The impact of internal financial factors on operating income of the commercial banks in Jordan

Abstract EN

Commercial banks in Jordan started around seven decades ago.

Since then it has played an important role in financing and contributing to different economies and social sectors in the country in compliance with the Jordanian banking laws.

The paper gets its importance due to the limited studies conducted on the operational income of commercial banks in Jordan.

The aim of the study is to examine and analyze the financial factors that affect the operating income of the banks.

This study is concerned with examining the profitability determinants of Jordanian commercial banks.

So, the main objective of this study is to investigate the influence of financial factors related to bank-specific characteristics such as total expenses, total credits, cash flows, liabilities, and shareholder equity on the operating profits of the banks.

The paper goes further to shed some light on the local competition among the Jordanian commercial banks.

However, this paper used financial analysis ratios and multiple regression models by conducting the financial tests and relationships among the employed variables.

The results of this study reveal that through the suggested independent variables various positive relationships with the operating profits in the banks.

Also, the results reveal that operating profitability does not respond highly to changes in the explanatory variables of the Jordanian commercial banks.