Global Advanced Research Journal of Management and Business Studies (ISSN: 2315-5086) June 2015 Vol. 4(6), pp 216-226
Copyright © 2015 Global Advanced Research Journals
Original Research Articles
Examining the Bank Specific Determinants of Profitability among Commercial Banks in Namibia
Johannes Peyavali Sheefeni Sheefeni
Department of Accounting, Economics and Finance, Polytechnic of Namibia, Windhoek, Namibia
Accepted 26 June 2015
This paper analyses the bank-specific determinants for commercial bank’s profitability in Namibia. The study employed the techniques of unit root, cointegration, impulse response functions and forecast error variance decomposition on the quarterly data covering the period 2001 to 2014. The results reveal that capital adequacy, credit risk and liquidity risk as the main determinant of commercial bank’s profitability in Namibia. This suggests that the quality of loan portfolio determines the profitability of banks. Moreover, the bank has the ability to fulfill its obligations to the depositors. Lastly, the banks have required level of capital that enable them to withstand credit, market and operational risks they are exposed to in order to absorb the potential loses and protect the bank's debtors.
Keywords: Bank specific, commercial banks profitability, Namibia, unit root, cointegration, impulse response function.