Commercial Banks In Ethiopia Research Articles

The Impact of Relationship Marketing on Customer Loyalty in Banking Industry, the Case of Commercial Bank Branches in Dessie Town

This study is aimed to explore the impact of relationship marketing dimensions (trust, commitment, conflict handling, and empathy) on customer loyalty, by focusing on the commercial Bank of Ethiopia in Dessie town. A theoretical framework was used as a guideline to test the relationships between relationship marketing dimensions and customer loyalty. A quantitative method which is cross-sectional with deductive approach is applied in this study. In order to gather data, a self-administered questionnaire is designed and was randomly given to the customers of commercial Bank of Ethiopia in Dessie town. Semi- structured interview questions are prepared to get information from the organization which is analyzed qualitatively. The finding of the study shows that relationship marketing dimensions have impact on customer loyalty. All the independent variables are positively and directly related to customer loyalty particularly in commercial Bank of Ethiopia in Dessie town and in general in banking industry. The relationship between relationship marketing and customer loyalty is significant. Therefore, banks should make the whole system on work with customers, and also they are expected to invest more on attracting new customers and retaining the existed ones with regard to relationship marketing to increase customer loyalty. Keywords: Relationship Marketing, Trust, Commitment, Conflict Handling, Empathy, and Customer Loyalty. DOI: 10.7176/JMCR/80-01 Publication date: July 31 st 2021

Effect of Branch Expansion on Cost Efficiency of Ethiopian Commercial BANKS. (Stochastic Cost frontier Approach)

Banks are a vital parts of a nation’s economy that catalyzed Economic growth through facilitate spending and investment in the economy.Bank institutionis one and the top from the major financial institutions in Ethiopia.The number of all branches of the industry including public banks increased from year to year aggressively.Thus, the overall objective of this study was to investigate effect of branch expansion on cot efficiency Ethiopian commercial banks.Accordingly, from the population, Commercial banks operating in the country a total of 18, among these, 2 public and 16 private commercial banks (a total of 14 commercial banks) were included in the study period 2010/11-2018/19 based on non-probability, purposefully sampling method. The research used theprice of labor, prices of capital,Number of branches, annual inflation rate, real GDP growth, Total loan output, management performances, market share, capital adequacy ratio,liquidity risk, prices of deposit and total securities variables to measure cost efficiency. To this end, the study used secondary data from the NBE, balance sheets and income statements of individual commercial banks obtained from the period from to 2010/11 to 2018/9. Then nine years’ panel data of bank levelvariables has been collected and analyzed using stochastic cost frontier regression analysis. As a resultthe researcher concluded that stochastic frontier model as appropriate to represent inefficient operation among the commercial banks of Ethiopia .The Ethiopian commercial banks expanded their branches throughout the country’s territory; most of the bank branches were opened.Despite the various challenges, banks preferred to go ahead with its plan to open more branches to reach customers. However their cost efficiency had been decreased as of aggressively opened branches in the study years.Accordingly the analysis result Zemen bank was the most cost efficiency and become the best practiced bank and CBE the most inefficiency bank and in reverses also characterizes in branch expansion profile.The researcher recommended thatEthiopianbanking institutions should continue to innovate so as to reduce their cost inefficiencies. Moreover, NBE and government stand towards policy that forbids foreign banks entry, the Reserve required ratio amount, and competition environment and policy in opening branches must revised. Keywords: Branch expansion, cost efficiency, Ethiopian commercial banks DOI: 10.7176/RJFA/12-9-04 Publication date: May 31 st 2021

CAPITAL STRUCTURE AS DETERMINANT OF FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN ETHIOPIA (A CASE STUDY ON PRIVATE BANKS IN ETHIOPIA)

A lot of studies have actually been done by numerous researchers both in developed and developing countries such as Ethiopia to ascertain the empirical relationship existing between capital structure and firm performance with varying samples and period as well as application of several and divergent statistical estimation. This study is based on the identification of the impact that capital structure have on the financial performance of commercial banks in Ethiopia. In this regard, secondary data is collected from varied sources especially annual reports of the private commercial banks in Ethiopia. The literature review is done in the report, and it is identified operating, and the capital structure heavily affects net profit. Apart from this, return on equity, asset and capitals employed also affected by the capital structure of the banks. Regression analysis and descriptive analysis tools are used to analyse the data that is related to the sixteenprivate commercial banks in Ethiopia. On analysis of data, it is identified that operating and net profit is heavily affected by the capital structure. However, in the case of return on asset, return on equity, and return on capital employed, such kind of relationship is not observed. Thus, it is concluded on the basis of entire work that capital structure have the huge impact on the operating and net profit, but it does not put any large impact on the return on asset, return on equity and return on capital employed. The study recommended that banks follow a specific policy, in order to maintain a balance in the capital structure. It is also recommended that managers must keep a keen eye on the changes that are taking place in the capital structure.

