IMPACT OF LOAN TO DEPOSIT RATIO ON THE PERFORMANCE OF COMMERCIAL BANKS IN UZBEKISTAN
DOI:
https://doi.org/10.55439/EIT/vol11_iss1/a5Keywords:
banking, loan to deposit ratio, profitability in bankingAbstract
The health of financial system has important role in the country as its failure can disrupt economic development of the country. Recent transformations and reforms in the economic policies of the Republic of Uzbekistan have led to significant changes in the banking sector. Studying the key factors which contribute to the profitability of commercial banks in Uzbekistan is becoming increasingly important. this research paper examines the main determinants of banking profitability in the Republic of Uzbekistan. Panel data for the period between 2017 to 2021 have been employed on 32 commercial banks of Uzbekistan. Empirical conclusions have shown that the profit of the bank is largely determined by specific factors affecting its activities. The regression results have shown that government ownership and operating costs have negative and statistically significant relationship with the profitability of a bank. Loan to deposit ratio (LDR) has significant positive impact on return on equity (ROE).
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