Evaluation Of the Effects Of Macroeconomic Variables On Banking's Profitability: A Case Study Of The Commercial Bank Standard Bank In The Period From 2004 To 2020

Abstract

The scarcity of research and literature that study in detail the effects and magnitude of the effects of macroeconomic variables on the profitability of banks at the national level through the econometric method causes the lack of adequate tools for assertive decision-making at the level of bank decision makers, that is why this research appears to become a tool that will contribute to the range of existing literature that enables a greater understanding of the effects of macroeconomic variables on bank profitability. Based on the inductive method, quantitative research to obtain the magnitude using multiple linear regression models (MRLM), exploratory, bibliographical, documentary research and case study of the bank in question. To collect the data, documental analysis was used in which STATA was used for the elaboration of models. It is concluded that for the ROAA Model, the exchange rate variable has a statistically significant positive effect, which means that, the increase of the exchange rate in a monetary unit promotes the increase of ROAA in 0.048%. For the ROAE Model, the unemployment rate was the one that had a statistically significant negative effect on the ROAE, which means that, the increase of one percentage unit in the unemployment rate, promotes a reduction of 52.4% of ROAE. Therefore, exchange rate policies that lead to the devaluation of the domestic currency can promote increased bank profitability.