Exploring the relationship between Job autonomy and employee engagement in turbulent times

This study aims to develop and test a holistic model that depicts and examines the relationships among job autonomy, its drivers, as well as autonomous motivation and influence employee engagement. This research is among the first works to deal with such a complex framework that considers the interrelationships among numerous constructs and their effects on employee engagement. A questionnaire was designed to measure the influence of Job autonomy and its drivers on employee engagement while taking into consideration the impact of turbulent times and organizational commitment on these relationships. Data collected from a sample of 317 respondents working in Ethiopian commercial banks were used to test the proposed relationships. The relationships were analyzed using partial least squares structural equation modeling (PLS-SEM) using the Smart PLS 3 software and SPSS version 26. PLS is a well-established technique for estimating path coefficients in structural models and has been widely used in a number of research studies. The proposed model proved to be fit. The findings of this study suggest that creating job autonomy and assuring autonomous motivation, may help companies gain employee engagement and enhance their performance. The adoption and implementation of such activities are driven by method, criteria, and scheduling autonomy. The successful implementation of these practices requires considering the level of turbulent environment and organizational tenure. The hypotheses were supported, and implications were discussed

Effects of Core Banking System on Customer Satisfaction in Commercial Bank of Ethiopia

The use of core banking System in the various banks is drastically changing the way banking activities are being organized. Almost all banks in Ethiopia are in the process of transforming their banking systems to the modern technology in which they can offer efficient and globally competent services to their customers and get customers satisfaction in return. This study aimed to assess the effects of core banking system on customer satisfaction in commercial bank of Ethiopia. Stratified and convenient sampling techniques were used in the selection of each respondent from the commercial bank of Ethiopia. Conveniently 400 customers were selected and structured questionnaire and interview was used to collect relevant data for the research. The data gathered through the questionnaire was analyzed by using Statistical Package for Social Science (SPSS). The result of the study indicated that core banking information technology system indeed has a positive significance impact on customer satisfaction of commercial bank of Ethiopia. The Multiple linear regression analysis also showed a positive coefficient and adjusted R 2 was 89.1%, which simply mean that there is significant and strong positive relationship between core banking system and customers’ satisfaction. In general, core banking Information Technology system has positively impacted on customer satisfaction of commercial bank of Ethiopia. Finally, it’s suggested that commercial banks in Ethiopia needs to continue to explore and implement sustainable business linkages and collaborations with core banking system. Keywords: Core banking system, customer satisfaction, Commercial Bank of Ethiopia, electronic service quality, electronic recovery service quality DOI: 10.7176/IKM/11-2-02 Publication date: March 31 st 2021

Effects of automated teller machine service on client satisfaction in Commercial Bank of Ethiopia

This study was examined effects of automated teller machine (ATM) service quality on client satisfaction within the Commercial Bank of Ethiopia (CBE). During this study, the convenience sampling technique was employed. The study used primary and secondary data sources. Both quantitative and qualitative data types were collected. Data were analyzed by using five-point Likert scale and Econometric methods. Multinomial and ordered logit model was used to analyze the effect of service quality of ATM service on client satisfaction. The mean Likert scale result indicated that the respondents' attitude towards tangibles, reliability, responsiveness, assurance and empathy fall on 2.77, 2.98, 2.58, 3.02 & 3.23, respectively. The econometric result confirmed positive relationship between tangibles, reliability, responsiveness, empathy and assurance, and client satisfaction. Based on the finding of this study providing reliable network, educating customers on ATM usage, improving the security of ATM usage, increasing the number of ATMs, and increasing the amount of money withdrawn was recommended.

