European Journal of Business and Innovation Research (EJBIR)

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Bank Capital and Profitability: A Study of Selected Banks in Ghana

Abstract

The study investigated the relationship between bank equity capital and profitability by sampling fourteen (14) banks, using the purposive sampling technique, out of the twentyeight (28) universal banks operating in Ghana at the time, with data covering an eleven- year period (2005-2015). The study adopted the panel data methodology to examine the effect of bank capital on profitability. The random-effects Generalised Least Square (GLS) regression was adopted as an estimation technique for the research.  The study revealed that equity capital is significantly and positively related to Net Interest Margin (NIM), and Return-on-Equity (ROE). Bank size is significantly and negatively related to ROE, and insignificantly inversely related to NIM. Regulated bank capital is a disincentive to inclusive financial intermediation in Ghana.

Keywords: Bank, Capital, Equity, Ghana, Profitability, Size

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This work by European American Journals is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 Unported License

 

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Email ID: editor.ejbir@ea-journals.org
Impact Factor: 7.79
Print ISSN: 2053-4019
Online ISSN: 2053-4027
DOI: https://doi.org/10.37745/ejbir.2013

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