The main purpose of this paper is to investigate the effect of bank specific factors which can affectrnthe financial performance of private commercial banks in Ethiopia. A total of 16 privaterncommercial banks (those having well organized financial data till 2009) were purposefully taken &rntheir audited annual financial reports were analyzed for the period of 2009-2018. For thisrnpurpose, explanatory research design, Pearson Correlation Coefficient and Multiple LinearrnRegression Analytical approaches were applied. In this study, return on asset taken as therndependent variables and bank specific factors liquidity management, asset quality, managementrnefficiency, earning quality and capital adequacy as independent variables were used. Anyrnautocorrelation problem was checked. The results indicated that capital adequacy, managementrnefficiency and earning quality have positive and statistically significant effect on financialrnperformance of private commercial banks of Ethiopia measured by ROA. But, liquidityrnmanagement has negatively significant impact on financial performance of the banks (ROA).rnFinally, the study also depicted that asset quality is statistically significant determinant of soundrnfinancial performance of private commercial banks in Ethiopia. Therefore, due attention should berngiven in ensuring adequate capital, optimum liquidity, efficient expense management system andrnadequate earning quality by commercial banks for better performance and profitability in theirrnown area of business.