Relationship between liquidity and profitability of commercial banks in Thailand

Abstract

             This research aims to study relationship between liquidity and profitability of commercial banks using research methodology of the quantitative research. The data is derived from the secondary sources. The population consists 14 commercial banks in Thailand which are 1 bank for retail, 4 foreign subsidiary banks and 11 foreign banks branches so made up of 30 banks. The sample group are those commercial banks registered in Thailand which play an important role to the national economy and also attract investors of 14 banks. The data are acquired from the annual report during 2011-2019 for 9 years as panel data for 126 examples. The study is conducted by using the regression equation of Multiple linear regression and the Ordinary least squares: OLS. The results found that the most commercial banks have good liquidity (average LAD = 25.43%) with ability to repay short-term debts and deposits. The profitability of the most commercial banks is considered low (R2 = 6.47%) and also no relationship between the liquidity of commercial banks and the profitability at significantly level. 05. This research result benefits to stakeholders or related people in finance and banking business in order to improve the operations of commercial banks and also can be applied to the appropriate financial ratios in forecasting liquidity and profitability of banks.