Determinants of bank profitability: empirical research on Lithuanian market

Abstract

The goal of the current paper is to show that the factors that are related to individual customers’ usage of banking services are vital for banks’ profitability. In the current research, profitability is expressed by return on assets, return on equity and net interest margin. The following determinants influencing profitability were determined from the literature: number of cards, number of branches, number of automated teller machines (ATMs), number of point-of-sale (POS) terminals, number of internet banking users, number of mobile banking users, customers trust. It was found that five of them (except the number of cards and number of mobile banking users) have a positive influence on commercial banking sector profitability in Lithuania.