Browsing by Author "Nardos Birhanu Mekonnen"

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    Determinants of Financial Performance: the Case of Selected Private Commercial Banks of Ethiopia
    (A.A.U., 2023-06-02) Nardos Birhanu Mekonnen; Alem Hagos
    This study examines the determinants of the financial performance of selected private commercial banks in Ethiopia by using panel data from ten sample private commercial banks that have worked in Ethiopia for the period 2015–2022. Since the data is secondary in nature, a quantitative approach to research was used. Besides, an explanatory research design was used. In this study, six factors were considered: credit risk, solvency risk, inflation rate risk, interest rate risk, liquidity risk, and foreign rate risk. Moreover, ROA was used to measure financial performance. This study used a panel regression model to examine the determinants of financial performance. Based on the regression result, credit risk, solvency risk, inflation rate risk, and interest rate risk, had a negative and significant influence on the financial performance of Ethiopian private commercial banks. On the contrary, liquidity risk and foreign exchange rate risk had a significantly positive effect on financial performance. Determinants of financial performance have an effect on the sampled banks' performance, which over time has an effect on it. Credit risk and foreign exchange risks can have an impact on a bank's lending and borrowing, which in turn can have an effect on the performance of the bank's finances. Similarly to that, inflation is a global phenomenon over extended periods of time. Almost every nation in the world today is impacted by the threat of inflation