Factors Affecting Bank Financial Performance: The Case Of Sellected Banks In Ethiopia

Abstract

The main Objective of this study is to examine the factors affecting effectiveness of financial performance of banks. To identify the major factors and the degree of impact, this study used both descriptive and multiple regressions. According to the analysis result, some of the data were significant. Pearson correlation coefficient reveals significant correlation coefficient of the factors with the effectiveness of bank financial performance management system. Moreover, the result of the multiple regression showed that the factors have an effect on bank financial performance return on asset capital adequacy and LOGAGE negative effect on bank performance asset quality liquidity, management capability positive effect on bank performance. Based on the study findings, the researcher forwarded recommendations and reported the result to the banks. Commercial banks should give high emphasis on the return asset, return on equity, liquidity possession, asset quality, management capability in order to attain the effectiveness of bank financial performance.