Title:
THE IMPACT OF FINANCIAL INTERMEDIATION ON BANK PERFORMANCE

Authors:
David Kwashie Garr, David Mensah Awadzie, Ghana

Abstract:

This study is about the impact of financial intermediation on bank performance using data from sixteen (16) universal banks in Ghana. The study employed annual time series data from 1996 to 2018. Unit root test was employed utilizing the Augmented Dickey-Fuller (ADF) test to assess the stationarity in the data. Multiple regression analysis was employed to evaluate the influence of the explanatory variables on bank performance. What is unique about this paper is that it is the first of its kind especially concerning the independent variables investigated. Results suggest that bank performance in Ghana is significantly influenced by the operating cost, reserve and bank borrowing rate. Increase in operating cost would enhance bank efficiency, whiles a lower reserve would improve performance and an increase in borrowing rate would increase profitability. The paper's findings are important for central banks, universal banks and policy makers in Government for efficiency and effectiveness.