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Determinants of Bank Profitability: Evidence from Syria

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  • Mohamed Khaled Al-Jafari
  • Mohammad Alchami

Abstract

This study investigates the determinants of bank profitability in the Syrian banking sector. It seeks to identify significant bank-specific, industry-specific, and macroeconomic determinants of bank profitability in Syria. We utilize the Generalized Method of Moments (GMM) technique on unbalanced panel data set the covers the period from 2004 until 2011. The empirical results reveal that profitability persists to a moderate extent. All bank-specific determinants (liquidity risk, credit risk, bank size, and management efficiency) with the exception of bank capital, affect bank profitability significantly. However, no evidence was found in support of the Structure Conduct Performance (SCP) hypothesis, since the concentration ratio found to have no impact on bank profitability. Finally, the study shows that macroeconomic variables (inflation rate and real gross domestic product growth rate) affect bank profitability significantly.

Suggested Citation

  • Mohamed Khaled Al-Jafari & Mohammad Alchami, 2014. "Determinants of Bank Profitability: Evidence from Syria," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 4(1), pages 1-2.
    • Handle: RePEc:spt:apfiba:v:4:y:2014:i:1:f:4_1_2
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    Cited by:

    1. Le Ngoc Thuy Trang & Do Thi Thanh Nhan & Nguyen Thi Nhu Hao & Wing-Keung Wong, 2021. "Does Bank Liquidity Risk Lead To Bank'S Operational Efficiency? A Study In Vietnam," Advances in Decision Sciences, Asia University, Taiwan, vol. 25(4), pages 46-88, December.
    2. José Carlos Teixeira & Carlos Vieira & Paulo Ferreira, 2021. "The Effects of Government Bonds on Liquidity Risk and Bank Profitability in Cape Verde," IJFS, MDPI, vol. 9(1), pages 1-23, January.
    3. Haidar Haidar, 2022. "Efficiency of Syrian Banks: A Nonparametric Frontier Approach," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 12(6), pages 1-2.
    4. Ibrahim Abidemi Odusanya & Olumuyiwa Ganiyu Yinusa & Bamidele M. Ilo, 2018. "Determinants of Firm Profitability in Nigeria: Evidence from Dynamic Panel Models," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 68(1), pages 43-58, January-M.
    5. Santosh Kumar Das & Khushboo Uppal, 2021. "NPAs and profitability in Indian banks: an empirical analysis," Future Business Journal, Springer, vol. 7(1), pages 1-9, December.
    6. Mukaddaskhon ANVAROVA & Olmas ISAKOV, 2022. "Impact of government ownership on banks' profitability: Empirical evidence from commercial banks in Uzbekistan," Journal of Economics and Financial Analysis, Tripal Publishing House, vol. 6(1), pages 37-53.
    7. Serhat Yüksel & Shahriyar Mukhtarov & Elvin Mammadov & Mustafa Özsarı, 2018. "Determinants of Profitability in the Banking Sector: An Analysis of Post-Soviet Countries," Economies, MDPI, vol. 6(3), pages 1-15, July.

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