Abstract:
The purpose of the paper is to investigate how the impact of deposit structure on
profitability of commercial banks in Sri Lanka. Choose their deposit structures to
identify the structural deposits-based behavior of banking customers. The authors
collected the data from the annual reports of 10 commercial banks in Sri Lanka during
2010-2019. Person's correlation analysis, simple regression analysis and multiple
regression analysis conducted to examine the relationship between deposit structure
and profitability using rectum on assets. Analysis results indicate there is a informant
impact of deposit structure on profitability of commercial banks in Sri Lanka.
Moreover, result of regression analysis indicate that size of deposit schemes has a
negative significant relationship with profitability, the results of regression analysis
indicate that type of deposit schemes has a positive insignificant relationship with
profitability and the result of regression analysis indicate that number of deposit
products has negative insignificant relationship with profitability. Results of this study
provide support to bank managers to understand the customer demand relates to the
deposit structures and interest rates which customers are concerned more. This is the
uncommon study that investigates the impact of deposit structure on profitability of
commercial banks Sri Lanka. Moreover, findings of this study lay some foundation
upon which a more detail analysis of deposit structure and it importance of banks
could be based.
