Determinants Of Profitability Of Primary Peer Group Of Private Commercial Banks In Ethiopia

Abstract

The purpose of this study is to investigate the determinants of profitability of primary peer group of private commercial banks in Ethiopia. This study adopted an explanatory approach by using panel data research design from the year 2005 to2014. Purposive sampling method was used to apply for primary peer group private commercial banks in Ethiopia. Quantitative Secondary financial data collection are analyzed by using multiple linear regressions models for the bank profitability measure i.e.; returns on Asset (ROA).The explanatory variables i.e. capital adequacy, management efficiency, liquidity, asset quality, income diversification, bank size, deposit fund, employees efficiency and productivity, real GDP growth rate, inflation and market concentration has been used to determine the profitability of primary peer group private commercial banks. The findings of the empirical study showed that managerial efficiency, bank size, deposit fund, employees’ efficiency and productivity, real GDP and market concentration have significant effect on the determinants of profitability