Browsing by Author "Emerie Asmare"

Now showing 1 - 12 of 12
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    Analyzing Financial Performance of Commercial Banks in Ethiopia: CAMEL Approach
    (Addis Ababa University, 2015-05) Getahun Mulualem; Emerie Asmare
    The objective of this study was to analyze the financial performance of Ethiopian Commercial Banks using CAMEL approach and rank the banks based on their performance as well as to test the existence of the relationship between the selected CAMEL factor measurements with the profitability measures. The financial performance of Fourteen Commercial Banks examined by using panel data from year 2010 to year 2014.The study used quantitative research approach and secondary financial data are analyzed by using multiple linear regression model for two profitability measures: ROE and ROA. Fixed effect regression model was applied to investigate the impact & relationship of CAMEL factors: Capital adequacy, Asset Quality, Management efficiency, Earning and Liquidity with bank profitability measures separately. The empirical result shows that capital adequacy, Asset Quality and Management efficiency have negative relation whereas earning and liquidity shows positive relationship with both profitability measures with strong statically significance except Capital Adequacy which is insignificant for ROA whereas Asset quality for ROE. The study suggests focusing and reengineering the banks internal drivers could enhance the profitability of commercial banks in Ethiopia. Furthermore the ranking result based showed the first one by capital adequacy, asset quality and liquidity ratio was Bunna International Bank while Commercial Bank of Ethiopia by Management efficiency and Earning ratio and finally Wogagen Bank was the first by the composite rate
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    Capital Investment Decisions on Information Technology and its Impact on the Performance of Private Commercial Banks in Ethiopia
    (Addis Ababa University, 2016-03) Afework Rahel; Emerie Asmare
    Over the years various studies have been made on the relation between technological investments and the performance of commercial banks and contradicting results were observed among researches. The purpose this study is to evaluate capital investment decisions on information technology and its impact on the performance of private commercial banks in Ethiopia. In order to achieve this objective mixed research approach with qualitative and quantitative methods is used on panel data of 6 private commercial banks for period of ten years starting from 2005 to 2014. The relation between dependent and independent variables is analyzed using multiple regression model by taking banks profitability measure ROA as dependent variable and IT capital, labor, capitalization, market concentration, and inflation as independent variables using OLS random effect model on Eviews 8. From the study result, except for IT capital the rest of explanatory variables show statistically significant impact on the ROA. The main variable shows there is positive relation between banks IT investment and profitability but the degree of impact measured as statistically insignificant. It is also observed that private commercial banks in Ethiopia has low experience of evaluating information technology investments before and after investment is made. In general the research concluded that banks will have better future with more technological advancements, if they are able to make sound information technology related investments with good management and IT governance system. Key words: IT capital, commercial banks performance, IT impact on performance
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    Current Practices, Challenges and Prospects of Using Credit Cards as a Payment Method: The Case of Ethiopian Airlines Enterprise
    (Addis Ababa University, 2015-06) Getaye Temesgen; Emerie Asmare
    This research paper examined the current practices, challenges, and prospects of using credit cards as a payment method by Ethiopian Airlines and it is done by adopting concurrent mixed research approach. Qualitative methods were employed by means of interviews and review of related documents while quantitative methods were used through survey of sales agents, area managers, officers and senior managers on the area. A total of 65 questionnaires were distributed to officers and managrs and 47 were collected and 6 interviews were conducted with directors and managers of the airline and that of merchant banks. The main findings of the study were that the internal control systems of the airline are not adequate enough to prevent card frauds and mitigate the credit card financial risk. Adequate and recurrent trainings for operational and back office staff on credit card acceptance and fraud prevention and having well-organized credit card desk with skilled and sufficient man power are the main critical success factors that are not either in existence or are not effective. Management of the airline threfore, need to take immediate corrective action to the increasing threat of card fraud by means of provision of awareness and recurrent training for operational and back office staff; implementing the latest fraud screening and fraud prevention tools in all of the airlines’ sales cahnnels; establish well-organized credit card desk with well trained and suficient staff; establish clear policies and procedures with clear assignment of responsibilities among operational and support staff; and ensure that there is seamless and integrated system. Key words: Card payment industry; chargeback, card fraud, payment method, merchant, issuing bank, card schemes
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    Design of Prototype Information Support System for Biodiversity Studies on Ethiopia
    (Addis Ababa University, 1994-06) Emerie Asmare; Neelameghan A. (Professor); Tadesse Taye (PhD)
