Factors affecting the profitability of commercial banks listed in the stock exchange of Thailand

Abstract

The objective of this study is to investigate factors affecting the profitability of commercial banks registered in The Stock Exchange of Thailand. 11 commercial banks are used to analyze the data. The sample data set used in the analysis is 11 commercial banks in Thailand. This study data quarterly information from the first quarter of the year 2558 to the fourth quarter of the year 2562 which are 220 data sets in total. The research data is a panel data and the Random Effect Model is implemented to the study.

The research results found that independent variables referring to non-performing loans to total loans ratio (NPL), operating expense to total income ratio (OEI) and the growth rate of gross domestic product (GDP) had a relationship in the opposite direction with the dependent variable which is profitability or Return on Asset (ROA). This relationship is significantly statistical at the confidence level of 99%. However, fee and services income to total asset ratio (FSA) and allowance for doubtful accounts to total loans ratio (ADL) had statistically a relationship in the same direction with the dependent variable at the confidence level of 99%. Finally, interest income to total income ratio (III) had statistically no relationship with the dependent variable the 90% confidence level.