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Assessment of Efficiency and Profitability of Listed Banks in Ghana

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  • John Kwaku mensah Mawutor
  • Awah Fred

Abstract

The Ghanaian banking industry has had both good and bad times as far as profit is concerned. However, the industry remains good, as evidened from the rising number of other banks from the continent to either merge with the indigenous banks or take over the operation of some of the local banks. In this view this; the study assessed the efficiency and profitability of banks operating in Ghana by using listed banks between the years 2006 to 2011. This quantitative study employed panel data approach using regression analysis to assess the efficiency of banks operating on the Ghana Stock Exchange. The dependent variable is profitability, comprises of return on assets and the size of the firm. The independent variable efficiency also comprises leverage ratio, liquidity ratio, credit risk ratio and profitability ratio. The main source of data employed for this research is a secondary data. The study revealed that 60.74 percent of the variation or changes in the profitability of the banks are accounted for by the independent variables such as the liquidity level, leverage, productivity, credit risk and size of the banks. This was revealed by the coefficient of determination (R2) which shows the amount of variation in the dependent variable as being explained by the independent variables

Suggested Citation

  • John Kwaku mensah Mawutor & Awah Fred, 2015. "Assessment of Efficiency and Profitability of Listed Banks in Ghana," Accounting and Finance Research, Sciedu Press, vol. 4(1), pages 164-164, February.
    • Handle: RePEc:jfr:afr111:v:4:y:2015:i:1:p:164
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    References listed on IDEAS

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    1. John V. Duca & Mary M. McLaughlin, 1990. "Developments affecting the profitability of commercial banks," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jul, pages 477-499.
    2. Sailesh Tanna & Kyriaki Kosmidou & Fotios Pasiouras, 2005. "Determinants of profitability of domestic UK commercial banks: panel evidence from the period 1995-2002," Money Macro and Finance (MMF) Research Group Conference 2005 45, Money Macro and Finance Research Group.
    3. Berger, Allen N. & Hanweck, Gerald A. & Humphrey, David B., 1987. "Competitive viability in banking : Scale, scope, and product mix economies," Journal of Monetary Economics, Elsevier, vol. 20(3), pages 501-520, December.
    4. Cooper, Michael J. & Jackson, William III & Patterson, Gary A., 2003. "Evidence of predictability in the cross-section of bank stock returns," Journal of Banking & Finance, Elsevier, vol. 27(5), pages 817-850, May.
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    Cited by:

    1. TAHTAMOUNI, Abla S. & ALOMARI, Mohammad W. & BASHAYREH, Ala & ABDELHADI, Samer, 2020. "Jordanian Banking System: Analysis Of Technical Efficiency And Performance," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 24(3), pages 23-40, September.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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