Determinants of private commercial banks deposit in Ethiopia

Figures & data

Table 1. Summary of variables measurement and its expected result

Proxy variables	Symbol	Measurement	Expected result
Deposit	DEPO	Natural logarithm of total deposit
Number of bank branches	NOBRA	Number Of Branches At The End Of theYear	+
Deposit Interest Rate	ADIR	Average Deposit Interest Rate Of The Year	+
Loan To Deposit Ratio	LTDR	Total Loans and Advances/Total deposit	+
Profitability	PROF	ROA = net income after tax/total asset	+
Economic growth	GDP	Measured by Real GDP growth rate of Ethiopia	+
Individual foreign remittance growth	IFRGR	Foreign Remittance growth rate	-
Unemployment rate	UNER	Annual unemployment rate	-

Source: Developed by researchers (2020)

Table 2. Descriptive statistics results and discussion

Variable	Obs.	Mean	Std. Dev.	Min	Max
DEPO	108	8.233624	1.436593	4.08255	10.8273
LTDR	108	.7150974	.1487637	.48847	1.15789
NBBR	108	68.15741	64.49765	5	313
DIR	108	.0433,333	.0116008	.03	.07
PROF	108	.0274,747	.0093179	.002	.047
INFRG	108	.2817222	.1799918	.021	.7
GDP	108	.0883889	.0388067	−.021	.126
UNER	108	.2018333	.0405895	.163	.269

Source: Stata output (2020)

As shown in the Table 2, the descriptive statistics of the study, there are 108 observations and balanced data collected from six private commercial banks over the period 2000 to 2017. As shown in the Table 4.6, the descriptive statistics of the study, there are 108 observations and balanced data collected from six private commercial banks over the period 2000 to 2017. The mean for natural logarithm of total deposits of private commercial banks is 8.233624percent, and the standard deviation was 1.436593 percent with a minimum of 4.0855 percent, and a maximum of 10.8273 percent. The maximum deposit is recorded by nib international bank in the year 2016 and the minimum deposit is recorded by Dashen bank after its establishment in 2002. Depend on minimum and maximum values it can be concluded that the commercial bank deposit fluctuates between 4.0855 and 10.8273 respectively. The standard deviation also stated that there is the variation of deposit amount among sampled private commercial banks during the study period (2000-2017).As shown in the Table 4.6, the descriptive statistics of the study, there are 108 observations and balanced data collected from six private commercial banks over the period 2000 to 2017. The mean for natural logarithm of total deposits of private commercial banks is 8.233624percent, and the standard deviation was 1.436593 percent with a minimum of 4.0855 percent, and a maximum of 10.8273 percent. The maximum deposit is recorded by nib international bank in the year 2016 and the minimum deposit is recorded by Dashen bank after its establishment in 2002. Depend on minimum and maximum values it can be concluded that the commercial bank deposit fluctuates between 4.0855 and 10.8273 respectively. The standard deviation also stated that there is the variation of deposit amount among sampled private commercial banks during the study period (2000-2017).

Table 3. Correlation matrix of dependent and explanatory variables

	DEPO	LTDR	NOBBR	DIR	PROF	INFRG	GDP	UNER
DEPO	1
LTDR	−0.5874	1
NOBBR	0.6939	−0.4404	1
DIR	0.1072	−0.1697	0.3147	1
PROF	0.2412	−0.1818	0.0792	−0.0641	1
INFRG	−0.4206	0.4768	−0.4533	−0.1115	−0.1434	1
GDP	0.4925	−0.2808	0.2335	−0.0216	0.6022	−0.0633	1
UNER	−0.7091	0.4337	−0.5494	0.0071	−0.5621	0.2629	−0.6595	1

Source: Stata output (2020)

Table 4. Regression result

Random-effects GLS regression Number of obs = 108
Group variable: code Number of groups = 6
R-sq: within = 0.7263 Obs per group: min = 18
Between = 0.5604 avg = 18.0
Overall = 0.7137 max = 18
Wald chi2(7) = 261.05
corr(u_i, X) = 0 (assumed) Prob> chi2 = 0.0000
DEPO | Coef.	Std. Err.	Z	P>|Z|	[95% Conf. Interval]
LTDR | -1.998126	0.6422379	-3.11	0.002*	-3.25689 -.7393633
NOBB | .0070043.	17915	3.91	0.000*	.003493 .0105155
DIR | -5.216579	7.039007	-0.74	0.459	-19.01278 8.579621
PROF | -28.5124	11.772	-2.42	0.015 **	-51.58509 -5.439709
INFRG | -.7648422	0.5177668	-1.48	0.14	-1.779646 .2499621
GDP | 7.803967	2.809382	2.78	0.005 *	2.297679 13.31025
UNER | -13.66136	3.353309	-4.07	0.000*	-20.23372 -7.088995
_cons | 12.47751	1.040962	11.99	0.000	10.43727 14.51776

*& ** denotes significance at 1% and 5% level respectively.

Source: Stata output (2020).