Abstract

The purpose of the research is to examine the effects of foreign banks entry on the operations of domestic banks in Ghana. The study employs panel data analysis to examine the effects of foreign banks entry on the operations of domestic banks in Ghana. Data for the study were drawn from the databases of Ghana Association of Bankers, Ghana Statistical Service and Bank of Ghana over the period from 1997 to 2014. Results of the study reveal that entry of foreign banks is significantly associated with increase in net interest income and return on assets. Among the bank-specific determinant variables, only deposit, liquidity and capital reveal statistically significant association with bank profitability. The research could not include more qualitative factors. Future research could include more qualitative factors, for example, management leadership style with the quantitative factors and test for long run effects. The main value of this paper is the analysis of new empirical evidence on the effect of foreign banks entry on the operations of domestic banks operations.

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