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 the CAMEL model to investigate the financial performance level of the banking system. Furthermore, The study employs a 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.