavioral Finance Public Finance Asset Pricing Financial Management Options and Futures Taxation, Subsidies and Revenue Corporate Finance and Governance Money and Banking Markets and Institutions of Emerging Markets Public Economics and Public Policy Financial Economics Applied Financial Econometrics Financial Risk Analysis Risk Management Portfolio Management Financial Econometrics.