IDEAS home Printed from https://ideas.repec.org/a/spt/apfiba/v4y2014i1f4_1_7.html
   My bibliography  Save this article

Impact of Internal Factors on Bank Profitability: Comparative Study between Saudi Arabia and Jordan

Author

Listed:
  • Ahmad Aref Almazari

Abstract

This paper investigated the internal factors that affecting profitability of banks. The main objective was to compare the profitability of the Saudi and Jordanian banks by using the internal factors for estimations. The necessary data was collected from secondary sources. A sample of twenty three Saudi and Jordanian banks was considered with 161 observations for the period 2005-2011. Financial ratios were calculated and statistical tools including Pearson’s correlation, descriptive analysis of variance and regression analysis were utilized in testing the hypotheses and to measure the differences and similarities between the sample banks according to their different characteristics. The factors influencing the profitability were tested empirically. However, the results indicated that there is a significant positive correlation between ROA of Saudi banks with TEA, TIA and LQR variables, as well as a negative correlation with NCA, CDR, CIR and SZE variables. Meanwhile, there is a significant positive correlation between ROA of Jordanian banks with LQR, NCA, TEA and CDR variables, also there is a negative correlation of return on assets with CIR, TIA and SZE. It is recommended that empirical studies should be undertaken in the same field to find out what more internal factors could affect profitability of banks.

Suggested Citation

  • Ahmad Aref Almazari, 2014. "Impact of Internal Factors on Bank Profitability: Comparative Study between Saudi Arabia and Jordan," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 4(1), pages 1-7.
    • Handle: RePEc:spt:apfiba:v:4:y:2014:i:1:f:4_1_7
    as

    Download full text from publisher

    File URL: http://www.scienpress.com/Upload/JAFB%2fVol%204_1_7.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zeyad Alkhazali & Ayman Abu-Rumman & Naser Khdour & Khaleel Al-Daoud, 2020. "Empowerment, HRM practices and organizational performance: a case study of Jordanian commercial banks," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 7(4), pages 2991-3000, June.
    2. Ihsen Abid & Mohamed Goaied & Mouldi Ben Ammar, 2019. "Conventional and Islamic Banks’ Performance in the Gulf Cooperation Council Countries; Efficiency and Determinants," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(3), pages 623-665, September.
    3. Sapto Jumono & Noer Azam Achsani & Dedi Budiman Hakim & Muhammad Fidaus, 2016. "The Effect of Loan Market Concentration on Banking Rentability: A Study of Indonesian Commercial Banking, Dynamics Panel Data Regression Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 6(1), pages 207-213.
    4. Md. Abu Issa Gazi & Md. Nahiduzzaman & Iman Harymawan & Abdullah Al Masud & Bablu Kumar Dhar, 2022. "Impact of COVID-19 on Financial Performance and Profitability of Banking Sector in Special Reference to Private Commercial Banks: Empirical Evidence from Bangladesh," Sustainability, MDPI, vol. 14(10), pages 1-23, May.
    5. Achraf Haddad & Anis El Ammari & Abdelfettah Bouri, 2019. "Are the Islamic Banks Really more Profitable than the Conventional Banks in a Financial Stable Period?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(9), pages 994-1018, September.
    6. Leandro Coghi Bernardelli & Carlos Enrique Carrasco-Gutierrez, 2024. "Macroeconomic, industry-specific and bank-specific determinants of the profitability of Brazilian banks: dynamic panel evidence," Empirical Economics, Springer, vol. 67(2), pages 693-726, August.
    7. P. Thich D. & П. Тхих Д., 2017. "Детерминанты доходности банков: эмпирические данные из Вьетнама // Determinants of Banks’ Profitability: Empirical Evidence from Vietnam," Review of Business and Economics Studies // Review of Business and Economics Studies, Финансовый Университет // Financial University, vol. 5(4), pages 37-45.
    8. Tri Wulandari & Lukytawati Anggraeni & Trias Andat, 2016. "Modeling the profitability of commercial banks in Indonesia," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 8(2), pages 109-119, April.
    9. Sutrisno & Agus Widarjono, 2018. "Maqasid Sharia Index, Banking Risk and Performance Cases in Indonesian Islamic Banks," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(9), pages 1175-1184, September.
    10. Khawla K. Abdo, 2020. "The Impact of Internal Variables on the Islamic Banks and Conventional Banks Financial Performance in Jordan: A Comparative Study," International Journal of Economics and Financial Issues, Econjournals, vol. 10(6), pages 222-231.
    11. Dayah Abdi Kulmie & Mohamed Abdirahman Abdulle & Mukhtar Sheikh Hussein & Hussein Abdi Mohamud, 2023. "Effects of Islamic Modes of Financing on Profitability of Banking Institutions," International Journal of Business and Management, Canadian Center of Science and Education, vol. 18(5), pages 237-237, October.
    12. Leonora Haliti Rudhani & Skender Ahmeti & Taulant Rudhani, 2016. "The Impact of Internal Factors on Bank Profitability in Kosovo," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 12(1), pages 95-107, February.
    13. Albert Antwi, 2021. "Analysis of Long-term Determinants of the Profitability for Amalgamated Bank of South Africa," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 10(3), pages 01-11, July.
    14. Muhammad Mahmood Shah Khan & Farrukh Ijaz & Ejaz Aslam, 2014. "Determinants of Profitability of Islamic Banking Industry: An Evidence from Pakistan," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 6(2), pages 27-46, October.
    15. Salma Zaiane & Fatma Ben Moussa, 2021. "What Drives Banking Profitability During Financial Crisis and Political Turmoil? Evidence from the MENA Region," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 13(3), pages 380-407, September.
    16. Lavinia Mihaela GUŢU, 2015. "Microeconomic Factors Affecting Banks’ Financial Performance: The Case Of Romania," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 7, pages 39-44, April.
    17. Nosheen & Abdul Rashid, 2021. "Financial soundness of single versus dual banking system: explaining the role of Islamic banks," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 20(1), pages 99-127, January.
    18. Mwinlaaru, Peter Yeltulme & Ofori, Isaac Kwesi & Adiyiah, Kwadwo Agyeman & Idun, Anthony Adu-Asare, 2016. "Non-Performing Loans and Universal Bank’s Profitability," MPRA Paper 82902, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spt:apfiba:v:4:y:2014:i:1:f:4_1_7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Eleftherios Spyromitros-Xioufis (email available below). General contact details of provider: http://www.scienpress.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.