The impact of selected internal factors on the profitability of commercial banks in Jordan

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This paper analyzes the impact of internal factors on the profitability of commercial banks in Jordan in the period of 2009–2019. Bank size, capital adequacy, bank loans, bank and liquidity risk are taken as explanatory variables, with the rate of return on assets as a dependent variable. EViews software was used for regression analysis. This study highlights a significant and positive effect of f-statistics for SGBJ Bank, Kuwait Bank, Capital Bank, ABC Bank, and Arab Bank – 11.34, 5.46, 5.11, 5,14 and 5.62, respectively. This means that internal factors affect their profitability, there is a positive effect of internal factors on the profitability of SGBJ, Kuwait Bank, ABC Bank, and Arab Bank. SGBJ’s R-squared was 88%.This indicates that any change inthe bank’s profitability is 88% due to a change in internal factors, while R-squared of Kuwait Bank, Capital Bank, ABC Bank and Arab Bank was 78%, 77%, 77%, and 77%, respectively, indicating that changes in the banks’ profitability were caused by internal factors. This is due to the bank loan ratio, where SGBJ’s ratio 48.6 and the bank loan rate were 79% of total assets. Kuwait Bank 29.1, so bank loan rate is 56% of total assets, Cairo Bank 36.3, ABC Bank 11.8, and Capital Bank 16.37; f-statistics of Alethad Bank, Invest Bank, Arab Invest Bank, Housing Bank, Ahli Bank, Commercial Bank, Cairo Bank, and Jordan Bank were 0.75, 2.17, 1.61, 2.48, 2.26, 3.25, and 2.72, respectively. This indicates that internal factors do not affect the profitability of these banks.

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    • Table 1. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Aletihad Bank in Jordan
    • Table 2. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for SGBJ Bank in Jordan
    • Table 3. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Invest Bank in Jordan
    • Table 4. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Arab Investment Bank in Jordan
    • Table 5. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Housing Bank in Jordan
    • Table 6. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Ahli Bank in Jordan
    • Table 7. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Kuwait Bank in Jordan
    • Table 8. Return on assets, size of banks, capital adequacy, bank loans, and bank risk and liquidity risk for Commercial Bank in Jordan
    • Table 9. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Capital Bank in Jordan
    • Table 10. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Cairo Bank in Jordan
    • Table 11. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Jordan Bank in Jordan
    • Table 12. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for ABC Bank in Jordan
    • Table 13. Return on assets, bank size, capital adequacy, bank loans, and bank risk and liquidity risk for Arab Bank in Jordan
    • Table 14. Results of the impact of internal factors on 13 commercial banks’ profitability in Jordan during the period 2009–2019 using multiple regression analysis
    • Conceptualization
      Mohammad Sulieman Mohammad Jaradat, Khaled Abdalla Moh’d AL-Tamimi, Samer Fakhri Obeidat, Ashraf Bataineh
    • Data curation
      Mohammad Sulieman Mohammad Jaradat, Khaled Abdalla Moh’d AL-Tamimi, Samer Fakhri Obeidat, Ashraf Bataineh
    • Formal Analysis
      Mohammad Sulieman Mohammad Jaradat, Khaled Abdalla Moh’d AL-Tamimi, Samer Fakhri Obeidat, Ashraf Bataineh
    • Investigation
      Mohammad Sulieman Mohammad Jaradat, Khaled Abdalla Moh’d AL-Tamimi, Samer Fakhri Obeidat, Ashraf Bataineh
    • Methodology
      Mohammad Sulieman Mohammad Jaradat, Khaled Abdalla Moh’d AL-Tamimi, Samer Fakhri Obeidat, Ashraf Bataineh
    • Project administration
      Mohammad Sulieman Mohammad Jaradat
    • Software
      Mohammad Sulieman Mohammad Jaradat, Khaled Abdalla Moh’d AL-Tamimi, Samer Fakhri Obeidat, Ashraf Bataineh
    • Supervision
      Mohammad Sulieman Mohammad Jaradat, Khaled Abdalla Moh’d AL-Tamimi, Samer Fakhri Obeidat, Ashraf Bataineh
    • Writing – original draft
      Mohammad Sulieman Mohammad Jaradat, Khaled Abdalla Moh’d AL-Tamimi, Samer Fakhri Obeidat, Ashraf Bataineh
    • Writing – review & editing
      Mohammad Sulieman Mohammad Jaradat, Khaled Abdalla Moh’d AL-Tamimi, Samer Fakhri Obeidat, Ashraf Bataineh