Browsing by Author "Gemechu Moges"

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    Determinants of Profitability of Commercial Banks in Ethiopia
    (Addis Ababa University, 2017-06) Gemechu Moges; Legesse Ethiopia
    This study examines the determinants of commercial banks profitability in Ethiopia by using panel data of thirteen sample commercial banks out of seventeen commercial banks currently operated in Ethiopia over the period 2010-2015.Since the data is secondary in nature, the quantitative research approach was used. Besides, the fixed effect model was used. The factors used in this study include bank size, loan, expense management, revenue diversification, liquidity, capital adequacy and interest income and Return on Asset (ROA) were used to measure the bank’s profitability. The findings of the study show that bank size, loan, revenue diversification, capital adequacy and interest income have statistically significant and positive relationship with profitability. On the other hand, expense management (operating expense) has a negative and statistically significant relationship with banks’ profitability. However, the relationship between liquidity management and profitability is found to be statistically insignificant. The study suggests management bodies of commercial bank should strive to strengthen the identified significant factor banks size, loan, revenue diversification, capital adequacy and interest income as this will enhance the performance of the banks. Moreover, commercial banks need to invest in recent technologies and management skills which minimize operational expense as this will affect positively on their performance. Key words: profitability, commercial banks, returns on asset