Profitability was the major determinant of banks profitability all over the world. The purpose of this study was to investigate determinants of commercial banks profitability in Ethiopia by using panel data of six (6) commercial banks from year 2010 to 2020. Prior studies a similar topic dis regarded certain determinants of profitability in Ethiopian banking industry. Hence the study filled the gap through assessing their influenced and profitability in economic banks. Accordingly capital adequacy credit risk, operating expense, tax payment, service charge and commission, other income, employment salary and benefit, interest income, non-interest income and real growth domestic product significantly influenced banks profitability in different direction. The study used multiple linear regressions models to investigate factors that determine the profitability of commercial banks. The study recommended that commercial bank in Ethiopia shall diverse their portfolio in order to maximize their level of profitability capital adequacy. To obtain information relevant to the study, secondary data was used. Besides in the study all commercial banks in Ethiopia were taken as study population and purposive sampling method was used to select sample unit. Furthermore the study suggested that banking industry in Ethiopia must be optimizing the level of service charge and commissions, credit risks. It is advisable if the banks broadly the level of implementation of digital banking system. The study to explore capital adequacy, interest income, non-interest income, bank service charge and commission were strongly and positive correlation with banking profitability in Ethiopia banking industry. However credit risk, tax payment and operating expenses have strong and negative correlation with Ethiopian commercial banks profitability. Farther researchers suggested examining the determinants of commercial banks profitability across the country.
| Published in | International Journal of Business and Economics Research (Volume 11, Issue 3) |
| DOI | 10.11648/j.ijber.20221103.14 |
| Page(s) | 123-139 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2024. Published by Science Publishing Group |
Profitability, Ordinary Least Square, Banks Specific, Macroeconomics, Commercial Banks
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APA Style
Segni Diriba Bosho. (2022). Determinants of Banks Profitability of Commercial Banks in Ethiopia Facts from Ethiopian Commercial Banks. International Journal of Business and Economics Research, 11(3), 123-139. https://doi.org/10.11648/j.ijber.20221103.14
ACS Style
Segni Diriba Bosho. Determinants of Banks Profitability of Commercial Banks in Ethiopia Facts from Ethiopian Commercial Banks. Int. J. Bus. Econ. Res. 2022, 11(3), 123-139. doi: 10.11648/j.ijber.20221103.14
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Download@article{10.11648/j.ijber.20221103.14,
author = {Segni Diriba Bosho},
title = {Determinants of Banks Profitability of Commercial Banks in Ethiopia Facts from Ethiopian Commercial Banks},
journal = {International Journal of Business and Economics Research},
volume = {11},
number = {3},
pages = {123-139},
doi = {10.11648/j.ijber.20221103.14},
url = {https://doi.org/10.11648/j.ijber.20221103.14},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20221103.14},
abstract = {Profitability was the major determinant of banks profitability all over the world. The purpose of this study was to investigate determinants of commercial banks profitability in Ethiopia by using panel data of six (6) commercial banks from year 2010 to 2020. Prior studies a similar topic dis regarded certain determinants of profitability in Ethiopian banking industry. Hence the study filled the gap through assessing their influenced and profitability in economic banks. Accordingly capital adequacy credit risk, operating expense, tax payment, service charge and commission, other income, employment salary and benefit, interest income, non-interest income and real growth domestic product significantly influenced banks profitability in different direction. The study used multiple linear regressions models to investigate factors that determine the profitability of commercial banks. The study recommended that commercial bank in Ethiopia shall diverse their portfolio in order to maximize their level of profitability capital adequacy. To obtain information relevant to the study, secondary data was used. Besides in the study all commercial banks in Ethiopia were taken as study population and purposive sampling method was used to select sample unit. Furthermore the study suggested that banking industry in Ethiopia must be optimizing the level of service charge and commissions, credit risks. It is advisable if the banks broadly the level of implementation of digital banking system. The study to explore capital adequacy, interest income, non-interest income, bank service charge and commission were strongly and positive correlation with banking profitability in Ethiopia banking industry. However credit risk, tax payment and operating expenses have strong and negative correlation with Ethiopian commercial banks profitability. Farther researchers suggested examining the determinants of commercial banks profitability across the country.},
year = {2022}
}
TY - JOUR T1 - Determinants of Banks Profitability of Commercial Banks in Ethiopia Facts from Ethiopian Commercial Banks AU - Segni Diriba Bosho Y1 - 2022/06/08 PY - 2022 N1 - https://doi.org/10.11648/j.ijber.20221103.14 DO - 10.11648/j.ijber.20221103.14 T2 - International Journal of Business and Economics Research JF - International Journal of Business and Economics Research JO - International Journal of Business and Economics Research SP - 123 EP - 139 PB - Science Publishing Group SN - 2328-756X UR - https://doi.org/10.11648/j.ijber.20221103.14 AB - Profitability was the major determinant of banks profitability all over the world. The purpose of this study was to investigate determinants of commercial banks profitability in Ethiopia by using panel data of six (6) commercial banks from year 2010 to 2020. Prior studies a similar topic dis regarded certain determinants of profitability in Ethiopian banking industry. Hence the study filled the gap through assessing their influenced and profitability in economic banks. Accordingly capital adequacy credit risk, operating expense, tax payment, service charge and commission, other income, employment salary and benefit, interest income, non-interest income and real growth domestic product significantly influenced banks profitability in different direction. The study used multiple linear regressions models to investigate factors that determine the profitability of commercial banks. The study recommended that commercial bank in Ethiopia shall diverse their portfolio in order to maximize their level of profitability capital adequacy. To obtain information relevant to the study, secondary data was used. Besides in the study all commercial banks in Ethiopia were taken as study population and purposive sampling method was used to select sample unit. Furthermore the study suggested that banking industry in Ethiopia must be optimizing the level of service charge and commissions, credit risks. It is advisable if the banks broadly the level of implementation of digital banking system. The study to explore capital adequacy, interest income, non-interest income, bank service charge and commission were strongly and positive correlation with banking profitability in Ethiopia banking industry. However credit risk, tax payment and operating expenses have strong and negative correlation with Ethiopian commercial banks profitability. Farther researchers suggested examining the determinants of commercial banks profitability across the country. VL - 11 IS - 3 ER -
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