An Empirical Analysis of Productivity Changes in the Ethiopian Commercial Banks: Using DEA- Based Malmquist Productivity Index Approach

The rationale of this paper is to measure the productivity change of commercial banks in Ethiopia based on DEA-based Malmquist productivity index approach. For this purpose, this study employed a balanced panel data of eight commercial banks operating from 2006 to 2017. The result shows that the banks under study were found to have reported a slight productivity progress of 0.4% over the whole study period. The productivity improvement is accredited to the technological progress (0.9%) rather than the efficiency loss (0.5%). Meanwhile, the finding suggests that the decline in the technical efficiency of the banks was caused both by pure technical efficiency and scale efficiency. Alternatively, the finding of the study indicates that the productivity performance of all the banks under study, with the exception of AIB and CBE, remain almost constant in spite of their size during the period. AIB and CBE have exhibit an average productivity progress of 2% and 1.4% respectively during the study period. In the study period, AIB was found to be the most inefficient (2.4%) and the most productive one (2%) comparing to other banks in the study due to retrogress in scale efficiency change (2.1%) as well as technical progress (4.5%) in that order. Further, the paper suggests that the productivity performance of the banks under study was not significantly different in the period. So, the banks have to move forwards their technology to increase productivity more and more, while improving the resource utilization efficiency by up grading their managerial practices and scale operations (optimum size)

Handling of Customers Satisfaction and Assessment of Service Qualities on Commercial Bark of Ethiopia in Addis Ababa at East District

Banking sector in Ethiopia is dominant and it is a dense competent area. Due to this the bank managements tend to continually found the strategies that enables them to be competent in this dense competition. These strategies often focus on handling of customers satisfaction to be strongly compete and pooling more customers. Because, service quality is relevant to keep up their competitive advantage and improve customer satisfaction. So, this study examine the handling of customers satisfaction and assessment of service qualities on Commercial Bank of Ethiopia (CBE) in Addis Ababa at East District by applying SERVQUAL model. This study used convenient and random sampling technique to select the sample respondents and 400 respondents were selected branches of CBE in Addis Ababa at east district. The data sources for this study are primary and secondary data sources. The questionnaires are used as primary data source, which are contained SERVQUAL model and the agreements were measured by applying the five Likert point scales. The correlation result revealed that all dimensions of service quality have a strong and significant statistical relationship with customer satisfaction. The quality of service offered by CBE no meets with the expectation of customer (customers satisfied in somewhat quality service). So, the bank needs to reform service quality for satisfy and attract unsatisfied customers.

The Determinants of Dividend Payout: Evidence from Private Banks in Ethiopia

The main objective of this study was investigating factors that determine the dividend payout of private commercial banks in Ethiopia under the study period covering from 2009 to 2017. A balanced panel data set from national bank of Ethiopia and ten private commercial banks annual report was used and analyzed through fixed effects panel data regression technique. Dividend payout was used as a dependent variable and the independent variables covered under this study were both bank specific (profitability, leverage, liquidity, size and last year dividend payout) and macroeconomic factors (inflation rate, real GDP growth rate and foreign exchange rate). The finding shows that from bank specific factor; profitability, liquidity, bank size and last year dividend payout have statistically significant positive effect on dividend payout while leverage shows insignificant positive effect for dividend payout. From macroeconomic variables inflation rate have a positive effect, but the real GDP growth rate, and foreign exchange rate have a negative effect and foreign exchange rate is the only significant macroeconomic factor for dividend payout.The results of this study have delivered some insights on the effects of both bank specific and macroeconomic factor for dividend payout of private commercial banks in Ethiopia and managements and board of directors of those banks need to consider these variables while designing their dividend payout. In addition, government body specially financial sector should have to consider the effct of macroeconomic variables on dividend payout when they are making a policy about macroeconomic issues. Keywords : Commercial Banks, Bank Specific determinant, dividend payout and macroeconomic determinants. DOI: 10.7176/RJFA/12-3-03 Publication date: February 28 th 2021

The Cyclicality of Loan Loss Provision and Income Smoothing Behavior of Commercial Banks Pre and Post IFRS: Evidence from Ethiopia

