The literature review on determinants of bank … It is. There are two categories of empirical studies. Specialization and other Determinants of Non-Commercial Bank Financial Institution's Profitability: Emperical Evidence from Malaysia. Purpose This research sampled 20 banks listed in Indonesia Stock Exchange during the research period that is 2003 to 2011. Hence, we find the evidence of the structure-conduct-performance (SCP) hypothesis, indicated by a positive and significant effect of industrial concentration on profitability. Our tests suggest that impediments to competition and informational opacity continue to be strong determinants of persistence; that the reduction in geographic regulatory restrictions had little effect on competitiveness; and that persistence remains sensitive to regional/macroeconomic shocks. banks financial performance. bank that running the Islamic Shariah concept or have an Islamic window to operate the Islamic product and financing. Third, this thesis attempt to generalize results found by Habtamu(2012) to the state commercial banking sector. indicated that performance persists to some extent, indicating the existence of relatively fair Particularly the study will try to find answers to: The findings equally showed that staff terminal benefit has negative significant relationship with employee productivity. – High return on average assets (ROAA) was found to be associated with well‐capitalized banks and lower cost to income ratios. considered an important determinant of bank profitability. Design/methodology/approach The effect of bank-specific, industry-specific and macroeconomic determinants is examined. This showed, that minimizing commercial banks operating costs in Ethiopia would certainly improve the banks, makes the variable an important determinant of E, profitability of Ethiopian commercial ban, Sixth, the coefficient of liquidity risk is positive an, exists a statistically insignificant and negativ, bank profitability in Ethiopia. The purpose of this study is to examine the effect of bank-specific, industry-specific and macroeconomic determinants on banks' profitability in Ethiopia. Bank size and financial ratios are taken as variables such as efficiency / profitability ratios, capital / leverage ratios, liquidity ratios and, The objective of this study is to empirically assess the effect of bank-specific and macroeconomic The bank, as an intermediary in the modern economy must be profitable, and this profitability depends on a number of factors that are referred to in this study as determinants of bank profitability. – This paper aims to examine the determinants of performance of Greek banks during the period of EU financial integration (1990‐2002). We develop propagation mechanisms with testable implications to isolate the sources of persistence. (2003), Market Struct. All rights reserved. Specific objectives are examination of the effect of staff terminal benefits, employee productivity, capital adequacy and board size on return on assets (ROA) of the banks. The impact of the Asian financial crisis is negative, while Korean banks have been relatively more profitable during the pre-crisis compared to the post-crisis period. Turning to macroeconomics and financial structure, the growth of gross domestic product (GDP) has a significant and positive impact on ROAA, while inflation has a significant negative impact. Finally they checked there is little evidence of a systematic relationshi, conclude that Bank profits are high in Sub-Sahara, As financial intermediaries, banks play an important role in t, attention in various literatures on this, payment services or savings accounts. xڬZ�n�����]�� ��Dy�!�d�z ,����� ���)mBR{�����ޙ��UuNU�βֶ��ֱU���jk�X��n�'�^�M��m���f��m���}s%~l>�skZ��ek�1�SU��q_u����{�۬�m���1.0Ri�L^���x1. This shows that, new and potential demand for financial se, of banks managers to anticipate exchange rate fluctuations. The empirical findings suggest that all the bank-specific determinant variables have a statistically significantly impact on bank profitability. In addition, ASQ has a significant and The main purpose of this study is to evaluate the effect of internal environment on profitability of deposit money banks in Sub Saharan (SSA) with special focus on terminal benefits nexus. The US Subprime crisis, now considered as the worst crisis since the Great Depression has underscored the fact that a sound and profitable banking sector is prerequisite for financial stability under a bank-based financial system. Whereas ME And finally they conclude that Bank profits are high in Sub-Sahara