Determinants of Financial Performance of Commercial Banks in Ethiopia

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The aim of the study is to examine the determinants of financial performance of commercial banks in Ethiopia. In order to investigate the determinants of financial performance, seven commercial banks were taken as sample covering the period of time 2000 to 2021GC. Return on asset is used as a profitability indicator in the research. Data are collected from annual report of the respective banks via National bank of Ethiopia. Descriptive statics, correlation and multiple linear regression models were employed for the analysis of data. According to the results obtained from the analysis, it is determined that capital adequacy, asset quality, bank size, management efficiency, earning ability of the banks have a significant effects on the profitability of Ethiopian commercial banks. Whereas, liquidity management and annual inflation have an insignificant effects on the Ethiopian commercial banks performance. Based on the findings it is recommended that the concerned commercial banks management should take appropriate measurements to put their banks on the stable profit position.



Financial Performance, Commercial Banks