The Determinants of Bank Profitability: Internal Factors

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ACKNOWLEDGEMENT

I would first like to express my gratitude for my research supervisor, colleagues, friends and family whose immense and constant support has been a source of continuous guidance and inspiration.

DECLARATION

I [type your full first names & surname here], declare that the following dissertation/thesis and its entire content has been an individual, unaided effort and has not been submitted or published before. Furthermore, it reflects my opinion and take on the topic and is does not represent the opinion of the University.

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ABSTRACT

In the following proposed study, we will analyze and examine the various factors which determine the bank profitability in United States. The primary focus of the study is to analyze and examine the various determinants which have influence on the profitability of the bank. The research study will also examine the role of banking sector in the financial market and in the economic development of the nation. The proposed study will also analyze the concept of profitability and the various profitability measures applied by the bank. The research study will adopt the secondary research and 300 banks from United States will be analyzed for the purpose of data collection. In the end the research study also provides adequate recommendations and suggestions for future research and also provides implications for the study.

Table of Contents

ACKNOWLEDGEMENT2

ABSTRACT4

CHAPTER 01: INTRODUCTION9

1.1.Outline of the study9

1.2.Background of the study9

1.3.Rationale of the study10

1.4.Research aims and objectives12

1.5.Research questions12

1.6.Limitations of the study13

1.7.Time scale13

CHAPTER 02: LITERATURE REVIEW16

2.1Bank16

2.2Evolution of banking17

2.3Role of banks in financial market18

2.4Regulations of banks20

2.1Objectives of banks regulations21

2.5Global banking industry21

2.6United States banking industry23

2.7Profit25

2.8Profitability26

2.9Profitability of the bank27

2.10Profitability measures of the banks28

2.11Internal determinants of bank profitability29

CHAPTER 03: METHODOLOGY31

3.1Overview of qualitative and quantitative research31

3.2Research design33

3.3Secondary research33

3.4Research method34

3.5Qualitative research35

3.6Steps in qualitative research design36

3.7Literature search37

3.8Data analysis method37

3.9Validity37

3.10Reliability38

3.11Ethical considerations39

CHAPTER 04: DISCUSSION AND ANALYSIS41

4.1Overview of the global banking industry41

4.2Recent developments in international banking industry43

4.3History and patterns of United States banking industry45

4.4Signifucance of Profitability46

4.5Bank profitability48

4.6Profitability measures of banks48

4.7Tools to measure banks profitability50

4.7.1KPI index51

4.7.2Return on Equity Indicator51

4.7.3Return on assets indicator52

4.7.4Leverage multiplier ratio52

4.7.5Book value indicator53

4.8Impact of bank profitability on economy53

4.9Internal determinants of bank profitability57

4.9.1Capital size58

4.9.2Size of deposit liabilities59

4.9.3Size and composition of credit portfolio59

4.9.4Interest rate policy60

4.9.5Labor productivity60

4.9.6State of information technology61

4.9.7Liquidity61

4.9.8Risk level62

4.9.9Management quality62

4.9.10Bank size63

4.9.11Expenses management63

4.9.12Bank ownership64

4.9.13Structural affiliation64

4.9.14Restructuring65

CHAPTER 05: CONCLUSIONS67

5.1Future aspects69

5.2Managerial implications of the study70

REFERENCES72

CHAPTER 01: INTRODUCTION

Outline of the study

The following thesis proposal is based on the topic “The determinants of Bank Profitability: Internal Factors”. The first chapter of the thesis will demonstrate and provide details on the introduction to the topic which will also highlight the aims and objectives and background of the study. The second chapter of the thesis will provide a detailed review of the literature and previous studies. The literature review will explain and emphasize on the previous research done in the specific field. The chapter of literature review will illustrate and provide information regarding the determinants of Banks profitability in the United States and the internal factors. The third chapter of thesis will explain the methodology of the proposed study. The fourth chapter of the thesis will analyze and examine the findings and discussion ...