Testing Z-Score Model on Lebanese Listed Banks

Abstract

The study examines the financial health of a sample of public listed banks in the Lebanese banking sector covering a period of 5 years from 2013 till 2017; using the z-score model for emerging markets and the z-score model for non-manufacturing companies. The results show that the emerging markets factor is above the upper limit of 2.6 for the whole sample, meaning that the studied banks don’t face any financial distress, which translates the current situation of such banks; it also shows an upward sloping trend in most of the banks Z-scores and its components. On the other side the study reveals that the usage of Z-score for non-manufacturing companies is inappropriate to be applied on banks in the Lebanese market.

Keywords: Banks, Financial institutions, Listed banks, Financial distress, Bankruptcy, Z-score, Non-manufacturing, Emerging markets.

DOI: 10.7176/RJFA/10-12-10

Publication date:June 30^th 2019