Determinants of Bank Profitability in Ghana

Abstract

Our study attempts to investigate the relationship between profitability and a set of bank-specific characteristics and macroeconomic factors on foreign and local banks in Ghana between 1999 and 2010. The findings suggest that cost management has an inverse relationship with profitability, bank size and credit risk show a positive association with profitability. The results apply to foreign and local banks as well. Our results suggest that bank management should pay attention to cost maintenance, and prudent risk management to deliver profitability, and perhaps build bigger local banks.