Determinants of bank profitability in the literature, bank profitability, typically measured by the return on assets (roa) and/or the return on equity (roe), is usually expressed as a function of internal and case of selected ethiopian private banks and 1. Sufian & kamarudin: bank-specific and macroeconomic determinants of profitability 3 profitability could be influenced by the internal and external determinants (sufian and chong 2008, athanasoglou, brissimis and delis 2008. Banking institution is unquestionably associated to its profitability, thus, the most important need of any bank’s management and leadership is to make profits on a continuous basis since this will guarantee bank’s continuous existence.
Abstract using an unbalanced bank level panel data, this study tries to examine how bank-specific characteristics and macroeconomic factors affect the profitability of commercial banks (108 commercial banks) in india in the post reform period from 1999 to 2011. Over investigation of the determinants of profitability of commercial banks from both sides, from the researchers as well as specialists from the banking industry. Examines various determinants of bank profitability across various regions of the world however it is found that the numbers of financial indicators in those studies are relatively fewer in comparison to the present study.
Bank capital level is another important determinant of bank profitability the well-capitalised banks should attract deposits at lower cost thereby increasing their profitability. Looked into the determinants of profitability for the bangladeshi banking sector in the past, lion’s share of them was carried out during a high-interest rate regime when md saimum hossain is a lecturer in the department of finance, fbs, university of dhaka. Bank profits are high in sub-saharan africa (ssa) compared to other regions this paper uses a sample of 389 banks in 41 ssa countries to study the determinants of bank profitability we find that apart from credit risk, higher returns on assets are associated with larger bank size, activity. The aim of the study was to identify determinants of banking profitability and to determine the extent to which these determinants impact on the profitability first and foremost, therefore, a suitable measure of banking profits was required from the literature, 3.
The determinants of bank profitability in 665 banks in six european countries over the period between 1992 and 1998 by performing gmm method they found that there is a positive. Determinants of bank profitability in ghana samuel kwaku obeng in ghana, as in most countries, regulation rather than competition has defined the structure and range of financial products and services a bank can offer, the types of assets and liabilities it can hold and issue as different kinds of banking institutions licensed to serve a. Published: thu, 15 mar 2018 the studies on the determinant of bank’s profitability has been done since a long time ago compared to the studies on the determinants of conventional bank’s profitability, the studies on determinant of islamic bank’s profitability is still relatively new. A large portfolio of loans, bank profitability should increase with ahigher ratio of loans to assets as long as interest rates on loans are liberalized and the bank appliesmark - up pricing (garcía-herrero et al, 2009. Abstract the aim of this study is to examine the profitability behaviour of bank-specific, industry-related and macroeconomic determinants, using an unbalanced panel dataset of south eastern european (see) credit institutions over the period 1998-2002.
Specific, industry-specific and macroeconomic determinants on bank profitability the group of the bank-specific determinants of profitability involves operating efficiency and financial risk size is also included to account for the effect of economies of scale the second group of determinants describes industry-structure factors that. Capital strength, interest rate, debt ratio, and type of the bank are the main determinants of commercial banks profitability measured by roe the study found that roa as a proxy of profitability is inferior to roe. This research analyzes the determinants of bank profitability by investigating the internal factors that affect the profitability of islamic banks and conventional banks.
The results provide interesting insights into the characteristics and practices of profitable banks in europe few econometric studies have empirically explored the determinants of bank profitability in europe so far, even though similar studies have been conducted in several developed countries. Using a panel data set comprising 1255 observations of 154 banks over the 1980-2006 period and macroeconomic indices over the same period, regression results reveal that real interest rates, inflation, monetary policy, and exchange rate regime are significant macroeconomic determinants of bank profitability in nigeria. Bank profitability mostly measured by return on average asset and return on average equity, and by using this profitability measure this study is trying to illustrate the relationship between profitability and its determinants. Abdullah, parvez & ayreen 84 sufian (2011) investigated the profitability of banks in korea using a wide range of bank specific and macroeconomic determinants.
We analyse key determinants of bank profitability based on the evolution of balance sheets of 534 banks from 19 emerging market economies we find that higher long-term interest rates tend to boost profitability, while higher short-term rates reduce profits by raising funding costs. Belgrade, june 16, 2016 391 determinants of profitability (roa) in albanian banking system arjeta hallunovi, phd candidate 178 kristaq kume, prof dr 179 abstract: banks are the most crucial financial intermediaries in the economy and the economies that have profitable banking industry are better able to withstand negative shock. Significant determinant of bank profitability the result should be that bank managers focus greater on adjusting internal factors while adapting to external factors. Determinants of local commercial bank’s profitability: evidence from malaysia by chen mei kei elaine wong ee teng lee sau yin tan hui shi a research project submitted in partial fulfillment of the.
Literature regardin g the determinants of banking profitability is given in section 2 section 3 presents the data and methodology to be applied while section 4 contains the empirical results. In the literature, bank profitability, typically measured by the return on assets (roa) and/or the return on equity (roe), is usually expressed as a function of internal and external determinants. In this study we assess the main determinants of banks’ profitability in eu27 over the period 2004-2011 we split the factors that influence bank profitability in two large groups: bank-specific (internal) factors and industry specific and macroeconomic (external) factors.