Factors Affecting the Profitability of Banking System in Kyrgyzstan

ABSTRACT: The main goal of this work is to identify the key factors that have a positive effect on the profitability of banks in Kyrgyzstan. In this study, the banks are selected according to their asset sizes. I selected 10 largest banks in Kyrgyzstan. The main factors were chosen according the method of supervisory rating CAMELS. Internal and external factors were considered separately. As internal factors, which are bank-specific factors, wechose the size, liquidity ratio, asset quality ratio and others. As external factors GDP per personin the country was used.In this research, the panel data was used to make the empirical analysis on key profit ability factors of commercial banks in Kyrgyzstan. All data was taken from financial statements that come from official bank’s websites over period of 2006 – 2011. In this study, four significant variables were found. Capital adequacy and management ratios are positively related to profitability determinants. Keywords: Profitability, Kyrgyzstan, Banks, Financial Statement, Panel Data. ……………………………………………………………………………………………………………………………………………………………………………………………………………………