Sewale, Abate (PhD)Wondwossen, Getachew2018-11-042023-11-042018-11-042023-11-042018-03http://etd.aau.edu.et/handle/123456789/13748A thesis submitted to Addis Ababa University College of Business and Economics Department of Accounting and Finance Presented in partial fulfilment of the requirements for the degree of masters of science in accounting and financeThe purpose of this study is to examine the effect of bank-specific and macroeconomic determinants of commercial bank profitability in Ethiopian. The study used panel data of seven commercial banks from year 2006 to 2016. The study employed an explanatory type of research and secondary financial data were used. Fixed effect regression model was applied to investigate the impact of bank size, capital adequacy, liquidity risk, management efficiency, loan to deposit ratio, funding cost, foreign exchange rate, GDP and inflation rate on profitability. Return on assets (ROA) was used as a measure of profitability. Based on the result of hausman specification test the study used fixed effect model. The major findings of the study show that liquidity risk, loan to deposit ratio, management efficiency and inflation have statistically significant and positive relationship with banks’ profitability. Further, the results from the panel regression suggest that, funding cost and GDP have a negative and statistically significant relationship with banks’ profitability. However, the relationship for capital adequacy, bank size and foreign exchange rate is found to be statistically insignificant. The study suggests focusing and redesign the firms together with significant key internal and external drivers of profitability of commercials banks in Ethiopiaen-USCommercial BankDeterminantsExternal FactorsProfitabilityThesis