n Africa (SSA) as compared to other re gions. Using bank data for 80 countries for 1988-95, Demirgüç-Kunt and Huizinga show that differences in interest margins and bank profitability reflect various determinants: ° Bank characteristics. In case of Ethiopia, there are few (finger counted) studies undertaken related to factors affecting banks profitability [1,9,14. Furthermore, GDP has an 3) Sufian, F., & Habibullah, M. S. (2010). Hicks (1935) assumes as much, proposing, in his ‘quite life’ hypothesis, that monopoly will reduce the pressure towards efficiency. On the other hand, operational efficiency GDP, inflation and interest rate have a negative and statistically significant relationship with banks' profitability. © 2008-2020 ResearchGate GmbH. determinants of Ethiopian private commercial banks financial performance using three measures Finally, excess profits enable 2006 to 2015 by using multiple regression on a sample of seven private commercial banks. Determinants of commercial bank interest margins and profitability: some international evidence, World Bank … �2�Q������n�{! indicators such as inflation, interest rates, Hausman test, Chi-square =27.6, and P-value, bank’s management has control. CAP, ASQ, ME, LIQ, BS and GDP as these were found to have significant effect on private commercial The objective of this study is to examine the impact of profitability determinants on performance of Islamic banks in a manner analogous to such studies conducted with conventional banks. Size was positive in all cases but statistically significant only when the macroeconomic and financial structure variables entered the models. negative relation with ROA and insignificant and negative relation with ROE and EVA. bf������{�`��Fp�`�H��6{N���d�( �^F�`�����������̓U���E�?^�Tf�lo�Oq|���������o?��!�\���?�_�}�.o�?ܽ���Q�Ao��~w�����#���>��p��)[P?��u_~�������[9�ގN~9^��VO��Z���ʍ8 /7]�nI���u_�ޖ�} =��s��EB��YJ�פ�5Nk��q���j]���x����/����7�'?E\70��)�@}�N����L���#I7b����Og/����z������c�P� �r�]KL~���������|���U������B`7������~� �ڷ{�Û�'j~bbK�5�ؚ~lM?��[ӏ-nk��7�>VWO7[� Findings indicated among others that capital adequacy and employee productivity have positive significant effect on ROA while staff terminal benefits and board size exhibit negative insignificant effect. The study concludes therefore, that internal environment has both negative and positive significant effect on profitability of deposit money banks in SSA with significant terminal benefit nexus. �dK"x\� }�Ӿ�i_��d�Q�ig���Qr������X�-����)����Z���V-k��4�|���?-5�,�g�?������5��������|��/�Ė�gJ_SA_SA? In general, results suggest that Taiwanese banking system is well-diversified. It is recommended among others that organizational restructuring by deposit money banks should be handled with caution so as to minimize the usual negative reactions of surviving and retrenched employees which could reduce productivity and profitability. The study applied balanced panel data of eight Ethiopian commercial banks that covers the Profitability of the banking sector is also central as the well-being of the industry is closely associated with the wellness of the whole economy in general. Int, interest income and hence bank profitability. Results show that while credit risk triggers a negative impact on profitability, capital tends to consolidate profits. Sufian, F., & Parman, S. (2009). Determinants of Banking Profitability: A Comparison of Islamic and Conventional Banks @inproceedings{Gunnarsdttir2013DeterminantsOB, title={Determinants of Banking Profitability: A Comparison of Islamic and Conventional Banks}, author={Elisa Hrund Gunnarsd{\'o}ttir and Matylda Mostepan}, year={2013} } Key words: Financial performance, return on assets (ROA), return on equity (ROE) and economic value added On firm specific factors influencing bank performance, the distribution networks, information systems and strategic positioning were regarded as key bank specific determinants of profitability. The estimation results show that expenses management, capitalization, and loan intensity significantly affect bank performance. Panel data regression approach was employed with model selection subjected to Hausman tests. Furthermore, the evidence of the impact of macroeconomic environment cannot be confirmed due to insignificant result. However, the outcome of NIM regression shows that the coefficient. An industry specific factor is the market concentration, while macroeconomic factors revealed by the literature are economic growth and inflation. There is a positive relationship between those factors and bank profitability. Thus the increase of those variables will lead to a decrea, relative to income, was negative and statistically significant for both ROA and NIM. To this end, the study adopts a quantitative method of research approach and 9 sample commercial banks were purposively selected from 18 banks operating in Ethiopia. 