Factors Influence on the Profitability of ABC Bank PLC

In the present context the banking industry in Sri Lanka has become highly competitive. The country is filled with financial institutions more than required to serve the people in Sri Lanka. As a result of the stiff competition between the banks, it has become a real challenge for each of them to earn profit and there are many factors that influence the profitability of the banks. The study is all about the ABC Bank PLC in Sri Lanka and analyzed the determinants which have their impact on the profitability of the bank. There are internal and external variables influencing the profitability of the banking industry. The study especially analyzed the internal determinants which affect the profitability of the bank. There were number of studies done in the past and based on the studies the dependent variable has been identified as Return on Asset in order to measure the profitability and the following variables are identified as independent variables; Total Asset, Non-Interest Income, Cost Income ratio, Equity ratio and Loan Loss Provision/Total Loans. The analysis is done based on the secondary data published by the ABC Bank PLC. The empirical results exhibit the relationship between the dependent variable and the independent variables. Further the recommendations are given based on the empirical results from this study.