The impact of selected internal factors on the profitability of commercial banks in Jordan
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Author(s)Mohammad Sulieman Mohammad JaradatLink to ORCID Index: https://orcid.org/0000-0003-3426-746X
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Khaled Abdalla Moh’d AL-TamimiLink to ORCID Index: https://orcid.org/0000-0002-8039-7487
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Samer Fakhri ObeidatLink to ORCID Index: https://orcid.org/0000-0002-5944-2474
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Ashraf BatainehLink to ORCID Index: https://orcid.org/0000-0002-9249-9472
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DOIhttp://dx.doi.org/10.21511/bbs.17(3).2022.19
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Article InfoVolume 17 2022, Issue #3, pp. 227-236
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166 Downloads
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Creative Commons Attribution 4.0 International License
This paper analyzes the impact of internal factors on the profitability of commercial banks in Jordan in the period of 2009–2019. Bank size, capital adequacy, bank loans, bank and liquidity risk are taken as explanatory variables, with the rate of return on assets as a dependent variable. EViews software was used for regression analysis. This study highlights a significant and positive effect of f-statistics for SGBJ Bank, Kuwait Bank, Capital Bank, ABC Bank, and Arab Bank – 11.34, 5.46, 5.11, 5,14 and 5.62, respectively. This means that internal factors affect their profitability, there is a positive effect of internal factors on the profitability of SGBJ, Kuwait Bank, ABC Bank, and Arab Bank. SGBJ’s R-squared was 88%.This indicates that any change inthe bank’s profitability is 88% due to a change in internal factors, while R-squared of Kuwait Bank, Capital Bank, ABC Bank and Arab Bank was 78%, 77%, 77%, and 77%, respectively, indicating that changes in the banks’ profitability were caused by internal factors. This is due to the bank loan ratio, where SGBJ’s ratio 48.6 and the bank loan rate were 79% of total assets. Kuwait Bank 29.1, so bank loan rate is 56% of total assets, Cairo Bank 36.3, ABC Bank 11.8, and Capital Bank 16.37; f-statistics of Alethad Bank, Invest Bank, Arab Invest Bank, Housing Bank, Ahli Bank, Commercial Bank, Cairo Bank, and Jordan Bank were 0.75, 2.17, 1.61, 2.48, 2.26, 3.25, and 2.72, respectively. This indicates that internal factors do not affect the profitability of these banks.
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JEL Classification (Paper profile tab)G21, G29
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References29
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Tables14
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Figures0
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- Table 1. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Aletihad Bank in Jordan
- Table 2. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for SGBJ Bank in Jordan
- Table 3. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Invest Bank in Jordan
- Table 4. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Arab Investment Bank in Jordan
- Table 5. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Housing Bank in Jordan
- Table 6. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Ahli Bank in Jordan
- Table 7. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Kuwait Bank in Jordan
- Table 8. Return on assets, size of banks, capital adequacy, bank loans, and bank risk and liquidity risk for Commercial Bank in Jordan
- Table 9. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Capital Bank in Jordan
- Table 10. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Cairo Bank in Jordan
- Table 11. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Jordan Bank in Jordan
- Table 12. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for ABC Bank in Jordan
- Table 13. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Arab Bank in Jordan
- Table 14. Results of the impact of internal factors on 13 commercial banks’ profitability in Jordan during the period 2009–2019 using multiple regression analysis
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Service quality, customers’ satisfaction, and profitability: an empirical study of Saudi Arabian insurance sector
Anis Ali ,
Mohammad Rumzi Tausif
doi: http://dx.doi.org/10.21511/imfi.15(2).2018.21
Investment Management and Financial Innovations Volume 15, 2018 Issue #2 pp. 232-247 Views: 3418 Downloads: 571 TO CITE АНОТАЦІЯFinancial performance is the fundamental aspect to test the performance of the companies. The performance of insurance sector, like any other service industry, is supposed to depend significantly on customers. When it comes to customers, it is an established fact that customer satisfaction would be an important element. Customer satisfaction primarily depends on the quality of service it gets. It can be safely hypothesized that better service quality would lead to higher satisfaction, which would ultimately lead to higher profits for the company. Studies on this relationship in the insurance sector for Saudi Arabia are missing. Hence, this study aims at studying both the profitability of companies and quality of service and tries to relate it to customer satisfaction. The results are quite surprising, as the study establishes that although the qualities of services are found wanting in many areas, companies are earning good profits. A probable reason could be the statutory nature of the services. Nevertheless, this study recommends improving the quality of services and differentiating services between age groups for further improvement.
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The moderating role of firm size and interest rate in capital structure of the firms: selected sample from sugar sector of Pakistan
Sarfraz Hussain ,
Abdul Quddus ,
Pham Phat Tien ,
Muhammad Rafiq ,
Drahomíra Pavelková
doi: http://dx.doi.org/10.21511/imfi.17(4).2020.29
Investment Management and Financial Innovations Volume 17, 2020 Issue #4 pp. 341-355 Views: 3401 Downloads: 364 TO CITE АНОТАЦІЯThe selection of financing is a top priority for businesses, particularly in short- and long-term investment decisions. Mixing debt and equity leads to decisions on the financial structure for businesses. This research analyzes the moderate position of company size and the interest rate in the capital structure over six years (2013–2018) for 29 listed Pakistani enterprises operating in the sugar market. This research employed static panel analysis and dynamic panel analysis on linear and nonlinear regression methods. The capital structure included debt to capital ratio, non-current liabilities, plus current liabilities to capital as a dependent variable. Independent variables were profitability, firm size, tangibility, Non-Debt Tax Shield, liquidity, and macroeconomic variables were exchange rates and interest rates. The investigation reported that profitability, firm size, and Non-Debt Tax Shield were significant and negative, while tangibility and interest rates significantly and positively affected debt to capital ratio. This means the sugar sector has greater financial leverage to manage the funding obligations for the better performance of firms. Therefore, the outcomes revealed that the moderators have an important influence on capital structure.
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The effect of working capital management on profitability: a case of listed manufacturing firms in South Africa
Investment Management and Financial Innovations Volume 14, 2017 Issue #2 (cont. 2) pp. 336-346 Views: 3178 Downloads: 2647 TO CITE АНОТАЦІЯWorking capital management plays a pivotal role in enhancing the operational efficiency of firms and their ultimate profitability. Therefore, the purpose of this study was to examine the trends in working capital management and its impact on the financial performance of listed manufacturing firms on the Johannesburg Securities Exchange (JSE). A panel data methodology was used with different regression estimators to analyze this relationship based on an unbalanced panel of 69 manufacturing firms listed during the period 2007–2016.
The findings revealed that the average collection period and the average payment period are negative and statistically significant for profitability, implying that firms which efficiently manage their accounts receivable and those that pay their creditors on time perform better than those that do not. Additionally, a positive statistically significant relationship between the number of days in inventory and profitability was supported suggesting that firms which stock-up and maintain their inventory levels suffer less from stock-outs and avoid challenges of securing financing when needed. This increases their operational efficiency and ensures profitability in the long run. It could not be ascertained whether a shorter or longer cash conversion cycle enhances firm profitability, since findings to support this premise were weak. However, it was observed that manufacturing firms are on average, carrying lot of debt in their capital structures.
The present study contributes to existing literature by presenting one of the very recent findings on this topic while simultaneously testing the validity of recent local and international methodologies, in order to inform policy change.
