The Impact of Branch Expansion on Deposit Mobilization, Loan Disbursement and Profitability The Case of Lion International Bank S.C.
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Date
2019-04
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Addis Ababa University
Abstract
The purpose of this paper is to examine the impact of branch expansion (government policy, population growth, site of branch office and branch office rent) on deposit mobilization, loan disbursement and profitability in the context of Lion International bank S.C. The study was limited to the Bank’s staffs in Addis Ababa city and the sample branches and Head office organs were selected based on convenience sampling technique. Accordingly, primary data were collected through a survey using a structured questionnaire with a sample of 108 staffs who are serving the bank by assuming different positions. Returned questionnaire were analyzed using correlation and regression analysis through the use of statistical package for social sciences (SPSS) version 22. The finding indicates that among the four independent variables, government policy is the first most significant factor that is perceived to be important in deposit mobilization, loan disbursement and profitability of Lion International Bank S.C. followed by site of branch. Population growth takes the third place and branch office rent is regarded as the fourth most important factor of deposit mobilization, loan disbursement and profitability. Government policy, population growth and site of branch office are positively related with all the dependent variables(deposit mobilization, loan disbursement and profitability) while branch office rent is negatively related with loan disbursement and profitability. In addition to this, there was a considerable growth in bank branch network, deposit, loan and profits. The relationship between these financial performance factors and branch network was significant. This means that the banks’ growth in deposit, loan and profit highly relates to branch network. The bank used in this study may limit the applicability of the findings to the whole bank industry in our country. Thus, the student researcher suggests that further studies can examine more branches and different banks in the industry, which includes both private and government banks
Description
A thesis submitted in partial fulfillment of the requirements for the Degree of Master in Business Administration.
Keywords
Branch expansion, Deposit mobilization, Loan disbursement, Lion International Bank S.C.