positive and highly significant (39586.524). A bank with a more deposit is able to become more profitable. The coefficient of loan asset ratio is positive and significant. This positive effect implies that banks with a high proportion of loan asset ratio have a higher profitability.

24Table 4.3: Model Summary for Profitability with the predictor variables Model SummaryModel R R Square Adjusted R Square Std. Error of the Estimate Durbin-Watson 1 .890a.793 .753 25088.057 2.191 a. Predictors: (Constant), Loan asset ratio, Deposit Ratio (DR), Liquidity Asset Ratio, Loan b. Dependent Variable: Profit (Net Income) Source: Research Findings The adjusted R2, also called the coefficient of multiple determinations, is the percentage of the variance in the dependent variable explained uniquely or jointly by the independent variables (Loan asset ratio, Deposit ratio, liquidity asset ratio and the Loan level) and is 89 %. This means that 89 % of the changes in the banks’ profitability will be explained by the changes in the independent variables and control variables in the model. The remaining 11% of the changes in the profits is explained by other factors not in the model. With the Durbin-Watson factor of 2.191 which is less than 2.5, it means that there is no autocorrelation in the independent variables and it can be concluded that there independent variables do not depend on each other. 4.3.2 Test of Multicollinearity: Pearson and Spearman's Correlations Table 4.4 below shows the Pearson and Spearman’s correlation coefficient generated from the data. Consistent with Shin and Soenen (1998), the spearman's rank correlation coefficients are on the upper right triangle while the Pearson product moment correlation coefficients are on the lower left triangle. Pearson’s Correlation analysis is used for data to see the relationship between variables such as those between independent variables and profitability of the bank.

25Table 4.4: Pearson and Spearman’s Correlation CoefficientCorrelations Profit (Net Income) Liquidity Asset Ratio Deposit Ratio (DR) Bank Business Cycle Loan Loan asset ratio Profit (Net Income) Pearson Correlation 1 -0.098 -.450*.829**.829**-.586**Liquidity Asset Ratio Pearson Correlation -0.098 1 .402*-.443*-.443*-0.303 Deposit Ratio (DR) Pearson Correlation -.450*.402*1 -.690**-.690**0.156 Bank Business Cycle Pearson Correlation .829**-.443*-.690**1 1.000**-.493*Loan Pearson Correlation .829**-.443*-.690**1.000**1 -.493*Loan asset ratio Pearson Correlation -.586**-0.303 0.156 -.493*-.493*1 *. Correlation is significant at the 0.05 level (2-tailed). **. Correlation is significant at the 0.01 level (2-tailed). Source: Research Findings The observed relations in the table above depicts that the variables are highly correlated. This means that profit of the banks will change erratically in a response changes in the model or the values of the independent variable. The results from the table show that there is a positive relationship between the bank’s net income and bank business cycle and loan while a negative relationship exist between the net income and liquidity asset ratio, deposit ratio and loan asset ratio. The deposit ratio coefficient is negative meaning that if the banks deposit