Loan loss provision is the significant accrual in the banking sector. This accrual is necessary to lessen the expected credit losses, but in some extent, these accruals would be used for earning management purpose. Thus, the main purpose of this paper is to examine the cyclicality of loan loss provisions and income smoothing behavior of Ethiopian commercial banks in comparison of pre and post IFRS. Explanatory type of research design applied in this research. The paper used unbalanced panel of Ethiopian commercial banks for the period 2010-2019. In order to examine the income smoothing behavior and the cyclicality loan loss provisioning system, pooled panel data regression model has been used following the appropriate test and the complete specification of the model. The result of this paper revealed that loan loss provision of commercial banks in Ethiopia follows a dynamic provisioning system. There is also an evidence that support the existence of income smoothing behavior after IFRS adoption but not before. Moreover, this paper supports the capital management hypothesis and the result shows that IFRS do not intervene for capital management behavior of Commercial banks. Thus, the paper concludes that IFRS adoption in Ethiopian commercial banks do not enhance the reporting quality of banks. These findings suggest that the regulatory body of commercial banks (National bank of Ethiopia) and the regulatory body (including councils) of financial reporting (Accounting and audit board of Ethiopia) should strictly follow-up the adoption of IFRS in the banking sector. DOI: 10.7176/RJFA/12-3-02 Publication date: February 28 th 2021

Determinants of Bank Credit Growth in Ethiopian Private Commercial Banks

This study is mainly aimed to investigate factor that determine the growth of credit of private commercial bank of Ethiopia by using data for 9 years by Eviews through the use of OLS. Both descriptive and econometric analysis has been applied in order to investigate factors that determine growth of loan in the case of private commercial banks in Ethiopia. As determinants GDP, Inflation, Bank liquidity, population growth rate, unemployment rate and deposit growth were included. The result of the econometric result indicates GDP, inflation, bank liquidity and deposit growth are found to have significant positive impact for the growth of private banks credit. However, population growth rate has a positive but insignificant effects on credit growth, contrarily unemployment rate has a negative and insignificant effect on credit growth of private commercial banks. The study recommends policymakers should control variations in Economic growth and inflation to maintain the stability of credit flows to the different sector. Clearly, these variables are closely linked to monetary policy actions, and the results generally show that macroeconomic stability is vital for the flow of credit in Ethiopia. Keywords: Credit growth, private banks and macro-economic factor DOI: 10.7176/DCS/11-2-03 Publication date: February 28 th 2021

Determinants of Dividend Payout Policy of Commercial Banks: Evidence from Selected Commercial Banks in Ethiopia

The study is about investigation of determinants of dividend payout ratio of commercial banks in Ethiopia over the period 2010-2018. Nine years Panel data was obtained from audited financial statements of 8 selected commercial banks in Ethiopia. The study used six independent variables such as financial leverage, profitability, age of firm, corporate tax rate, operating cash and extent of shares distributed and one dependent variable which is dividend payout ratio. Both descriptive and inferential statistics were used in order to interpret the findings of the study. Random effect regression was used to investigate the impact of determinant factors on the dividend payout policy of commercial banks in Ethiopia. Correlation was also conduct to understand the relationship between dependent and independent variables. The correlation analysis shows that, Return on Equity (ROE), Corporate Tax Rate (CTR), and Number of Shares Distributed (NSD) have Negative relationships with Dividend Payout Ratio (DPO). While the remaining independent variables; Debt Ratio (DR), Age of Firm and Cash to Total Assets Ratio (CTA) have positive relationships with Dividend Payout Ratio (DPO). The key finding of this study shows that, financial leverage is significant variable at 1%, while corporate tax rate, cash balance and extent of shares distributed are significant variables at 10% significant level in determining dividend payout ratio of commercial banks in Ethiopia. on the other hand, profitability and age of firm are not statistically significant variables in determining dividend payout ratio in commercial banks of Ethiopia.

Impact of Board Composition on Financial Performance of Commercial Banks in Ethiopia

The major objective of the present study is to examine the impact of internal and external board composition on financial performance of commercial banks in Ethiopia. The samples selected for the present study are twelve commercial banks based on ten years financial report for the period of 2009-2018. Both primary and secondary data collection methods employed for the study. Primary data for corporate governance (board compassion) which is independent variable and secondary data for bank financial performance Return on Asset (ROA), Return on Equity (ROE), and Net Interest Margin (NIM) dependent variables of the present study. Explanatory type of study with a quantitative approach was employed to analyze the collected data. Both descriptive and econometric analyses are used for the current study. Descriptive analysis includes mean, maximum, minimum, and standard deviation, whereas, econometric model includes correlation and regression analysis. Fixed effect and random effect econometric analysis has been made using Eviews-9 Software. The present study shows that there is a linear relationship between board compassion (independent variable) and commercial banks financial performance as measured by Return on Assets (ROA). From this, the researcher reveals that there is a positive and statistically significant relationship between board composition and Return on Assets (ROA). There is negative and statistically insignificant relationship between board composition and Return on Equity (ROE) of commercial banks in Ethiopia. Board Composition is negatively correlated with Net Interest Margin (NIM) and statistically significant at 5 % level of significant. The present study concludes that the higher the board composition leads to better financial performance as measured by Return on Assets (ROA), but in contrarily the higher the board composition of commercial banks in Ethiopia decreases the financial performance as measured by Return on Equity (ROE) and Net Interest Margin (NIM).

