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|Title: ||Impact of Macroeconomic variables on profitability of Ghana Commercial Bank and Agricultural Development Bank in Ghana|
|Authors: ||Kankam, Akua Konadu|
|Issue Date: ||29-Sep-2016|
|Abstract: ||The survival of Commercial Banks in Ghana depends on the ability of the banks to maximize their returns on the resources they employ. Nonetheless, the ability of these banks to make profit is dependent on macroeconomic variables, which are crucial in determining profitability of banks.
Several studies have been conducted on the impact of macroeconomic variables on profitability of banks but the results lack consensus. This study therefore sought to find the impact of Gross Domestic Product, Real Interest Rate, Exchange Rate and Inflation on the profitability of Ghana Commercial Bank (GCB) and Agricultural Development Bank (ADB) in Ghana.
The study employed Autoregressive Distributed Lag (ARDL) estimation technique using data for the two banks from 1980 to 2014. The study found that real interest rates and GDP had a negative and significant effect on profitability of ADB but interest rate had a positive and significant effect and GDP had insignificant effect on profitability of GCB. Exchange Rate had a positive and significant effect on the profitability of ADB but insignificant effect on that of GCB.
Since macroeconomic variables play a crucial role in the profitability of banks in Ghana, it is expedient that the government implements macroeconomic policies that will encourage sustainable growth and conducive environment for banks to grow and increase their returns in the economy, in order to be able to advance support to businesses in the country in the form of loans.|
|Description: ||A thesis submitted to the department of economic in Kwame Nkrumah University of Science and Technology (KNUST), for a partial fulfilment of the requirement for the degree of Master of Sciences in Economics, 2016|
|Appears in Collections:||College of Arts and Social Sciences|
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