Bank profitability and economic growth in the emerging markets: The mediating role of stability

Bank profitability is of significant importance to economic growth since it determines banks’ resilience and their ability provide credit (Raddatz et al., 2020). However, high bank (margins) as in the Sub-Saharan Africa (SSA) region can hurt through inefficient financial intermediation (Rahman 2023). It is, therefore, imperative examine interplay between SSA. This study investigates contribution performance SSA by examining impact on growth, well mediating role stability this interplay. A panel dataset for 26 economies that spans from 2000 2020 was collected analyzed. System generalized method moments (GMM) structural equation model (SEM) were used analysis. Surprisingly, finds does not affect economies. evidence attributed form margins low lending volumes. a positive noted low-income economies, supporting notion banks dominate with underdeveloped markets. The also partial mediation profitability-growth nexus