    The direct benefits of biological resources to humanity (for food, fuel , fiber. medicines, drugs, and raw materials f or host of manufacture in technologies and purposes), and the intangible scientific, ethical / moral, aesthetic recreational values and the ecological services (in protecting watersheds. cycling nutrients, combating erosion , enriching soil , regulating water-flow, trapping se dements, mitigating pollute on , and controlling pest population s ) have been recognized f o r a long time . However . biological resources have not been given due care and attention by policy makers, planners, and the Public. Indeed. The large scale problems of population growth and inappropriate development strategies a r e degrading the land , water , and a atmosphere and progressively extinguishing the Earth's organisms and habitats t hey inhabit . The great loss of biod iversity suggests t he need f or conserving and managing it to ensure sustainable deve lopment. The thesis d discusses some of the research areas/topics critical to the conservation of biodiversity. It highlights the biological aspect as well as the soc i o - economic fact ors and cultural context that must be considered in successful. long-term con serration work and finally proposes and briefly discusses a national biodiversity conservation strategy to be drawn and implemented As part of conserving and managing biodiversity, it is necessary to identify what i s not known about biodiversity and create the means to increase and disseminate knowledge . The challenge of biodiversity conservation, management, and research entails not only gathering of information, but its management , application, and communication. Provision of the information needed to decision makers in monitoring, formulating policy and designing programs to conserve biodiversity is critical. To enhance the availability and application of scientific information for managing and con serving biological diversity. Setting up compute r databases and inventories and networks and harnessing the capabilities of remote sensing and geographic information systems are examined. From this point of view, again, a survey ha s been conducted on local institutions concerned wi th biodiversity , the findings analyzed, current problems and constraints identified. Prototype databases f o r plants, animals. national parks , germplasms, referral deference services have been designed; strategies for developing and implementing the databases discussed; and a national biodiversity information and monitoring system (NBIMS) proposed.
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    Determinants of Capital Adequacy Ratio: An Empirical Study on Commercial Banks of Ethiopia
    (Addis Ababa University, 2015-06) Wondifraw Dawit; Emerie Asmare
    This study was conducted to examine bank specific and macroeconomic determinant factors of Capital Adequacy ratios of commercial banks in Ethiopia. To this end, the researcher collected secondary sources of panel data over the period 2002-2013from eight senior commercial banks in Ethiopia selected based on purposive sampling. The research finding revealed that Bank size (SIZE), liquidity (LQR) and Non-Performing Loan (NPL) ratio had positive whereas Inflation (INF) had negative, but insignificant effect on CAR of commercial banks in Ethiopia. The share of deposit (DAR), Loan(LAR), Loan provision (LPR), Bank risk (RAR), Return on equity and Economic growth (GDP) had negative and statistically significant effect on Capital Adequacy ratios of commercial banks in Ethiopia. Furthermore, Return on Asset (ROA) and Net interest Margin (NIM) had positive and statistically significant effect on CAR of commercial banks in Ethiopia. The finding of this study is significant as it revealed to bank managers the relevant factors to take into consideration when they make financial policies to maintain at least the expected required level of CAR. Based on the findings, the study recommends to the management of National Bank of Ethiopia to revise the existing minimum requirement based on Basel III accord and also to influence commercial banks in order to disclose all component of CAR in detail in their annual financial statement
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    Determinants of Commercial Banks Deposit Mobilization Evidence from Private Commercial Banks In Ethiopia
    (Addis Ababa University, 2016-02) Gerawork Kibebe; Emerie Asmare
    Deposit mobilization is a fundamental part of banking activity. (Banson, et al, 2012), well-defined that “mobilization of deposit for a bank is as essential as oxygen for human being” and “Deposits are the life blood of banking companies”. Hence, deposit mobilization is critical to Banks. The research tried to determine factors that affect deposit mobilization, the associated costs of deposit mobilization in private banks. Therefore, the study adopts mixed approach to gather the data. The primary data is gathered using questionnaire. Sampling method of the primary data is purposive sampling technique. While the secondary sources of data were extracted from annual reports of all private commercial banks of Ethiopia, data from National Bank of Ethiopia (NBE) and from Central Statistical Authority (CSA). Regarding the secondary data, the study used time series data from 2000-2014 for analysis made using Classical linear regression method. The study shows that, Age dependency ratio, Investment and money supply, are the most significant factors of deposit mobilization activity. The other variable such as Per capita income has insignificant power to influence the dependent variable. As a result, the study recommended that, Government should increase investment so as to promote economic growth to mobilize deposits since there exists a positive relationship between Deposit and Investment. And private banks ought to increase number of branches to mobilize more resources
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    Determinants of Cost of Financial Intermediation: Empirical Study on Commercial Banks in Ethiopia
    (Addis Ababa University, 2015-06) Getachew Belay; Emerie Asmare
    This paper investigates the determinants of cost of financial intermediation (CFI) of Ethiopian commercial banking sector during the period from 2000 to 2013. The study was based on the hypothesis that cost of financial entermediation in Ethiopian banks‟ is determined by bank, industry and macro-economic related factors. Several theories and empirical outcomes were propounded to explain the determinants of cost of financial intermediation proxied by net interest margin. The variables were chosen based on findings from both empirical and theoretical literature. A quantitative research approach and explanatory design were adopted in carrying out this research. Secondary data were collected from selected eight commercial banks out of nineteen banks using purposive sampling technique. Based mainly on the Seminal Ho and Saunders, 1981 dealership model and extensions thereto, the study employed panel data estimation techniques to analyze the influence of bank, industry and macroeconomic factors on CFI. The fixed effect regression technique was used to estimate the model using the econometric package EViews 8. The results obtained indicated that bank intermediation margin are high in Ethiopia and it is generally driven by banks, industry and macro-economic factors. And specifically the estimation results show that operating costs, capital of banks, market concentration, market share, economic growth and inflation have a positive and significant effect on CFI. Credit risk, asset size, liquidity risk, and opportunity cost of reserve have a negative and significant effect on CFI. Profitability is not significant in determining CFI. The study recommends banks to improve operational efficiency, NBE to instill competition with in banks and policy makers to promote favourable economic situation. Further studies were recommended in the areas by considering additional variables and considering newly emerging banks Keywords: Ethiopian Banking Sector, Net Interest Margin (NIM), Cost of Financial Intermediation (CFI)
