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Bank Specific and Macroeconomic Determinants of Commercial Bank Profitability

International Journal of Finance & Banking Studies

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Title Bank Specific and Macroeconomic Determinants of Commercial Bank Profitability
 
Creator Olalere, Oluwaseyi Ebenezer
Wan Bin Omar, Wan Ahmad
Kamil, Syahida
 
Description The study examines the bank-specific and macroeconomic determinants of banks profitability in Nigeria analyzing audited financial reports of selected sixteen (16) commercial banks over the period of 2010 to 2015 making up to 96 observations. The study identified that existing studies are sketchy in developing economies even though many studies have emerge in developed economies. The bank profitability is measured by return on assets and return on equity as function of bank-specific and macroeconomic determinants. Using the balanced panel data set, the empirical results of the study shows that capital adequacy and liquidity have a positive and significant effect on bank profitability. However, efficiency ratio have a negative and significant effect on bank profitability. With regards to macroeconomic variable, GDP growth also have a positive and significant impact on banks profitability. The empirical results of the study suggested that banks can improve their profitability through increasing capital and liquidity, decreasing operating cost with conscious effort to maintain transparency in their operations. In addition, a good economic environment for financial institutions foster increase in bank profitability. Hence, the study recommends that further studies can expand the scope while extending to other industries as well. 
 
Publisher SSBFNET
 
Date 2017-01-15
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.ssbfnet.com/ojs/index.php/ijfbs/article/view/35
 
Source International Journal of Finance & Banking Studies (2147-4486); Vol 6 No 1 (2017): January; 25-38
2147-4486
10.20525/ijfbs.v6i1
 
Language eng
 
Relation http://www.ssbfnet.com/ojs/index.php/ijfbs/article/view/35/38
 
Rights Copyright (c) 2017 International Journal of Finance & Banking Studies (2147-4486)
http://creativecommons.org/licenses/by-nc/4.0