Determinants of profitability: The Case of Selected Private commercial Banks in Ethiopia
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Date
2020-06
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A.A.U
Abstract
The purpose of this study is to examine the determinants of profitability of private commercial banks in Ethiopia. The study employed an explanatory type of research design and quantitative approach. Secondary financial data on capital adequacy ratio, bank size, management efficiency ratio, funding cost ratio, interest rate, foreign exchange rate, and GDP on profitability. Return on equity (ROE) was used as a measure of profitability. The major findings of the study show that management efficiency ratio, have statistically significant and positive relationship with private commercial banks profitability. Further, the results from the panel regression suggest that, capital adequacy ratio, bank size, interest rate spread, foreign exchange rate have a negative and statistically significant relationship with private banks profitability. However, the relationship for debt to equity ratio and real domestic product growth is found to be statistically insignificant. banks in Ethiopia should not only be concerned about internal structures and policies, but they must consider both the external environment and the macroeconomic environment together in fashioning out strategies to improve their performance or profits
Description
A Project Research Paper Submitted In Partial Fulfillment Of The Requirements For The Award Of The Degree Of Master Of Business Administration (Mba)
Keywords
Determinants, Profitability, Private Commercial Banks