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    Determinants of Net Interest Margin in the Ethiopian Banking Industry
    (Addis Ababa University, 2016-03) Demie Meshesha; Emerie Asmare
    Determinants of Net Interest Margin (NIM) of commercial banks vary from economy to economy due to country, region and firm specific factors, and variation in social and economic conditions. This research assesses and identifies the determinants of net interest margin in the banking industry of Ethiopia. It mainly used unbalanced panel data collected from annual reports of sixteen commercial banks operating in Ethiopia during the period 1997 to 2014. Specific macroeconomic data such as RGDP and Inflation were collected from annual reports of the MoFED and used to examine their impacts. In addition, expert opinions were obtained from bank experts working in both private and public commercial banks to examine the effects of changes in the internal and external factors on the performance of banks. Analysis was made based on two unbalanced panal data regression models focusing on the banking industry in general and private commercial banks independently. The findings of the study indicate that cost efficiency, implicit interest payment, competition and scale efficiency consistently have positive and significant effects on net interest margin. On the other hand, management efficiency has negative and significant effect on NIM in both cases. However, macroeconomic variables like inflation and gross domestic product do not seem to have significant effect on the determination of NIM. Thus, it is possible to conclude that internal factors are indispensable determinants of bank performance in Ethiopia. As a result, all commercial banks are expected to consider operational efficiency and business growth to maximize their return. Therefore, executives of banks, bank policy advisors and the monetary authority need to focus on these two pillars performance to ensure optimal NIM. Keywords: Net interest margin, banking industry, macroeconomic variables, private banks, banking performance
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    Determinants of Non-Performing Loans: The Case of the Ethiopian Commercial Banks
    (Addis Ababa University, 2015-06) Meshesha Gebru; Emerie Asmare
    Loans and advances form a greater portion of the total assets in banks. These assets generate huge interest income for banks which to a large extent determine the financial performance of banks. However, some of these loans usually fall into non-performing status and adversely affect the performance of banks. In view of the critical role banks play in an economy, it is essential to identify problems that affect the performance of these institutions. Non-performing loans is one of these problems. Therefore, a research on determinants of non-performing loans, the case of Ethiopian Commercial banks was conducted on twelve banks. The research seeks to find out the determinants of non-performing loans in the Ethiopian commercial banks. Structured questionnaire was used to collect data for the study from both private and state-owned banks. The study found that poor credit analysis and unsound lending practices, lack of focused loan monitoring and follow-up, lenient credit terms and conditions, compromised integrity, and fund diversion as the major factors that contribute to loan default. Thus, it is suggested that banks should put in place a vibrant credit process that ensures proper customer selection, robust credit analysis, proactive monitoring, ethical standards, and prudent application of polices that govern bank loans. Key words: Non Performing Loans (NPLs); Credit Analysis, Credit Process
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    The Impact of Information & Communication Technology on Ethiopian Private Banks’ Performance: The Case of Two Selected Ethiopian Private Banks
    (Addia Ababa University, 2015-05) Nigussie Yalew; Emerie Asmare
    This research aimed at finding out the impact of Information and Communication Technology (ICT) on performance of Ethiopian Private Banks using Dashen Bank S.C. and United Bank S.C. as a case study. It used customers’ satisfaction and employees’ performance/efficiency as independent variables to measure performance of the banks. In addition the research tried to investigate major challenges encountered by customers in using Technology-based services/products. Structured questionnaire was used to collect relevant data for the research. The data gathered through the questionnaire was analyzed by Statistical Package for Social Science (SPSS) version 16. T-statistic test was carried out to determine the significance of the independent variables on dependent variable. Simple linear regression analysis was also carried out to determine the effect of the independent variables on dependent variable. It was found from the research that Information and Communication Technology indeed has a positive significance impact on performance of Ethiopian Private Banks in respect with satisfying their customer and improve their employees’ performance. The simple linear regression analysis also showed a positive coefficient of 0.803 and 0.725 for customer satisfaction and employees performance respectively, which simply mean that there is strong positive relationship between Information and Communication Technology and customers’ satisfaction and employees’ performance of the banks. The research also identified that the major challenges discouraging customer to use Technology-based services/products of the banks are; mobile and internet connectivity problem and lack of Information and Communication infrastructures. In general, Information and Communication Technology has positively impacted performance of Ethiopian private banks. Key Words: ICT, Customer satisfaction, Employee performance, bank performance, challenges.
