TAILIEUCHUNG - Commercial banks profitability and stock market developments

The study examines whether the market capitalization and trading volume could be the determinants of the commercial banks profitability in Jordan and then to evaluate which performance measure between returns on assets (ROA) and returns on equity (ROE) is better to be used in measuring the profitability of those banks. Two Multiple regression models are used to examine these relationships for 13 Jordanian commercial banks within 2009-2013. It is found that market capitalization variable has negative and significant influence on ROA, but it has significant positive influence on ROE; trading volume has strongly significant and positive influence on both ROE and ROA, suggesting that trading volume is the determinant for the profitability; and finally, ROE is a more superior measure of profitability to ROA. Our results might assist all interested parties in indicating the relationship boundaries between stock market developments and banks’ profitability then may represent an explanation for financial incentives and barriers in financing nonfinancial industries which will be affected by the changes in bank competition in stock market. | Journal of Applied Finance Banking vol. 6 no. 4 2016 43-52 ISSN 1792-6580 print version 1792-6599 online Scienpress Ltd 2016 Commercial Banks Profitability and Stock Market Developments Karima Sayari1 and Dhiaa Shamki2 Abstract The study examines whether the market capitalization and trading volume could be the determinants of the commercial banks profitability in Jordan and then to evaluate which performance measure between returns on assets ROA and returns on equity ROE is better to be used in measuring the profitability of those banks. Two Multiple regression models are used to examine these relationships for 13 Jordanian commercial banks within 2009-2013. It is found that market capitalization variable has negative and significant influence on ROA but it has significant positive influence on ROE trading volume has strongly significant and positive influence on both ROE and ROA suggesting that trading volume is the determinant for the profitability and finally ROE is a more superior measure of profitability to ROA. Our results might assist all interested parties in indicating the relationship boundaries between stock market developments and banks profitability then may represent an explanation for financial incentives and barriers in financing nonfinancial industries which will be affected by the changes in bank competition in stock market. JEL classification numbers D81 G14 G21 L11 M41 N25 Keywords Jordanian commercial banks ROA ROE market capitalization and trading volume 1 Introduction Profitability has been considered as a performance measure for the banking industry in different economies. Usually return on equity ROE and return on assets ROA ratios as profitability indicators are employed widely to determine banks performance in Corresponding Author Assistant Professor at Department of Managerial and financial Sciences Al Zahra College for Women Muscat Sultanate of Oman. 2Assistant Professor at Department of Managerial and financial Sciences Al Zahra .

• Đầu tư Chứng khoán
• Jordanian commercial banks
• Market capitalization
• Trading volum
• Stock market developments
• Commercial banks profitability
• Critical success factors
• Balanced scorecard
• Financial performance
• Structural equation modeling
• Accounting information systems reliability
• Enhancing the requirements of planning process
• Planning process requirements
• Bank capital
• Credit risk
• Commercial banks
• Vietnam’s commercial banks
• Generalized method of moment
• Bank profitability
• Banking system
• Asset profitability
• Equity profitability
• Multilinear regression
• Summary of Phd thesis Finance – Banking
• Summary of Phd thesis
• Profitability of Vietnamese commercial banks
• Context of the world economic crisis
• World economic crisis
• Summary of PhD thesis in Finance Banking
• Finance Banking
• Credit risks
• Vietnam joint stock commercial banks
• Credit risks on the profitability
• Financial crisis
• Commercial bank
• Bank performance
• Financial crisis affected the profitability
• Banks in croatia
• Commercial banks in Vietnam
• Khả năng sinh lời
• Ngân hàng thương mại Việt Nam
• The loans to total assets ratio
• The equity to total assets ratio
• Liquidity Ratio
• Non performing loans
• Vietnamese commercial banks
• Top priority of banking operation
• Net interest margin
• Aggressive lending strategies
• Income diversification
• Herfindahl Hirschman index
• Non interest income
• Impact of the external
• Internal factors of bank performance
• Indian commercial banks
• Return on Assets