Factors Influencing Deposit Mobilization: A Study on Commercial Bank of Ethiopia

The study had looked at the potential of the country regarding deposit mobilization by taking CBE as evidence. The study used time serious secondary data to be collected from Commercial Bank of Ethiopia data base. The study had found variables that can affect the total deposit of commercial banks. Eight variables are regressed with the dependent variable, i.e. total deposit; these variables include Total Loans and Advances, Total Revenue, Total Expense, liquidity, Total Asset, Consumer Price Index, and Operating Expense. The analysis techniques have been chosen suiting the study’s objectives and nature of variables. All these variables are tested using Eviews 20.0 software VAR model. The result of Johansson co-integration test with lags in level shows in the long run Reserve Requirement and Consumer Price Index are negatively affect the Total Deposit in Commercial Bank of Ethiopia whereas the Total Asset, Total Liability and Total Loans and Advance affect Commercial Bank of Ethiopia`s Deposit positively and all are statically significant. Once the variables are co integrated we used the vector error correction (VECM) to determine the short run coefficient. And In the short run, among the given Determinants of Commercial Bank Deposit only Consumer Price Index and The total Loans and Advance are significant and affect the Deposit in Commercial Bank of Ethiopia negatively. Finally the study had recommended what should be done to mobilize more deposits. Keywords : Income, Expense, Asset, Liability, Reserve, Loan and Consumer price index DOI: 10.7176/JESD/12-1-06 Publication date: January 31 st 2021

Ethical Leadership Practices and Factors Affecting It in South Addis Ababa District Commercial Bank of Ethiopia

The study aimed examining ethical leadership practices and factors affecting ethical leadership practices in Commercial Bank of Ethiopia (CBE). In doing so, the research inspected presence of ethical leadership practices. Based on the correlation between ethical leadership and ethical behaviors such as people orientation, fairness, power sharing, ethical guidance, role clarification, integrity and concern for sustainability are indications of ethical leadership practices in CBE. The study again explored effect of ethical dimension or behaviors on leadership practices of the bank. Quantitative research was employed to collect primary data for the study because it is convenient to reduce bias in collecting and analyzing data and mostly the results of quantitative studies are more valid, reliable and can be generalized for the larger population. The finding of the study indicates that there is moderate level of ethical leadership practices in South Addis Ababa District (SAAD) of CBE. Moreover, it was found that ethical leadership practices have positive relationship with ethical behaviors except the fairness dimension which showed weak correlation with the ethical leadership practices of the bank. It was also, discovered that some ethical behaviors such as integrity has high effect on ethical leadership practices. Hence, South Addis Ababa District in particular and Commercial Bank of Ethiopia in general should work to raise the moderate level of ethical leadership to higher level and it is recommended to follow a strategy which strengthen ethical behaviors practices in the organizational leadership practices. Keywords: Ethical leadership, Ethical leadership scale, Ethical leadership behaviors DOI: 10.7176/EJBM/13-1-01 Publication date: January 31 st 2021

Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks

The purpose of this research is to examine major causes of deposit growth in commercial banks in Ethiopia with explicit inference on industry specific and Macro-Economic variables. The research used secondary data from 2010-2019. Macro-economic factors selected under this study consist of age dependency ratio, unemployment rate, population growth, broad money supply, and Inflation. While bank-specific variables included are branch expansion and bank size. Since the study employed panel data in line with the nature and data of the study ordinary least square method estimation were used subsequently after the necessary diagnostic tests and Hausman test performed to determine the appropriateness of fixed effect. The result of the study indicate branch macroeconomic factors such as bank size, broad money supply, and inflation significant positive effect on deposit growth of commercial banks. Contrarily, Age dependency ratio and population growth have a statistically significant negative effect on deposit growth. The unemployment rate, on the other hand, has been found to have a positive but statistically insignificant relationship. The bank-specific factors indicate the branch expansion has a positive significant association while Bank size has a positive but insignificant relationship with deposit growth of commercial banks. Finally, the study suggests there should be a stable macroeconomic environment that reduces the effect of inflation, money supply, population growth, and from a bank-specific perspective aggressive branch expansion is essential for the growth of deposits in commercial banks in Ethiopia.

