Abstract:
Sri Lanka, commercial banks play the important role of the operation on the economy
and it provides financial infrastructure for economic development. Therefore,
studying the determinants of bank profitability is vital to the economy. The study
conducted to find out the effect of bank specific determinants on profitability in
Commercial Banks in Sri Lanka. To test this objective, the bank Profitability was
used as main dependent variable; it included Return on Equity. Moreover, Bank
Specific determinants was utilized as Independent variable, it consists with Operation
efficiency, Capital adequacy, Credit risk, Liquidity risk, Bank size, Bank Age and
Deposit ratio. The study used the secondary data and that obtained from randomly
selected ten (10) domestic commercial Banks’ annual reports for the period 2008-
2017. The descriptive analysis, Correlation analysis and Multiple Regression
Analysis are used as data analysis methods. The findings revealed that Credit Risk
and Liquidity Risk have significant impact on bank profitability whereas bank
profitability measures in terms of Return on Equity. Furthermore, the study
recommended that the banks should spend much time to maintain Credit Risk and
Liquidity Risk as smoothly
