Factors Causing Profit Fluctuation In Ethiopian Private Banks.

This paper examines internal and external factors that cause profit fluctuation in EthiopianrnPrivate Banks. Six private commercial banks were the subject for the study ranging from 2006 –rn2015. The bank's financial statement, National Bank of Ethiopia and Ministry of finance andrnEconomic Cooperation has been the main source of data for the study and the panel analysis hasrnbeen carried out to obtain the result for this empirical study. Also the research used primaryrndata (questioners). The samples are select using non probability/purposive sampling on the basisrnthat the sample banks are representative of the specific problem. The study begins with Hausmanrntest (Random Effect Model versus Fixed Effect Model) to determine the most suitable model to bernused in this study. The empirical result shows that Banks Branch Expansion, Expensernmanagement and Asset quality have negatively affect profit and are the major contributor inrnprofit fluctuation. The results suggest that Ethiopian private commercial banks could improve theirrnexpense management by formulating policies around these factors and banks have to pay attention to thernProvision for Loan Losses. The findings also showed an insignificant relationship among inflationrnrate and Ethiopian private commercial banks profit fluctuationrnKey words:- Profit fluctuation, Private commercial Banks.

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