The Relationship between the Macroeconomic Determinants and the Profitability of Jordanian Banking System

Abstract

The goal of this paper is to assess the relationship between the macroeconomic factors and banks’ revenue in the Jordanian banking system. In order to achieve this objective, it is going to analyze seven Jordanian banks’ data for the last seven years (2008 to 2014). Panel data will be used to evaluate this relationship; either bank profitability factor has more effect or macroeconomic factors. Inflation, Interest rate, and GDP will be used as macroeconomic factors, Camels rating as bank specific factors, and ROA, ROE as profitability ratios.