Determinants of Banks Profitability in a Developing Economy: Empirical Evidence from Palestine

Abstract

e unimpressive banks' performance in Nigeria over the last decade has remained a source of concern for all and sundry. is study investigates the eeects of bank capital, bank size, expense management, interest income and the economic condition on banks' prootability in Nigeria. e xed eeects regression model was employed on a panel data obtained om the nancial statements of 20 banks om 2006 to 2012. e results indicate that improved bank capital and interest income, as well as eecient expenses management and favourable economic condition, contribute to higher banks' performance and growth in Nigeria. us, government policies in the banking system must encourage banks to regularly raise their capital and provide the enabling environment that will accelerate economic growth in the country. Bank management must eeciently manage their portfolios in order to protect the long run interest of proot-making.