Browsing by Author "MULUGETA MESFIN MELESE"

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    DETERMINANTS OF FINANCIAL PERFORMANCES OF PRIVATE BANKING IN ETHIOPIA: EMPHASIS AT ALL PRIVATE COMMERCIAL BANKS
    (WOLKITE UNIVERSITY, 2018-10) MULUGETA MESFIN MELESE
    The main purpose of this study was to assess the determinants of Performances of Private Commercial Banks in Ethiopia. In order to meet the objectives of the study, a descriptive and relational research design method was employed. The target population of the study comprised all Private Commercial Banks in Ethiopia that were selected through census sampling method. Whereas, the study period 2010 2016 was purposively selected. Financial statements, during the study period, of private banks were obtained from NBE. These financial statements were then used to generate panel data, which comprises all the financial ratios regarding the dependent variables and bank specific independent variables. Accordingly 101 sample cases of bank specific financial ratios are obtained. Macro economic data for the study period were also collected from NBE and CSA publications. Descriptive analyses of financial ratios were generated to reflect average and relative performance of individual private banks. The overall average financial performances of private banks were 2.61% and 17.96% for ROA and ROE, respectively. Regarding the internal financial ratios, almost all the private banks adhered to the threshold ratios set by the NBE. However, these banks have considerable differences in their internal ratios, where banks in good position regarding one ratio are found to have lower position in another. Mainly, correlation and regression analyses employed in the research revealed profitability of banks were mainly related and influenced by their internal specific bank ratios; whereas the external and macro variables were not found to have significant effect in their performance. Both ROA and ROE had significant negative correlations with CA and ME; while positively related with AQ and BSize. However, the relationships were more stronger for ROE than ROA. Mainly Management efficiency and capital adequacy were the most explanatory to ROA of the banks; together they explained 69% of the variation on the banks return on asset. While, these two ratios together with liquidity and asset quality aredeterminants to the banks ROE; they have about 75% explanation power. It is therefore, clear that the bank specific ratios have considerably strong influence on profitability of private commercial banks. Therefore, it is recommended that in order to assess the banks performance with regard to ROA and ROE, it is worth advisable to optimally adjust the CAMEL ratios, while mainly pay regards to the management efficiency and capital adequacy ratios.