Abstract:
The purpose of this study was to provide an insight on corporate governance and important
factors for well-functioning of corporate commercial banks. This study aimed to identify the
effect of governance on bank profitability of corporate commercial banks in the case of
Ethiopia. Ten year data from seven corporate commercial banks for the period 2010-2019 and
survey data from customers were used to study the profitability of seven private Ethiopian
corporate commercial banks. The survey data were collected through questionnaires and
secondary data were extracted from banks archive. The questionnaire were physically
distributed to 265 Wogagen, Dashen, Awash, Abyssinia, United, Oromia Cooperative, and NIB
Banks’ customers with response rate of 97.4% and banks’ branch managers also interviewed
from these seven banks. Descriptive statistics analysis tools such as frequency, and
percentages were used for qualitative data obtained using questionnaire from customers and
the inferential statistics methods multiple linear regression model and correlation analysis
were used for quantitative data to present and explore the overall characteristics of the data
and to extract important information from the data. Specifically, the linear was performed to
see the effect of different factors on the profitability of the banks. Audit committee member,
number of times the board conduct meeting in a year and total number of board directors had
significant effect on the profitability of the bank as analysis for Abyssinia bank showed
whereas boards committee member, actual number of boards and number of times the board
conduct meeting per a year had significant effect on the profitability of Awash International
bank. The corporate commercial bank management must give special attention all significant
factors in both logistic and linear regression model results in order to get maximum profit.
