Browsing by Author "Hermella Mesfin"
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Item Determinants of Financial Stability of Commercial Banks in Ethiopia(A.A.U, 2024-05-02) Hermella Mesfin; Dakito Alemu (PhD)This study examined the factors affecting commercial banks' financial stability in Ethiopia over a year (2015-2023). The study focuses on commercial banks in Ethiopia, established before the year 2015 including one state-owned bank and the remaining private banks. Purposive sampling was used to acquire data on nine commercial banks' audited financial accounts. Data were analyzed using balanced panel data and a quantitative research technique. Results are computed using fixed effect regression models. The study found a substantial positive correlation between bank capital adequacy ratio, asset quality, competition and financial stability. The study also found that bank financial stability was negatively correlated with earning capacity, however this association was not statistically significant. The management efficiency, and liquidity has a positive and statistically insignificant correlation with the financial stability of commercial banks in Ethiopia. This study suggests that banks, regulators, and policymakers prioritize capital adequacy ratio, asset quality, and competition to ensure financial stability of commercial banks in Ethiopia.