Analysis of Determinants of Profitability of Commercial Banks in Botswana

Mbekomize, Christian John; Mapharing, Mogotsinyana

doi:10.6007/ijarafms/v7-i2/2878

Cited by 11 publications

(9 citation statements)

References 10 publications

(39 reference statements)

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“…The findings corroborated with those of Gatete (2015) who established a significant positive influence of bank size on the performance of quoted kenyan commercial banks. The findings however dissented those of Mbekomize and Mapharing (2017) who established an insignificant positive influence of bank size on performance with NIM and ROA being adopted as measures of performance. The latter found the relationship between the two variables to be insignificant meaning that other variables other than bank size influence the performance of listed commercial banks.…”

Section: Regression Analysiscontrasting

confidence: 63%

“…Mbekomize and Mapharing (2017) conducted an analysis on the determinants of profitability of commercial banks in Botswana. Secondary data was obtained from Bank of Botswana reports with the independent variables consisting of bank liquidity, capital adequacy, credit risk, market opportunity, cost efficiency, market diversification, economic growth, inflation and bank interest.…”

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confidence: 99%

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Effect of Firm Characteristics on Financial Performance of Listed Commercial Banks in Kenya

Nyabaga

Matanda

2020

IJEFI

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A country's economy relies majorly on the banking sector. This study examined the effect of firm characteristics on financial performance with a focus on listed banks in the Nairobi Securities Exchange for the period from 2010 to 2018. The bank characteristics examined were: Capital adequacy, leverage, asset quality and bank size. The collected data was analyzed using STATA 11 and this was basically descriptive, correlation and regression analysis. The findings depicted a significant positive effect of capital adequacy on both returns on equity (ROE) and returns on assets (ROA). The findings further indicated a significant negative effect of asset quality on ROE but an insignificant negative effect on ROA. On leverage, the findings indicated a significant positive effect on ROE and an insignificant positive effect on ROA. The findings of this study indicated that bank size has a significant positive effect on both ROE and ROA. This study concluded that capital adequacy and bank size have a significant positive effect on performance. There were mixed findings on the effect of asset quality and leverage on performance. The study recommended that, listed commercial banks should maintain a considerable capital adequacy to be able to effectively absorb losses emanating from economic shocks.

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Section: Regression Analysiscontrasting

confidence: 63%

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confidence: 99%

Effect of Firm Characteristics on Financial Performance of Listed Commercial Banks in Kenya

Nyabaga

Matanda

2020

IJEFI

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“…Similarly, the positive and significant beta coefficient for capital adequacy ratio with stability indicates the capital adequacy ratio has a positive impact on bank stability and it is consistent with the findings of Jahan (2020) and Olarewaju and Akande (2016). Further, it is observed that the beta coefficients for return on assets are positive and significant with stability and that indicates the return on assets has a positive impact on bank stability which is similar to the findings of Mbekomize and Mapharing (2017). However, the negative and significant beta for the cost to income ratio with bank stability reveals that the cost to income ratio hurts bank stability and the same result was found in the study of Muriithi and Muigai (2017) and Almumani (2013).…”

Section: Regression Analysissupporting

confidence: 77%

Efficiency, Profitability and Stability of Nepalese Commercial Banks

Adhikari

2021

The Batuk

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Efficiency, profitability and stability become an area of emergent concern in the literature and the practice. This paper attempts to examine the efficiency, profitability and stability of the Nepalese commercial banks and shows the importance of banking activities rather than simply profit achieved. Descriptive and causal-comparative research designs are used and data are collected from the financial reports of respective banks and NRB reports during the period of 2011/12 to 2019/20 of 27 commercial banks with 243 observations. Descriptive statistics have been used to present quantitative data in a manageable form and the relationship between dependent and independent variables are examined using correlation, simple and multiple regression analysis. It is found a negative and significant relationship between bank efficiency and profitability; a positive and significant relationship between bank efficiency and stability. Perhaps, this paper may be the first attempt to examine the determinants of efficiency, profitability and stability of Nepalese commercial banks. It is expected this study will bring new insight into the banking field and would provide a framework and guidelines for future study in Nepalese financial sectors.

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“…In contrast, a negative and significant relationship was obtained between liquidity (among other variables) with bank profitability in Botswana for a period from 2004 to 2013, using ordinary least square technique (Seemule, Sinha and Ndlovu, 2017). Other studies in Botswana context which assessed the impact of liquidity (among other independent variables) on bank performance and yielded conflicting results include, among others: (Sathyamoorthi, Mapharing, Mphoeng, & Dzimiri, 2019;Mbekomize & Mapharing, 2017;Ndlovu, 2015;Amusa & Kayawe, 2003).…”

Section: Background Informationmentioning

confidence: 99%

Liquidity Management and Financial Performance: Evidence From Commercial Banks in Botswana

Sathyamoorthi¹,

Mapharing²,

Dzimiri³

2020

IJFR

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The study examined the impact of liquidity management on the financial performance of commercial banks in Botswana. The study used Return on Assets and Return on Equity to measure financial performance. Cash and cash equivalents to total assets ratio, Cash to deposits ratio, Loans to deposits ratio, Loans to total assets ratio, Liquid assets to total assets ratio, and Liquid assets to deposits ratio were used as proxies for liquidity management. The research population was all the 9 commercial banks in Botswana and the study covered a period of 9 years from 2011 to 2019. This descriptive study sourced monthly secondary data from Bank of Botswana Financial Statistics database. Descriptive statistics, correlation and regression analyses were applied to analyse the data. The results from regression analysis show statistically significant positive relationships for Loans to total assets ratio and Liquid assets to total assets ratio with return on assets and return on equity. Loans to deposits ratio and Liquid assets to deposits ratio had statistically significant negative relationships with return on assets and return on equity. Cash and cash equivalents to total assets ratio had statistically insignificant positive relationship with return on assets and return on equity whilst cash to deposits ratio had statistically insignificant negative relationship with return on assets and return on equity. Findings suggest that the commercial banks should try to optimize liquidity variables to boost bank performance. The policy makers also, through the Central Bank, should come up with initiatives such as prescribing minimum liquidity requirements that will help banks to stay profitable.

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Analysis of Determinants of Profitability of Commercial Banks in Botswana

Cited by 11 publications

References 10 publications

Effect of Firm Characteristics on Financial Performance of Listed Commercial Banks in Kenya

Effect of Firm Characteristics on Financial Performance of Listed Commercial Banks in Kenya

Efficiency, Profitability and Stability of Nepalese Commercial Banks

Liquidity Management and Financial Performance: Evidence From Commercial Banks in Botswana

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