Determinants of Financial Performance for the Banks Sector in Jordan


Abdullah Yusri Al Khatib

Abstract


This study contributes to analyze a very important sector in Jordan which is banking sector. This process will be revealed by analyzing the determinants of financial performance for the banks’ sector in Jordan during the period 2012- 2016. Return on Assets (ROA) was an indicator to measure the financial performance as dependent variable. On the other side, the independent variables were represented by microeconomic variables and macroeconomic variables.

 According to this study, microeconomic variables were liquidity quick ratio, cash and investments to total deposits, net credit facilities to total deposits, debt ratio, and profit margin.  In addition to that, macroeconomic variables were Gross Domestic Product growth rate (GDP), inflation rate, and unemployment rate as a percentage of total labor force.

After conducting the statistical analysis, there was an impact of profit margin on return on assets at 1% significance level. The study inferred from that there were no impact of the rest of microeconomic variables and macroeconomic variables as well on the financial performance indicator. So, the study recommended banks sector in Jordan to focus and analyze the profit margin beside to analyze the changes in other independent indicators to improve the financial performance for banks sector in Jordan.    


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References


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About this article

Title

Determinants of Financial Performance for the Banks Sector in Jordan

Date

01-07-2018

Additional Links

Manuscript Submission

Journal

Innovare Journal of Business Management
Vol 6 Issue 1 2018 (Jan-June) Page: 13-19

Online ISSN

2321-6816

Authors & Affiliations

Abdullah Yusri Al Khatib
The World Islamic Sciences and Education University - Islamic Banking. Amman - Jordan
Jordan


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