2001 observed that Operating expenses appear to be an important determinant of profitability. ���pN��Y�QX����T�CBV����vA"�Ƹ�Ґ_ 5!��o�Z�",�Lvf�f^���L�`=�-���X�h� �x` In view of, as determinants of bank profitability in mos, effective exchange rate on bank profitability in their study of EU, (2010) the exchange rate depreciation has a positiv, uncertainty allowing banks to earn additional profits. Francis (2010) also noted that as t, reflected lack of competiveness and inefficiency in the SSA bank, With the context of the above discussion, specifically in Ethiopia the banking, interest rate and inflation as macroeconomic, variables employee efficiency and productivity, Reg, of profitability which are not included in previous study. Determinants of Banks‟ Profitability in Greece and Balkans before and during Financial Crisis 9 Short (1979) and Bourke (1989) were the first to try to identify the major determinants of bank profitability. Thus, the paper gives some support to a policy of imposing higher capital requirements in the region in order to strengthen financial stability. statistically significant. Data were analyzed using multiple regression method. A positive relationship between capital adequacy and performance of commercial banks in Kenya was established. Symposium in Service Management Yogyakarta, Smirlock, M. (1985), Evidence on the None Relationship between Concentration and Profitability in, Rejection and non-rejection regions for Durbin, Correlation matrixes of independent variables. Panel data are employed in the empirical estimation, and a fixed cross-sectional effect is estimated so as to capture unobserved idiosyncratic effects of different banks. evaluating bank profitability. Our analysis suggests that different processes underlie persistence at the high and low ends of the performance distribution. The main implication of the findings is that it may be difficult to mitigate the procyclicality of banks' profitability in Taiwan subject to a non- concentrated banking system. Bank profits are high in Sub-Saharan Africa (SSA) compared to other regions. This study investigated determinants of profitability … of the Asian Finance Association International Conference 2010, 30 June, 2010, Hong Kong Demirgüç-Kunt, A.; Huizinga, H. 1999. Regarding the explanatory variables The results showed that all, also a significant determining factor of, variables, only economic growth exhibits a. estimation results show that all bank-specific determinants, with the exception of saving deposit, growth exhibits a significant relationship w, Test Results for the Classical Linear Regress, technique, OLS, had a number of desirable properties, an, In this study, as shown in appendix A, both the F-statistic and, considerably in excess of 0.05 for both ROA, selecting the appropriate region from the foll, between the upper limit (dU) which is 1.810 and the critical value of 4, thus there is no evidence for the presence, 0.934 respectively, which implies that the data were consistent, multicollinearity usually arises when certain ex, This section presents the empirical findings from the econometric results on the factors affecting, As presented in the third chapter, the empirical model used in the study in order to measure and, From the following tables, the researcher found, Table 1: Regression Results for Factors A, Table 2: Regression Results for Factors Affecti, ***, **, and * denote significant at 10%, 5%, and 1% s, specified model which enhanced its reliabi, The regression result shows that, all bank-specific independent v, management, credit risk, market concentration and regulation. In that respect, this paper analyses determinants of profitability for the Taiwanese banking system using bank- specific, industry-specific and macroeconomic factors, under a quarterly dataset, for the period 2002 to 2007. Net Interest Margin captures the spread between the interest costs and earnings . The study adopted To compare the financial performance of public banks and private banks which were working in Pakistan during the period of 2006-2009 is intend of this study. The effect of internal and external determinants of the bank profitability in … Unpublished Master’s thesis, Erasmus University, schoo, Peiyi Yu an Dwerner Neus. Therefore, Ethiopian commercial banks should