The Determinants of the Commercial Banks Profitability in Tanzania: Panel Evidence

Abstract

This paper examines determinants of commercial banks profitability in Tanzania with a particular focus on the internal and external factors. The study employs a set of panel secondary data from a sample of eighteen (18) commercial banks for the period (2000-2011) and uses CAMEL model to investigate the financial performance level of the banking system. Furthermore, The study employs multiple regression model to generate and specify the profitability function.  The results confirm that capital adequacy, liquidity, asset quality and macro-economic factors are critical components in influencing profitability of the commercial banks.

Keywords: Profitability, Multiple Regression, Commercial Banks