Abstract:
The main objective of this study was to identify the determinants of commercial banks deposit
in Ethiopia. The data covered the period from 2002-2016 for the sample of seven commercial
banks in Ethiopia since the data is secondary in nature, the quantitative approach to
research was used. Besides Hausman test was employed. Under this study, both internal and
external factors were included. The internal factors used in this study include loan to deposit
ratio, loan loss provision, capital adequacy, profitability, and branch expansion whereas
inflation rate was from the external factor. This study runs an unneeded random effects test
using Hausman specification test. Hence based on the result fixed effect model was adopted.
The data were collected from the commercial banks’ financial statements and national bank
of Ethiopia, Both internal and external variables were analyzed by employing the balanced
panel fixed effect regression model and the result of the study revealed that loan loss
provision and loan to deposit ratio have negative and statistically significant impacts on
deposit of Ethiopian commercial banks while profitability, capital adequacy ratio and branch
expansion have positive and statistically significant impact on deposit.
