Determinant of Bank Profitability

Determinants of Commercial Banks Profitability: An Empirical Evidence from the Commercial Banks of Ethiopia

Birhanu Tsehay Amare ID No. GSR/ 0695/03

A thesis submitted to The Department of Accounting and Finance

Presented in Partial Fulfillment of the Requirement for the Degree of Master of Business Administration in Finance

Addis Ababa University Addis Ababa, Ethiopia May, 2012

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Addis Ababa University School of Graduate Studies
This is to certify that the thesis prepared by Birhanu Tsehay, entitled: Determinants of Commercial Banks Profitability: - An Empirical evidence from the Commercial Banks of Ethiopia and submitted in Partial Fulfillment of the Requirement for master of Business Adiministration (MBA) in Finance complies with the regulation of the university and meets the accepted standards with respect to oginality and quality.

Approved by the Board of Examiners

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ABSTRACT

Determinants of Commercial Banks Profitability: -An Empirical evidence from the Commercial Banks of Ethiopia Birhanu Tsehay Amare Addis Ababa University, 2012 The main objective of this study is to examine the effect of bank-specific, industryspecific and macroeconomic determinants of Ethiopian commercial banking industry profitability from the period 2000 – 2011. By usig OLS etimation method to measure the effect of internal and external determinants on profitability interms of average return on asset and net interest margin. The estimation results show that profitability persists in some extent, implies that the indicator of the existance of relatively fairly competitive market in Ethiopian commercial banking environment, especially competition between