Bank specific and macroeconomic determinants of profitability of Ghanaian commercial banks: a panel data approach
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Date
2021
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KNUST
Abstract
The financial health of all banks is determined by its ability to generate adequate profit to keep it in existence. This research brings to light the pivotal role of both internal and external factors impact on the profitability of banks in Ghana. Using 8 (eight) listed Ghanaian banks covering 2009-2018, the Ordinary Least Square regression has been performed to analyze the nexus between the bank-specific and macroeconomic factors and profitability indicators. It is worth noting that this research employs three accounting-based profitability indicators namely ROA, ROE and NIM. From the performance of the Hausman specification test, the fixed effect model is the appropriate model to be used. The findings of this research reveal that asset management, operational efficiency, number of branches and inflation are the key factors that influence the profitability of Ghanaian banks. All iv other factors exhibited an insignificant influence on the profitability of Ghanaian banks, all other things being equal. Also, from the descriptive statistics, it was observed that listed banks are highly geared and that has the tendency of reducing profits.
Description
A thesis submitted to the department of accounting and finance, institute of distance learning-Kwame Nkrumah university of science and technology, in partial fulfilment of the requirements for the degree of master of science, accounting and finance