Risk Exposure and Financial Performance: An Empirical Analysis of Commercial Banks in Ethiopia

Ahmedie, Desalegn

dc.contributor.author	Ahmedie, Desalegn
dc.date.accessioned	2026-08-11T08:25:05Z
dc.date.available	2026-08-11T08:25:05Z
dc.date.issued	2026-06
dc.identifier.uri	http://ir.bdu.edu.et/handle/123456789/16976
dc.description.abstract	The primary purpose of the study is to examine how financial, efficiency, strategic, reputational, and interest rate risks affect the financial performance (measured by Return on Assets, ROA) of commercial banks in Ethiopia. The research adopts a quantitative, longitudinal approach using secondary data from audited annual reports of 17 banks over 2015–2024 (170 bank-year observations). Panel fixed effects regression with cluster-robust standard errors is employed. The key findings reveal that reputational risk (deposit growth) has a strong positive effect on ROA, while interest rate risk and financial risk have significant negative effects. Strategic risk (non-interest income ratio) also positively affects ROA. efficiency risk (cost-to-income ratio) is not statistically significant, likely due to measurement limitations. For the field, these findings imply that Ethiopian commercial banks should prioritize financial risk management, asset-liability matching, and reputational capital (customer trust) to improve profitability. Policymakers at the National Bank of Ethiopia should enforce risk-based supervision and mandate repricing gap reporting. Moreover, the study demonstrates that non-interest income diversification is beneficial, challenging the view that it adds unmanaged risk. Future research must develop better efficiency risk proxies and address endogeneity.	en_US
dc.language.iso	en_US	en_US
dc.subject	ACCOUNTING AND FINANCE	en_US
dc.title	Risk Exposure and Financial Performance: An Empirical Analysis of Commercial Banks in Ethiopia	en_US
dc.type	Thesis	en_US