Browsing by Author "Buzuayehu Wubu"

Now showing 1 - 1 of 1
  • No Thumbnail Available
    Item
    The Effect of Credit Risk on Financial Performance in Commercial Bank of Ethiopia (Camel Approach)
    (A.A.U., 2024-06-04) Buzuayehu Wubu; Habtamu Berhanu
    This study investigates the effect of credit risk on the profitability, measured by the Return on Assets, of the Commercial Bank of Ethiopia. The research utilized secondary data sourced from the audited financial reports of the CBE, the National Bank, and the CBE’s portal page, covering the period from 2009 to 2023. Analysis was conducted using STATA 15 software, employing descriptive statistics and time series data to conduct linear regression. The findings reveal a substantial and inverse correlation between ROA and Non-Performing Loans , Capital Adequacy Ratio, Bank Productivity and Net Interest Margin. Conversely, ROA shows a positive correlation with Loan Growth Rate. The recommendations from this study suggest that the Commercial Bank of Ethiopia should enhance its credit risk management capabilities. Additionally, it is advised that the bank should manage staff-related expenses more effectively and ensure that economical profitability is considered alongside financial profitability for each branch. To maximize profitability (ROA), the CBE should prioritize credit risk management strategies to minimize non-performing loans.