THE IMPACT OF'II{TEREST RATE SPREAD ON FINANCIAL PERFORMANCE OF THE LISTED COMMERCIAL BAI\KS IN SRILANKA

Abstract

The objective of this study is to examine the impact of the interest rate spread of financial performance on listed commercial bank in Sri Lanka. For this study. the researcher selected 25 listed commercial bank in Sri Lanka. This research is based on secondary data.Datawill be obtained from the CSE's financial reports and r,vebsites for the period 2015-2019. STATA, a regression analysis method used to analyze the impact of variables on data analysis. Retr:rn on Assets (ROA) was considered as proxies for financial performance. The conceptual model is developed based on existing literature. Using the Random Impact Model, the listed commercial bank in Sri Lanka's data study sets were used to investigate the impact of the interest rate spread of financial performance iisted commercial bank in Sri Lanka. The random effect model was selected using the Hausman test results. There is insufficient study in Sri Lanka to identify the impact of interest rate spread on financial performance. This research helps tq fill this gap. Stakeholders and managers will be able to use the results of the study and find out the results of this study so they can make more reliable and effective decisions. The findings of this research show that the interest rate spread of the Bank of Sri Lanka, have a positive impact on the return on assets and the type of ownership has a negative impact on the return on assets. The findings o1'this study help decision makers to understand the importance of interest rate a key factor that can increase the ability of firms to maintain their competitive edge.