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This paper investigates the determinant variables serving as macroeconomic and microeconomic indicators of commercial banks' profitability in Jordan for the period 2002-2014. Three models are utilised. The first analyses cross-sectional data using ROA as the independent variable and ROE, CIRT, TD/TA and size of banks as regressors in the analysis....
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Citations
... This finding is consistent with [10,13,23,24,28]. In contrast, inconsistent with [4, [25][26][27]30]. ...
The research aims to look into the factors that influence Jordanian commercial banks profitability.
A sample of 13 commercial banks out of 16 listed on the Amman Stock Exchange for 2011–2020 was selected to achieve this goal.
The study variables were analysed using the E-Views software for descriptive analysis, correlation analysis, and simple and multiple linear regression analyses.
The study shows that when the independent factors had integrated, they impacted the dependents factor, reflecting on Return on Assets. The net credit interest to net credit facilities ratio positively affects, in contrast, the net interest and commissions income to total income ratio, the provision for credit facilities and interest in suspense to net credit facilities ratio, the bank size negatively affect the profitability measured by return on assets in Jordanian commercial banks.
... They found that there is no significant impact International Journal of Accounting and Financial Reporting ISSN 2162-3082 2017 of the credit-deposit ratio on Return on Assets and Return on Equity. Alalaya and Al Khattab (2015) empirically investigated the determinants affecting the profitability of banks and found a negative influence of ROA and GDP on profitability whereas positive influence of ROE and TD/TA on profitability of commercial banks has been noticed. Capraru and Ihnatov (2015) examined the negative impact of bank size, credit risk, market concentration and cost to income ratio on the profitability of banks. ...
The aim of present study is to empirically examine the impact of bank-specific determinants on the profitability of Indian public sector banks. A balanced panel data set comprising 280 observations of 28 Indian public sector banks over the period of ten years from 2006-07 to 2015-16 is used. The relevant financial data are collected from the Capitaline database. Net profit to Total funds is used as proxy for profitability of banks. A fixed effect regression model is built by devising statistical software STATA. The empirical results demonstrate non-uniform effects of selected financial characteristics on banks’ profitability. The results also reveal that deposit ratios are the significant determinants of banks’ profitability while Other Income to Total Income and Interest Income to Total Funds results a significant negative influence on bank performance. The results provide valuable insights to the banks that may assist in sustaining the financial stability in banking sector.
... They found that there is no significant impact International Journal of Accounting and Financial Reporting ISSN 2162-3082 2017 of the credit-deposit ratio on Return on Assets and Return on Equity. Alalaya and Al Khattab (2015) empirically investigated the determinants affecting the profitability of banks and found a negative influence of ROA and GDP on profitability whereas positive influence of ROE and TD/TA on profitability of commercial banks has been noticed. Capraru and Ihnatov (2015) examined the negative impact of bank size, credit risk, market concentration and cost to income ratio on the profitability of banks. ...
The aim of present study is to empirically examine the impact of bank-specific determinants on the profitability of Indian public sector banks. A balanced panel data set comprising 280 observations of 28 Indian public sector banks over the period of ten years from 2006-07 to 2015-16 is used. The relevant financial data are collected from the Capitaline database. Net profit to Total funds is used as proxy for profitability of banks. A fixed effect regression model is built by devising statistical software STATA. The empirical results demonstrate non-uniform effects of selected financial characteristics on banks’ profitability. The results also reveal that deposit ratios are the significant determinants of banks’ profitability while Other Income to Total Income and Interest Income to Total Funds results a significant negative influence on bank performance. The results provide valuable insights to the banks that may assist in sustaining the financial stability in banking sector.
... Their results also suggest that greater economic integration through increased trade and capital flows coincides with an increase in bank profitability. Alalaya and Al Khattab (2015) concluded that Assets logarithm of banks had a significant negative relationship with ROA, whereas ROE had a positive and significant relationship, TD/TA had a positive effect, GDP had a negative impact, GDP and per capita inflation rate were found to be negatively signed. Căpraru and Ihnatov (2015) found that banks' profitability is negatively influenced by the cost to income ratio, banks' size, and credit risk and market concentration. ...
This paper seeks at investigating the critical determinants that affected the profitability of the commercial banks in Jordan by applying a balanced panel data set of these banks. So that it seeks to identify the significant bank-specific variables, by comprising 130 observations of thirteen banks over the years (2005-2014). A measurement of banks' profitability is the return on assets (ROA) and the return on equity (ROE). The results indicate that the variables of capital adequacy, capital and leverage positively effect on the banks' profitability, and the variable of assets quality negatively effects on the banks' profitability. Results also indicate that rising bank's profitability in Jordan is associated with well-capitalized banks, accompanied by high capital adequacy.
The research examines an approach to forecast return on equity using leading economic indicators for short periods in banks. ROE is one of the most important ratios for performance measurement. Its adequacy is necessary for competitiveness, attract funding in financial markets, accumulate reserve for future turbulences, secure compliance with supervisory requirements and maintain positive signals for the market. There is still a debate in the literature on factors of commercial banks’ profitability forecasting, techniques, and most appropriate models to improve the correctness of predicting and acquiring more accurate signals for communication on targets. The problems are still relevant from both a theoretical perspective and practical implementation. This research aims to prove the necessity to include leading economic indicators for short term ROE forecasting. It conducts investigations for the relevant studies, using regression analysis, necessary tests, ascertains opportunities and limitations of using these indicators and develops a conceptual model and its assessment major Baltic banks. The results show verification of approach to forecast ROE using leading economic indicators for short periods. Such study complements signalling theory with a new approach, how to predict and acquire signal not only using economic indicators as a general group but sub-group them into coinciding, lagging and leading.
