Effect of Financial Markets on Profitability of Commercial Bank Case Study of People Bank of Zanzibar Year 2005 to 2020.

Ali, Yumna Khamis (2024) Effect of Financial Markets on Profitability of Commercial Bank Case Study of People Bank of Zanzibar Year 2005 to 2020. Masters thesis, The Open University of Tanzania.

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Abstract

The aim of this study is to examine the Effects of liquidity, Management efficiency and Capital adequacy on profitability of commercial bank of bank on Tanzania, with a case study of PBZ. The focus involved the analysis of PBZ bank operating in Tanzania for a period of 15 years, from 2005 to 2020. The study employed, Capital adequacy, Management efficiency, and Liquidity as independent variable as dependent value banks profitability in the context of framework. The study employed Liquidity preference theory and adopted a multiple regression model in analysing the data to determine factors of financial markets on profitability on commercial banks in Tanzania. The study employed descriptive research design as panel data, from PBZ Bank annual financial reports were reviewed for completeness and consistency for proper statistical analysis. The results reveal that there is a positive relationship between liquidity and commercial banks profitability while, management efficiency are significantly negative related to the commercial banks profitability While capital adequacy is negative with insignificant relation to the commercial banks profitability. The study concluded that there is high influence of liquidity on profitability of Tanzania Commercial Banks PBZ being the case as shown on the regression model results. Furthermore, this study recommends that Tanzania Commercial banks should invest in liquidity risk management that ensures the possible profitability realization. Keywords: Liquidity, Commercial Banks, Capital, Management efficiency, Profitability.

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