The Effect Of Bank Regulation On Financial Performance Of Private Commercial Banks In Ethiopia

Management Project Topics

Get the Complete Project Materials Now! ยป

This study assesses the effect of bank regulations on Financial-performance of private banks inrnEthiopia by employing regulatory variables, Bank-specific variables, and Macroeconomicrnvariables by interpreting the result among financial performance and regulation. Balanced fixedrneffect panel regression is used for the data of twelve private commercial banks found in Ethiopiarnin the sample covering the period from 2011 to 2020 for ten consecutive years. The studyrnfollows a quantitative research approach, and it is analyzed based on their audited financialrnstatement. The study utilized return on asset (ROA) as a dependent variable and sevenrnindependent variables. Those are: reserve requirement, liquidity requirement, asset quality,rnminimum capital requirement, market risk, management efficiency, and real GDP growth rate.rnThe outcome of panel data regression analysis showed that capital requirement and managementrnefficiency had a positive and statically significant effect on the financial performance of privaterncommercial banks. The private commercial banksgetbenefited by raising their paid-up capital forrnexpanding the market share, growing competitiveness, financial performance, and absorbingrnunexpected risks. Reserve requirements had a negative and statically significant effect on thernfinancial performance of private commercial banks. So the result recommended that beforernapplying the regulation, NBE should use sufficient studies and amend the requirement tornenhance private commercial banks. Liquidity position determines how well liquid to coverrnimmediate disturbance to the financial health of the bank. Asset quality is a good indicator ofrnfinancial health. So, it must be kept by the bank's practice, and NBE continue its monitoring tornfurther improve financial resilience and soundness of banks and the banking system.

Get Full Work

Report copyright infringement or plagiarism

Be the First to Share On Social



1GB data
1GB data

RELATED TOPICS

1GB data
1GB data
The Effect Of Bank Regulation On Financial Performance Of Private Commercial Banks In Ethiopia

374