Determinants of Net Interest Margin in the Ethiopian Banking Industry
| dc.contributor.advisor | Emerie, Asmare (PhD) | |
| dc.contributor.author | Demie, Meshesha | |
| dc.date.accessioned | 2018-06-28T06:53:20Z | |
| dc.date.accessioned | 2023-11-08T14:37:12Z | |
| dc.date.available | 2018-06-28T06:53:20Z | |
| dc.date.available | 2023-11-08T14:37:12Z | |
| dc.date.issued | 2016-03 | |
| dc.description.abstract | Determinants of Net Interest Margin (NIM) of commercial banks vary from economy to economy due to country, region and firm specific factors, and variation in social and economic conditions. This research assesses and identifies the determinants of net interest margin in the banking industry of Ethiopia. It mainly used unbalanced panel data collected from annual reports of sixteen commercial banks operating in Ethiopia during the period 1997 to 2014. Specific macroeconomic data such as RGDP and Inflation were collected from annual reports of the MoFED and used to examine their impacts. In addition, expert opinions were obtained from bank experts working in both private and public commercial banks to examine the effects of changes in the internal and external factors on the performance of banks. Analysis was made based on two unbalanced panal data regression models focusing on the banking industry in general and private commercial banks independently. The findings of the study indicate that cost efficiency, implicit interest payment, competition and scale efficiency consistently have positive and significant effects on net interest margin. On the other hand, management efficiency has negative and significant effect on NIM in both cases. However, macroeconomic variables like inflation and gross domestic product do not seem to have significant effect on the determination of NIM. Thus, it is possible to conclude that internal factors are indispensable determinants of bank performance in Ethiopia. As a result, all commercial banks are expected to consider operational efficiency and business growth to maximize their return. Therefore, executives of banks, bank policy advisors and the monetary authority need to focus on these two pillars performance to ensure optimal NIM. Keywords: Net interest margin, banking industry, macroeconomic variables, private banks, banking performance | en_US |
| dc.identifier.uri | http://etd.aau.edu.et/handle/123456789/4398 | |
| dc.language.iso | en_US | en_US |
| dc.publisher | Addis Ababa University | en_US |
| dc.subject | Net interest margin | en_US |
| dc.subject | Banking industry | en_US |
| dc.subject | Macroeconomic variables | en_US |
| dc.subject | private banks | en_US |
| dc.subject | Banking performance. | en_US |
| dc.title | Determinants of Net Interest Margin in the Ethiopian Banking Industry | en_US |
| dc.type | Thesis | en_US |