Financial Information Influencing Commercial Banks Profitability

Dhiaa Shamki, Ibrahim Alulis and Karima Sayari

International Journal of Economics and Finance, 2016, vol. 8, issue 6, 166

Abstract: The paper investigates the influence of bank capital ratio, size and loans on the profitability of a commercial bank in Jordan. It also evaluates whether returns on Assets (ROA) or returns on equity (ROE) is the better indicator that reflects bank profitability. Two Multiple regression models are used to test the influence of capital ratio, size and loans of a commercial bank on its profitability indicators measured by ROA and ROE and to detect the superiority between the two indicators for 13 Jordanian commercial banks for the period 2005-2013. The results of the study showed that capital ratio, size and loans have insignificant influence on ROA, but not on ROE except bank size. Regarding ROE, significant negative and positive influence for capital ratio and loans respectively are concluded. Although the small number of commercial banks in Jordan and some variables have not been well researched in literature, the paper presents a sight to associate bank performance/profitability proxied by ROA and ROE with its capital ratios, size and loans. Our results might assist bank management to capitalize the factors that could improve banks performance and hedge against the adverse factors.

Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.ccsenet.org/journal/index.php/ijef/article/download/58417/32190 (application/pdf)
http://www.ccsenet.org/journal/index.php/ijef/article/view/58417 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijefaa:v:8:y:2016:i:6:p:166

Access Statistics for this article

More articles in International Journal of Economics and Finance from Canadian Center of Science and Education Contact information at EDIRC.
Bibliographic data for series maintained by Canadian Center of Science and Education ().