The Effect Of Leverage On Ethiopian Private Banks Profitability

The objectiveof the study was examinethe effect of leverage on the profitability of private banksrnin Ethiopia.Data was analyzed using descriptive statistics, correlation analysis as well as panelrnregression analysis. The research useddescriptive research design methodology is contentrnanalysis of annual reports of 8 Ethiopian private banks for the period from 2012 to 2019, usingrnmultiple linear regression analysis. Secondary data on the 8 list private banks at NBE wasrncollected. The independent Variable were Debt Ratio, Debt equity ratio, degree of operationrnleverage and degree of financial leverage while the dependent variable was Return on Equityrn(ROE).In general, all measurement of leverage except asset size has positive effect on Ethiopianrnprivate banks profitability.Therefore, the study recommend that private banks should better tornconcern on increment of total loan by keeping the profitability to generate more interestrnincome from the loan.

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