While investigating determinants of bank profitability, identifying similarities and differences across the various economies studied by previous researchers is un -questionable. Needless to say, study on the factors that affect banks’ profitability in the developed world has been empirically examined by many authors unlike to that of the developing world. Therefore, the study on this issue especially from the developing world is advisable in order to boost competition and protect adverse effects in the banking sector. 2.5.1.Previous studies (International level) Khrawish (2011) scrutinized Jordanian commercial bank profitability from 2000 through 2010, and categorized the factors affecting profitability into internal and external factors. The author found that there is significant and positive relationship between return on asset (ROA) and the bank size, total liabilities / total assets, total equity total assets, net interest margin and exchange of commercial banks and that there is significant and negative relationship between ROA of the commercial banks and annual growth rate of for gross domestic product and inflation rate. Ramadan et al (2011) has investigated 100 observations of 10 banks over the period 2001-2010 by using two measures of bank’s profitability: the rate of return on asset (ROA) and the rate of Return on equity (ROE). The research results indicated that the Jordanian bank’s characteristics explain a significant part of the variation in bank profitability. In other words, high profitability in the Jordanian banking sector tends to be associated with well capitalized banks, high lending activities, low credit risk, and the efficiency of cost management. The study also showed that size did not support the significant scale of economies for Jordanian banks. Gul et al. (2011) examined the relationship between bank- specific and macro-economic characteristics over bank profitability by using data of top fifteen Pakistani commercial banks over the period 2005-2009. The paper used the Pooled Ordinary Least Squares (POLS) method to investigate the impact of assets, loans, equity, deposits, economic growth, inflation and market capitalization on major profitability indicators that is , return on assets (ROA), return on equity (ROE), return on capital employed (ROCE) and net interest margin (NIM) separately . The empirical results pointed out that the internal and external factors have strong impact on the banks profitability.
Financial Performance of Private Commercial Banks in Ethiopia: A CAMEL Approach201624 Olweny and Shipho (2011) have tried to conduct to determine the effects of bank specific factors: capital adequacy, Asset quality, operational cost efficiency, and income diversification on the profitability of commercial banks in Kenya. Moreover, they have tried to analyze and evaluated the effects of market structure factors such as foreign ownership and market concentration in the profitability of commercial banks in Kenya. They have adopted an