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    The impact of NBE bills purchase on the profitability of private commercial banks: An Empirical Study on Ethiopian Private Commercial
    (Addis Ababa University, 2012) Tesfaye Memru; Emerie Asmare
    The purpose of this study is to investigate the impact of NBE bills purchase on the profitability of private commercial banks in Ethiopia by using panel data of sixteen private commercial banks with a total of 64 observations from year 2011 to2014. The study used quantitative research approach and secondary financial data are analyzed by using multiple linear regression models for the three bank profitability measures; Return on Asset (ROA), Return on Equity (ROE), and Net Interest Margin (NIM). Regression model was applied to investigate the impact of Capital adequacy, NBE bills, liquidly & total loans to total asset. Growth rate on major bank profitability measures (i.e., (ROA), (ROE), and (NIM) separately). The study finds that exposure to government bill has moderate effect on banks profitability in the past years. However if the policy persist without amendment or phase out it will definitely create a significant negative impact on banks performance. On the other hand the bills seems contributed positively to perform via mopping up the excess liquidity holding of banks or to invest excess funds in earning government securities than the customary practices of holding liquid asset in zero earning account at the NBE. In addition, it instigated banks to some extent provide focus on other fee generating sources. The significant relation of the NIM with performance revealed that banks respond to the policy through adjusting their loan price in a way to compensate for the opportunity they lost. Consequently the banks cost related to bill purchase to some extent seems to be covered by borrowers but the increase in the rate of interest has not resulted in materialized high default risk. In general, the result of the study shows the effect of the policy measure is mitigated by the excess liquidity standing of banks during the policy formulation, the likely possibility to expand to other fee generating services, stable liability price and banks discretion to adjust their asset price. Nevertheless, the decline trend in the share of loans from the total asset could have negative effect on the long run which in fact to some extent will be moderated by the maturity of part (but significant sum) of the bills in few years time. The study focused on the historical impact of the bill measure: hence its long run effect requires further exploration.
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    Investment on Accounting Information System (IAIS) Effect on Bank Performance: [A Case of Private Commercial Banks In Ethiopia]
    (Addis Ababa University, 2015-06) Kebede Taddesse; Emerie Asmare
    The main aim of this study is to assess the impact of Investment made on Accounting Information System and its effect on Banks performance in the case of private commercial Banks in Ethiopia. In order to fulfill the stated objective an exploratory research design with a quantitative panel data was used. To this end,the researcher relied on consecutive ten years Annual Audited Financial Report of selected seven Private Commercial Banks in Ethiopia using a purposive sampling method for the period 2005 – 2014.The study employed a multivariate regression model using Return on Asset (ROA), Return on Equity (ROE) and Productivity (PROD) as a dependent variable for measuring the financial performance of the selected Banks and three independent explanatory variables used as a component of Accounting Information Systems; Infrastructure, software and Services. The researcher also controlled for the effects of size (measured by log of total assets). Based on a balanced panel constructed ordinary least squares (OLS) and random effects, the study finds that Investment on AIS’s services provided by IT personnel payroll, hiring, training, evaluating and related costs has a significant and positive impact followed by investment on AIS’s software which was consistent with the researcher’s expectation. While Investment on AIS’s infrastructure was found to have a negative but insignificant impact. The remaining variable, SIZE had positive but insignificant effect on their performance. The overall results revealed that Investment on AIS have a significant impact on the financial performance of Private commercial Banks in Ethiopia.Hence, based on the findings of the study the researcher conclude that, performance of infrastructure was not productive as expected and should have to consistent with the quality of AIS’s service and appropriate implementation of AIS’s software. Finally, as was indicated in the scope and limitation section this study was only confined to the Private commercial Banks in Ethiopia. Hence, the study could be further enhanced by including the State owned banks. The study could also developed by including more independent and control variables to the regression model. Moreover, if further studies should supplemented with qualitative data, the findings would be more informative. Key words: Investment on Accounting Information System, Private Bank Performance, Panel, Ethiopia