The impact of credit risk on profitability performance of commercial banks in Ethiopia

By Gizaw Million, Kebede Matewos, Selvaraj Sujata. 2015

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The objective of the study was to empirically examine the impact of credit risk on profitability of commercial banks in Ethiopia. For the purpose secondary data collected from 8 sample commercial banks for a 12 year period (2003-2004) were collected from annual reports of respective banks and National Bank of Ethiopia. The data were analyzed using a descriptive statics and panel data regression model and the result showed that credit risk measures: non-performing loan, loan loss provisions and capital adequacy have a significant impact on the profitability of commercial banks in Ethiopia. The study suggested a need for enhancing credit risk management to maintain the prevailing profitability of commercial banks in Ethiopia.   Key words: Commercial banks, credit risk, Ethiopia, panel data regression performance, profitability.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/d63f9ed08691096b7e68390c025e4cbba6a55f93