Determinants of commercial bank profitability in Tanzania: the case of national bank of commerce limited

This study investigates the Determinants of Commercial Banks Profitability in Tanzania. The specific objectives of the study were; to identify the determinants of MI mawkwivar. Commercial banks profitability in Tanzania; to measure the elasticities of the determinants of profitability in commercial banks and see whether they are significant and to investigate the performance of commercial banks in Tanzania over time. To answer the research questions, two hypotheses were tested using Ordinary least squares technique from which long run relationship among the variables was established. The results of profitability model suggest that increases in interest on loans and total assets have positive impact on profitability. Number of bank branches, deposits and the introduction of new technology i.e., the use Automated Teller Machines are found to be insignificant in influencing commercial banks profitability. Furthermore, interest margins are found to be significant in explaining profitability in commercial banks. These findings imply that interest on loans, total assets and interest margins play important role in influencing profitability in commercial banks. Furthermore, there is potential for commercial banks to open bank branches in rural areas so as to accommodate majority of Tanzanians who are low income earners. Thus, policies which promote profitability in commercial banks focusing on the above significant variables are highly recommended.