Impact of Liquidity Management on the Profitability of Banks Operate in Palestine

Abstract

This study aims to explain the effect of the liquidity management on the profitability of the Palestinian banking sector during the time period 2008–2017. Palestinian banking sector has been chosen for the purpose of this study, which comprised from 14 banks Islamic and commercial. Multiple regression models were used to do the empirical analysis and; develop the econometric model which consisted of one dependent variable and eight independent variables. Return On Assets (ROA) was defined as profitability indicator. The data was collected from the audited annual reports of the sample banks, the Palestinian Monetary Authority (PMA)'s annual reports and Association of Banks in Palestine. The findings and analysis revealed that loans to deposits ratio had the most important significant effect on profitability.