{"title":"Banking sector performance evaluation in Ethiopia for the period of growth and transformation plan (GTP-II): private vs public commercial banks","authors":"Bekana Dembel Tura","doi":"10.1057/s41261-022-00209-0","DOIUrl":null,"url":null,"abstract":"<p>The main objective of this study was to evaluate and compare the financial performance of commercial banks in Ethiopia during the implementation of growth and transformation plan II. Moreover, determinants of financial performance were examined. The study was conducted using secondary data obtained from the National Bank of Ethiopia, and the official website of each commercial bank. Multiple panel regression and independent sample <i>t</i> tests were used to show the relationship and to compare the financial performance of commercial banks between the study periods. The ratio of non-interest expenses to total expense, log_net profit per employee, interest income to total income, and exchange rate were variables with a positive and significant effect on the financial performance of commercial banks, while log_total loans per branch and inflation affected negatively the financial performance measured by return on assets. Whereas, the ratio of debt to equity, log_net profit per employee, total liquid assets to total deposits, interest income to total income, and exchange rate have a positive and significant impact, while the ratio of loan loss provision to total loan, log_total loans per branch, and inflation negatively and significantly affected financial performance measured by ROE. The independent sample <i>t</i> test shows that except for the ratio of total loans to total deposits and total capital to total assets, the remaining variables did not show significant differences between state and publicly owned banks.</p>","PeriodicalId":15105,"journal":{"name":"Journal of Banking Regulation","volume":null,"pages":null},"PeriodicalIF":1.3000,"publicationDate":"2022-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Banking Regulation","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1057/s41261-022-00209-0","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
The main objective of this study was to evaluate and compare the financial performance of commercial banks in Ethiopia during the implementation of growth and transformation plan II. Moreover, determinants of financial performance were examined. The study was conducted using secondary data obtained from the National Bank of Ethiopia, and the official website of each commercial bank. Multiple panel regression and independent sample t tests were used to show the relationship and to compare the financial performance of commercial banks between the study periods. The ratio of non-interest expenses to total expense, log_net profit per employee, interest income to total income, and exchange rate were variables with a positive and significant effect on the financial performance of commercial banks, while log_total loans per branch and inflation affected negatively the financial performance measured by return on assets. Whereas, the ratio of debt to equity, log_net profit per employee, total liquid assets to total deposits, interest income to total income, and exchange rate have a positive and significant impact, while the ratio of loan loss provision to total loan, log_total loans per branch, and inflation negatively and significantly affected financial performance measured by ROE. The independent sample t test shows that except for the ratio of total loans to total deposits and total capital to total assets, the remaining variables did not show significant differences between state and publicly owned banks.
期刊介绍:
Under the guidance of its highly respected Editors and an eminent and truly international Editorial Board?Journal of Banking Regulation?has established itself as one of the leading sources of authoritative and detailed information on all aspects of law and regulation affecting banking institutions.Journal of Banking Regulation?publishes in each quarterly issue detailed briefings analyses and updates which are of direct relevance to practitioners working in the field while meeting the highest intellectual standards.Journal of Banking Regulation?publishes the latest thinking and best practice on:Basel I II and IIIModels for banking supervisionInternational accounting standardsDeposit protectionEnforcement decisions in banking regulation and supervisionCross-border competition in banking servicesCorporate governance in banksHarmonisation in banking marketsSupervising credit riskAnti-money laundering legislation and regulationsMonetary integrationRisk capital and capital adequacySystemic risk in banking operationsCross-border regulationCross-border bank insolvencyModels for banking riskEssential reading for:central bankersbanking supervisorsfinancial regulatorsbankerscompliance officersheads of risk managementpolicy makersbank associationslawyers specialising in banking lawaccountantsinternal and external bank auditorsacademics and researchers