College of Business and Economics Department of Accounting and Finance Research Proposal

“The Impact of Asset Liability Management on Banks Profitability: A Comparative Study on Ethiopian Commercial Banks”

Prepared by: Samson Abate ID No. GSE/1482/08

Submitted to: Samuel Kifle(Phd.)

In Partial fulfilment of Business Research Methods Course January, 2016

Abstract
Banks’ profitability is of utmost concern in modern economy. Banks are in a business to receive deposits or liabilities and to issue debt securities on the one hand and create or invest in assets on the other hand. Commercial Banks incur costs for their liabilities and earn income from their assets. Thus profitability of banks is directly affected by management of their assets and liabilities. In addition, different market and macroeconomic factors also influence the ability of the banks to make profits. The asset and liability base of banks in developing countries are narrower than their counterparts in developed countries. This study examines how asset and liability management together with external variables such as degree of market concentration and inflation rate impact the profitability of selected commercial banks in Ethiopia. Although impact of the management of banks’ asset and liability on their profitability has been studied by a number of researchers, the issue of banks’ profitability in Ethiopia has received scant attention from the researchers. This study is an attempt to close this gap, to bring the issues of banks’ assets and liability management in Ethiopia squarely into focus for assisting better performance.

Contents

CHAPTER I: INTRODUCTION

1.1 Background of the study 4
1.2 Statement of the Problem 5
1.3 Objectives and Hypothesis of the study 6
1.3.1 General Objective 6
1.3.2 Specific Objectives 6
1.3.3