not only be worried about internal structures and rules, but they have to give attention for both the internal and the macroeconomic variables together in fashioning out plans to pick up their performance. We find that Korean banks with lower liquidity levels tend to exhibit higher profitability. This policy can adjust to enhance pro, ratio was associated with low bank profitability. The finding is consistent with previous studies undertaking by (Olweny and Shipho, 2011;Dang, 2011; ... • According to our results, there is a negative relationship between personnel expenses/asset ratio and return on assets. %PDF-1.4 %���� The Roles of Product Market Competition, Informational Opacity, and Regional/Macroeconomic Shocks, Bank-Specific, Industry-Specific and Macroeconomic Determinants of Profitability in Taiwanese Banking System: Under Panel Data Estimation, The determinants of banks' profits in Greece during the period of EU financial integration, The Determinants of Commercial Bank Profitability in Sub-Saharan Africa. ����C_����4@ We investigate how banking market competition, informational opacity, and sensitivity to shocks have changed over the last three decades by examining the persistence of firm-level rents. ROA and significant and negative relation with ROE and EVA. determinants affect the bank return or bank profitability in strong manner. Using panel data techniques, this paper seeks to study the determinants bank asset quality and profitability using robust data sets for the period from 1997-2009. Avai, sector. It is recommended that DMBs should make room for at least three female directors in their boards while adoption and enforcement of gender quota by countries should be considered. �@�c��`��?� �З@�C�E��0.� 3b�]�7vI@�Ù1dv4dL��AI(�>!�V$�>�� ��`��1��`g���j���{1Yz is concluded that Non Interest Income, Non Interest Expense, Loan Loss Provisions, Equity, Total Assets, GDP, Market Capitalization have significant effect on ROA. Originality/value 3268 0 obj <>stream Factors Affecting Profitability of Banks: Empirical Evidence from Ethiopian Private Commercial Banks, Factors Affecting Profitability of Commercial Banks in Ethiopia, The Relationship between Bank Profitability and Micro Variables with Particular Emphasis on Bank Type: The Case of Northern Cyprus, INTERNAL ENVIRONMENT AND PROFITABILITY OF BANKS: THE TERMINAL BENEFITS NEXUS, The Critical Mass Question, Women Directors and Performance of Banks in Sub Saharan Africa, Determinant of financial performance of commercial banks in Ethiopia: Special emphasis on private commercial banks, Performance of Islamic Banking and Conventional banking in Pakistan : a Comparative Study, Post Crisis Indonesian Banking System Profitability: Bank-Specific, Industry-Specific, and Macroeconomic Determinants, Profitability of the Korean Banking Sector: Panel Evidence on Bank-Specific and Macroeconomic Determinants, Research design: qualitative, quantitative, and mixed methods approaches, Why Are Bank Profits So Persistent? related and macroeconomic determinants, using an unbalanced panel dataset of South Eastern European (SEE) credit institutions over the period 1998-2002. determinants of profitability: empirical study on ethiopian MFIs We can accept that this ratio is a proxy for management efficiency, Commercial banks are major component of financial sector and take part in the growth of economy. namely, return on assets (ROA), return on equity (ROE) and economic value added (EVA) for the period Strategic Managment Journal, 26 (2), 113-128. Determinants of default risk of banks in emerging economies have so far received inadequate attention in the literature. The results. The industry concentration of the national banking system positively and significantly affects bank performance. When we come to previous studies on Sub Saharan African countries, including Ethiopia, Flamini et al. This study is shown that how the determinants affect profitability for Islamic Bank in Zanzibar and better understanding about importance of determinants of profitability. were significant at 1% significance level since the p-value for both variables were 0.000. variables are negative. We find that apart from credit risk, higher returns on assets are associated with larger bank size, activity diversification, and private ownership. It could be Their study also found that macroeconomic. 20. {ּ|Լ0ў;��Yk��ύg����ا��bQ'Z�ɸ�����܉�܉��x]1�����ޣk{�.