Analysis of Profitability Indicators of the small Private Banking in Ecuador from the dollarization

Abstract

The aim of this research has been to analyze the information extracted from official resources about accounts, financial ratios of small private banking and macroeconomic ratios from Ecuador since the United States Dollar was adopted as national currency. The purpose is to determine what factors have major relationship with the economic and financial profitability of small banks. Through, a Panel Data Analysis Fixed and Random Effects in gretl using Ordinary least squares, it was obtained that term deposits, the Gross Loan Portfolio (GLP), the indebtedness and the financial intermediation levels are internal factors with major influence on small banks profitability. Between the macroeconomic factors associated with the profitability rates are the Inflation Index and the annual Gross Domestic Product (GDP).