There is an huge amount of literature is available that seeks to identify the determinants of bank performance. Where some studies focus on the understanding of bank profitability in a particular country, others focus their analysis on a panel of countries. In the literature, bank profitability, usually measured by the return on assets (ROA) and/or the return on equity (ROE), is typically expressed as a function of internal and external determinants. Internal determinants are causes that are mainly influenced by a bank’s management decisions and policy objectives. Such profitability determinants are the level of liquidity, credit risk, capital adequacy, operating expenses management and bank size. On the other side, the external determinants, macroeconomic, are variables that reflect the economic environment where the credit institution operates.
Showing posts with label return on assets. Show all posts
Showing posts with label return on assets. Show all posts
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