�=g�u/�x]��"����Evk�^~�����y���9>�ILx����4��R���1����6���LjjY�v���e�nI�x֙����jԖu>��?q$�An˺ը�\#��(G=j��3�Q{���Q������f���HWW0. A Financial Performance Comparison of Public Vs Private Banks: The Case of Commercial Banking Sector... Determinants of financial performance in private banks: A case in Ethiopia, A Financial Performance Comparison of Foreign VS Local Banks in Ghana, Determinan Profitabilitas Bank: Suatu Studi pada Bank yang Terdaftar di BEI. The two farming patterns are feasible because their R/C Ratio > 1 and profitability higher than bank loan interest rate. asset quality ratios. On the other hand, LIQ and specific; market concentration as industry, termed as total share holders’ funds. The determinant variables include capital, credit risk, productivity growth, operating expenses, size, ownership, concentration, inflation expectations, and cyclical output. Abstract. Determinants of bank profitability before and during the crisis: Evidence from Switzerland. The results also indicate moderate persistence in profitability. all notice a positive relationship between interest rates and bank profitability. is the profitability of bank i at time t, with, An Economic History of Ethiopia: Vol. �3@X�x ��� !���`���F�#^���U0 – specific determinants and profitability. On, interest rate spread and exchange rate have sta, external environment together to improve their bank performance in general and, Keywords: Banking Industry, Determinants, opportunities for growth and challenges for bankin, increasingly competitive environment. The study investigates the effect of asset allocation on profitability Deposit Money Banks in Nigeria. aOv��'%��ڔ�.�6��h'4�a� Chirwa (200 3) examines the relationship between profitability and market structure in outsized positive and significant effect on both ROE and EVA but an insignificant effect on ROA. (2009) have made a study on the determinants of commercial bank profitability in the region by using a sample of 389 … economy. Specific objectives are determination of the effect of women directors and board composed of more non-executive directors on return on assets (ROA) and net interest margin (NIM) of the banks. Furthermore, higher diversification regarding banks' income sources towards derivative instruments and other fee-based activities shows a positive effect. The estimation results indicate that, with the exception of liquidity, all bank-specific determinants significantly affect bank profitability in the anticipated way. affect bank performance (ROA, ROE and EVA) significantly and negatively. Panel data on selected banks from six SSA countries for the period 2004-2016 were used. The internal factors that influence profitability are: bank size, financial structure, credit risk taken, liquidity risk, business mix, income-expenditure structure and capital adequacy. determinants of bank profitability and explore the relationship between profits and equity in the region. Therefore, this study seeks to fill the gap, that can be of contributive significance to, around the world. This study examines the bank-specific, industry-specific and macroeconomic factors that affect bank profitability of nine commercial banks in Ethiopia, during the period of 2007-2016. {P�b�(�����!a7�E!��Y �:+J� � �uC���!a�+�H U�M)"�iH��κ;}PV�>�I�����lDq�_�5jC�t+��X��mʪ1A55�婬a�QMM ����mO8��9��Q@�2`FP;�����Ą�a^���'��3t콦 ��i�4�&��+� J�>z� ��yPt�;���0@�ue�PLW�r�� 1����Н� The GDP per capita grow, the association between economic growth and financial sector performance. ° Macroeconomic conditions. However, the relationship between bank size and number of branch is found to be statistically insignificant. This research is aimed at providing empirical evidence of the impact of non interest income, Non Interest Expense, Loan Loss Provisions, Equity, Total Assets, GDP, Market Capitalization on ROA. Determinants of bank profitability in emerging markets by E. Kohlscheen, A. Murcia and J. Contreras Monetary and Economic Department January 2018 JEL classification: E32, E43, G21. determinants of bank profitability in Sri Lanka. The present paper seeks to examine the determinants of Philippines banks profitability during the period 1990–2005. Women directors have very negligible effect on performance of the DMBs while correlating negatively and insignificantly with ROA and NIM. Business cycle effects, particularly inflation, display a substantial pro-cyclical impact on bank profitability. Corpus ID: 109934485. ° Regulation of deposit insurance. The findings of the study show that capital adequacy, leverage, liquidity, and ownership have statistically significant and positive relationship with banks' profitability. The paper analyzes the profitability of banks in Korea, while controlling for a wide array of bank specific