Abstract

It has been argued since long time that private ownership of firms leads to better firm performance. Knowledge of the relationship of performance and ownership is assumed to have significance importance. This paper is an empirical analysis on the impact of ownership structure on the performance of Ethiopian commercial banks. We examined whether the ownership structure of banks significantly impinges on bank performance. We used eight Ethiopian commercial banks from 2001 to 2008 period. We have employed both parametric and nonparametric tests of differences among public and private sector banks. Results revealed that private sector banks had better profitability, asset quality and capital adequacy performance and public sector banks were better in cost management measures. In terms of liquidity, no difference was observed between the private and public sector banks.

Key words: Banking, financial performance, ownership, Ethiopia.