Corporate Finance

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Browsing Corporate Finance by Author "Berhanu Beza (PhD)"

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    Factors Affecting the Adoption of Financial Technologies in The Banking Industry of Ethiopia
    (Addis Ababa University, 2025-09) Akalu Atlaw; Berhanu Beza (PhD)
    The objective of this study is to identify the factors that influence the adoption of financial technologies in commercial banks in Ethiopia. The research has considered five major factors as explanatory variables of the adoption of financial technologies. These explanatory variables are perceived usefulness, security risk consideration, performance expectancy, facilitating condition, and financial technology regulations. As there has not been sufficient research conducted on the topic of the study in Ethiopian financial institutions in general and in commercial banks in particular, the researcher has conducted the study. A quantitative research approach was followed to determine the factors that affect technology adoption in commercial banks. Specifically, an explanatory design was employed to address the objectives of the study, and the timeframe of the study covers examining existing situations using cross-sectional data. Pertinent and adequate data were extracted from both primary and secondary data sources. Since the number of the target population was small, census methods were followed to collect data. The study has considered all of the 31 commercial banks, and pertinent data were gathered accordingly from all respondents. Questionnaire and document analysis techniques have been used to solicit information from respondents and documents. Both descriptive and inferential statistical analyses were used to analyze the data. SPSS version 27 software was used to conduct the statistical tests. The results of the research indicate that all of the explanatory variables considered in the model have a significant positive effect on the adoption of financial technologies in commercial banks in Ethiopia. The effect analysis shows that the model summary of the regression analysis has significant explanatory power with R square and adjusted R square of .926 and .911, respectively. The ANOVA test result of the study indicates that the model is fit to determine the cause-effect association relationship between the explanatory variables and the dependent variable. Specifically, perceived usefulness of the technology had the highest significant effects, while perceived security risk consideration had the least significant effect on the adoption of financial technologies. Finally, the study recommends that commercial banks be required to conduct an adequate assessment of the potential security risk of technologies before adopting the technology. Commercial banks are required to provide adequate and timely training for their employees about financial technologies and their use. Financial regulations are also expected to further improve the adoption of financial technologies in the banking industry.
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    Impact of Non-Interest Income Diversification on Financial Performance of Ethiopian Private Commercial Banks
    (Addis Ababa University, 2025-09) Nebyou Tekola; Berhanu Beza (PhD)
    This study explored how non-interest income shapes the financial performance of Ethiopian private commercial banks. It sought to determine whether revenue diversification plays a meaningful role in their profitability, considering operational efficiency and market dynamics. Using panel data from 2014/15 to 2023/24, a Fixed Effects (FE) regression model examined the connection between Non-Interest Income Ratio (NIIR), Net Interest Margin (NIM), Cost-to-Income Ratio (CIR), and Herfindahl- Hirschman Index (HHI) with Return on Assets (ROA) as the profitability indicator. The findings revealed that, non-interest income (β = 0.0034, p > 0.05) had no significant impact on profitability, indicating strong reliance on the traditional revenue from lending. Net Interest Margin (β = 0.159, p < 0.01) is a key driver of profitability, emphasizing banks' dependence on interest-based earnings. However, high operational costs (CIR, β = -0.054, p < 0.01) negatively affect financial performance, underscoring the need for cost efficiency improvements. Moreover, market concentration (HHI, β =-0.18, p < 0.01) reduces competition, limiting financial innovation and profitability growth. The study offers insights for bank executives, policymakers, and financial analysts, highlighting the need for strategic cost management, competitive market policies, and regulatory adaptation. Future research should explore the long-term effects of capital market expansion and investment banking growth, and cost optimization strategies on Ethiopian banking profitability, financial stability, and market competitiveness.