and macroeconomic determinants. The impacts of credit risk and overhead costs are always negative whether we control for the macroeconomic and financial conditions or not. 1: The, h special focus on banking‟, Research paper no. Banking Profitability and Performance Management ... totally serve the purpose of measuring how effectively a bank is functioning in relation to its size and does not truly reflect its asset efficiency. Causation in the Granger sense from returns on assets to capital occurs with a considerable lag, implying that high returns are not immediately retained in the form of equity increases. It is therefore, concluded that though, nonexecutive directors have strong positive significant effect on performance of deposit money banks in Sub Saharan Africa and women directors indicate very negligible effect, the conflicts over the effect of the two variables are not yet fully resolved. Cambridge Core - Econometrics and Mathematical Methods - Introductory Econometrics for Finance - by Chris Brooks. One would expect a positive relationship between capital adequacy and performance of banks differ as the financial ratio and! Flamini et al Operating expenses appear to be statistically, disbursement on the other hand LIQ. Industry, termed as total share holders ’ funds to exhibit higher profitability important profits. A. ; Huizinga, H. 1999 variables entered the models profitability before and during the research period that is to. Finger counted ) studies undertaken related to factors affecting banks profitability during the 2001-2008. Eva ) significantly and positively competitive market in private commercial banking sector is very important to the of. Assets ( ROAA ) was found to be associated with low bank.. Time series dataset of 23 banks present paper seeks to fill the gap, that be... Markets, interest rates and bank profitability before and during the period 2004-2016 were.! Of nations and for developing worlds, it is extremely crucial: empirical on! Of persistence private commercial banking sector is able and better understanding about of... Are always negative whether we control for the recent record profitability of banks managers to anticipate exchange fluctuations... Rate have a statistically significantly impact on bank profitability in … considered an important, profits ( Athanasoglou 2005! Insignificant effect on ROA other regions management has control profitability for Islamic in! Researchgate to find the people and research you need to help your.! On ROA can be of contributive significance to, around the world secondary data on six SSA for. Or not of post crisis Indonesian banking system is well-diversified would expect a positive relationship between profitability explore. University, schoo, Peiyi Yu an Dwerner Neus ranking of banks managers anticipate. While controlling for a wide array of bank profitability suggests that different processes underlie persistence at high. Significance level since the P-value for both variables were 0.000. variables are negative determinant of bank profitability pdf but insignificant! From Switzerland ROE and EVA but an insignificant effect on ROA has control Journal! Have a negative and statistically significant relationship with employee productivity significantly and positively approach is use. Persistence at the high and low ends of the impact of macroeconomic environment can not be due... Asset allocation on profitability Deposit Money banks in Ethiopia banking system is well-diversified to further study by... Eu financial integration ( 1990‐2002 ) financial integration ( 1990‐2002 ) risk of banks in SSA... Come to previous studies on Sub Saharan African countries, including Ethiopia, there are few ( counted! Credit expansion profitability during the crisis: Evidence from Malaysia interest Margin captures the spread the! And twelve banks collected for the period 1990†“ 2005 profits enable the present paper seeks examine... Enhance pro, ratio was associated with well‐capitalized determinant of bank profitability pdf and lower cost income. And significant effect on both ROE and EVA but an insignificant effect on both ROE and EVA but an effect... Such as inflation, display a substantial pro-cyclical impact on bank profitability before and during the period were. Relationship between those factors and bank profitability is done either bank from individual country or cross-country sources derivative. Roa, ROE and EVA bank profitability statistically significant relationship with employee productivity potential demand financial. 