Effect of Bank Specific Factors on Profitability of Commercial Banks in Ethiopia

Financial institutions specifically commercial banks play a significant and energetic role for developing an economy of a country. When the banking sector in a country is functioning in an efficient, effective, and disciplined way it leads to bring a rapid growth in the various sectors in the country. Many factors may impact on profitability of commercial banks. Basically, it can be categorized as bank internal factors and bank external factors. This paper tried to investigate the effect of bank specific factors on profitability of selected commercial banks in Ethiopia. The researcher identified return on asset as a dependent variable whereas bank size, capital ratio and management efficiency as an independent variables. For the achievement of the objectives the researcher collected secondary data in the form of annual audited financial statements from eight selected sampled commercial banks to investigate the effect of selected bank specific factors on profitability for six years from 2013 to 2018. In order to select sampled banks from all the total of 17 commercial banks operating, purposive sampling method was employed. This study adopted an explanatory approach by using panel data research design to fulfill the objectives. The collected data have been analyzed using random effect model of panel data analysis. The results of the study shows that capital ratio and management efficiency are positively related with profitability but bank size negatively related with profitability. Bank size significantly negatively affects profitability, capital ratio insignificantly positively affects profitability and management efficiency significantly positively affects profitability of banks. It is concluded that management efficiency is the major factor of profitability from the variables included in the model.

Financial Distress Conditions of Commercial Banks in Ethiopia: An Application of Altman's Z-Score 1993 Model.

Financial Distress Conditions of Commercial Banks in Ethiopia: An Application of Altman's Z-Score 1993 Model.

Assessment of Financial Reporting Qualities of Ethiopian Commercial Banks: A Comparative Study on Private and Public Banks

The main purpose of this study was to assess financial reporting qualities of commercial banks of Ethiopia that incorporated both private and public sectors (17 commercial banks). Mixed research approach was used and quantitative (using questionnaires) and qualitative data (using interview) data’s were taken by using purposive and judgmental sampling design respectively. A questionnaire with five Likert scale for the survey which is mainly used for quantitative part and semi-structured interview guide for the qualitative were used as data collection tools. SPSS version 20 for windows was employed to perform statistical analysis and findings were displayed using tables and pie-charts. In order to investigate the findings, the study tried to assess the qualities of those targeted banks financial report depending on fundamental (relevance and faithfulness) and enhancing (understandability, comparability and timeliness) qualitative characteristics of accounting information. Accordingly, survey results showed that the qualities of financial report of privates sector banks is relatively moderate than the public sectors banks. Recognizing the weakness of both sector banks financial report qualities, the researcher would like to recommend that it’s better if private and public sector banks of Ethiopia shall recognize the above mentioned characteristics of accounting information system for improving their qualities of financial report.

Implementation of International Financial Reporting Standards: Its Practices, Challenges and Prospects: The Case of Commercial Banks in Ethiopia

The aim of this study is to examine challenges, prospects and factors that affect the implementation of International Financial Reporting Standards at the commercial banks in Ethiopia. The study adopted a concurrent mixed research approach. Data were collected through questionnaire and interview. Descriptive and econometric analysis was used for the quantitative data, and data from interview were analysed through narration. Based on the descriptive analysis, all banks have practiced the International Financial Reporting Standards (IFRS) highly. Beside this, the lack of guidance and consulting services, high cost of training and consulting services, the complexity nature of most standards and the shortage of time set by the regulatory bodies are among the most important challenges. The international comparability, transparency and quality of the financial reporting system are among the prospects to implement IFRS. In addition, the result of stepwise multiple regression analysis also reveals that information technology system, attitude and perceived ease of use have highly contributed for the implementation of IFRS at commercial banks in Ethiopia. Based on the findings, the study recommends that the government, commercial banks and other concerned bodies in the country should care for the successful implementation of IFRS.