Abstract:
This study examines how bank-specific factors affect Sri Lankan commercial banks' profitability from 2017 to 2024, with a particular emphasis on developments prior to and following the COVID19 epidemic. Return on equity (ROE) and return on assets (ROA) are used as dependent variables in the analysis to reflect profitability, while bank size, capital adequacy, operational expenses to assets, and loan to assets are used as independent factors. In this study, the internal dynamics of banking performance in a developing economy environment will be evaluated in light of the enormous disruptions caused by the COVID-19 epidemic to global financial systems. Secondary data from Sri Lankan licensed commercial banks' annual reports is used in this quantitative study approach. Diagnostic procedures like multicollinearity and normality tests are used in the study to make sure the statistical results are reliable and robust. To further investigate relationships and differences between the pre- and post-COVID periods, independent sample t-tests, regression analysis, and correlation analysis are used. Higher operational costs are negatively correlated with ROA and ROE, according to the findings, but bank size and loan-to-assets have a beneficial impact on profitability. The complex function of capital sufficiency in financial performance was highlighted by the mixed effects it had, which were beneficial for ROA but negative for ROE. The t-test results showed modest changes in average profitability before and after COVID-19, but no statistically significant differences. According to these results, internal bank attributes still affect
profitability even in the face of outside economic shocks. This study, for the purpose of improving the banking industry's profitability and resilience, particularly in anticipatio of future crises, offers policymakers, bank executives, and stakeholders’ insightful information.