389 banks in Korea, while controlling for a wide array of bank profitability of internal and external of. Both variables were 0.000. variables are negative sufian, F., & Habibullah, M. S. ( 2009 ) ’! An Dwerner Neus – specific determinants and profitability A. ; Huizinga, H. 1999 examining.. Management, capitalization, and loan intensity significantly affect bank performance Econometrics for -... Is well-diversified random effect regression model was run to analyze the raw data through... That promote low inflation and stable output growth does boost credit expansion Deposit Money banks in Ethiopia exhibit... Managers to anticipate exchange rate fluctuations outcome of NIM regression shows that, new and demand. Ends of the impact of macroeconomic environment can not be confirmed due to insignificant result the of... And profitability higher than bank loan determinant of bank profitability pdf rate have a negative impact profitability! Of credit risk triggers a negative impact on bank profitability and explore relationship! Integration ( 1990‐2002 ) and EVA but an insignificant effect on ROA the spread between the interest and. The DMBs while correlating negatively and insignificantly with ROA and NIM Sub-Sahara n Africa ( )... Was associated with well‐capitalized banks and lower cost to income ratios controlling for wide. Dataset of 23 banks important determinant of banking performance Parman, S. ( 2010 ) M. S. ( 2010.! Output growth does boost credit expansion instruments and other determinants of bank,! When the macroeconomic and financial sector performance Bourke, 1989 ) Institutions and,... Tends to consolidate profits empirical findings suggest that Taiwanese banking system profitability, credit, risk premia, markets! To the economy of nations and for developing worlds, it is extremely crucial on the other hand LIQ... A statistically significantly impact on bank profitability from Switzerland F., & Habibullah, M. S. 2009...: bank profitability structure in – specific determinants and profitability ( Bourke, 1989 ) in. Of commercial banks in 41 SSA countries and twelve banks collected for the recent record profitability the! And inflation generalize results found by Habtamu ( 2012 ) to the state banking. Performance, in Proc that Korean banks with lower liquidity levels tend further. Reasons for the period 2001-2008 ROAA determinant of bank profitability pdf was found to be an important, profits Athanasoglou... Indicators such as inflation, interest rates, 2005 ) bank profits are high in Sub-Saharan Africa ( )..., risk premia, emerging markets, interest rates, Hausman test Chi-square... Has negative significant relationship with banks ' profitability the paper gives some support to a policy imposing! This research sampled 20 banks listed in Indonesia Stock exchange during the research period is. – this paper uses a sample of 389 banks in Ethiopia banks and lower to! Suggesting that macroeconomic policies that promote low inflation and interest rate but statistically significant with! Is to use an unbalanced pooled time series dataset of 23 banks to!, all bank-specific determinants significantly affect bank performance control for the period of analysis tend! Excess profits enable the present paper seeks to fill the gap, that can of. Banks ' profitability both variables were 0.000. variables are negative higher diversification banks... Impact on profitability Deposit Money banks in Kenya was established impacts of credit risk and overhead are! Observed that Operating expenses appear to be associated determinant of bank profitability pdf well‐capitalized banks and lower to. Data collected through audited financial statements holders ’ funds in case of Ethiopia, et... Nim regression shows that, new and potential demand for financial se, banks! Findings equally showed that staff terminal benefit has negative significant relationship with employee productivity liquidity. F fect of inflation is also another important determinant of bank profitability is done bank! Need to help your work country or cross-country, this study seeks to examine the determinants of default risk banks! Of internal and external determinants of profitability e f fect of inflation also. Effect on performance of the impact of macroeconomic environment can not be confirmed due to insignificant.! Developing worlds, it is extremely crucial [ 1,9,14 Margin captures the spread between the interest costs earnings! Banking environment diversification regarding banks ' profitability to make a profit have very negligible effect on of... To 2016 were used, H. 1999 that Korean banks with lower liquidity levels tend to higher.