Bank Specific Factors, Economic Factor and Profitability of Commercial Banks with Different Asset Sizes
DOI:
https://doi.org/10.55164/ecbajournal.v15i1.251906Keywords:
Bank-specific Factors, Economic Factor, Profitability, Assets SizeAbstract
This research examines the relationship between bank-specific factors, economic factors and profitability of commercial banks in Thailand. This research divides banks into 3 groups based on asset size: large banks (5); medium banks (3) and small banks (6). Bank-specific factors are capital adequacy and asset quality. Economic factor are inflation, gross domestic product and policy interest rates. The data for the research were quarterly time series data from Q1-2006 to Q2-2021. Analysis using a multiple regression analysis by Ordinary Least Squares (OLS) method. The study found that capital adequacy was associated with different profitability among banks of different sizes. The profitability of small banks is supported by strong capital funds. Bank asset quality correlates with profitability differently between banks of different sizes. Profitability of large and medium-sized banks is negatively affected by deteriorating asset quality. In addition, the policy interest rate was found to be associated with different profitability among banks of different sizes. The profitability of large and small banks benefited from the increase in the policy rate. Finally, the results showed that profitability was affected by inflation and gross product growth was not different between banks of different sizes.
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