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The banking industry has seen considerable changes in its operating environment throughout the world during the previous two decades. Despite a growing tendency toward bank disintermediation in many countries, banks continue to play a critical role in funding country's economic activities in general and certain market sectors in particular. This research aims to investigate the bank-specific and macroeconomic determinants of the banks' profitability in Jordan from 2009 to 2019. Profitability has been taken as an indicator of bank-specific and macroeconomic determinants by measuring the Return on assets (ROA) and Return on Equity (ROE). Secondary data were used to balance the panel data set. The result reveals that the amount of the bank's assets and non-interest income has a positive and substantial effect on its profitability. However, the size of the credit portfolio and loans under review has a considerable negative influence on the profitability of the bank. Only the real interest rate positively affects banks' performance concerning macroeconomic variables. These results suggest that banks can improve their profitability through increasing bank size and non-interest income, decreasing the credit/asset ratio. In addition, a higher real interest rate can lead to higher bank profitability.
Hossam Haddad (Thu,) studied this question.