What drives bank income smoothing? Evidence from Africa

We investigate whether banks use loan loss provisions to smooth income and this behaviour is influenced by foreign bank presence, ownership institutional quality differences across African countries. examine 370 from 21 countries 2002 2021. find evidence that LLPs their when they are more profitable during economic boom or recession. Income smoothing persistent (i) among with a widely dispersed ownership, (ii) strong government (iii) weak ownership. also in have greater corruption control, better regulatory political stability. In contrast, moderate concentrated reduces smoothing. Bank reduced rule of law, high effectiveness, presence voice accountability institutions. The implication effective corporate governance can constrain the extent banks.