Thesis (M.S.) - Cyprus International University. Institute for Graduate Studies and Research Accounting and Finance Department

The goal of this study was to investigate the effect of full costs on loan pricing decision at the Commercial Banks in Palestine using quantitative research methodology. The date were collected from the annual reports of nine commercial banking institutions listed in the Palestinean Monetary Authority (PMA) for the duration between 2010 and 2018.The data collected encompasses capital, liquidity, fixed costs, and variable costs.Interest revenue is derived from loan's, profit margin, exchange rates, and total loan's. These variables are developed into a panel of nine banking institutions and full costs are calculated by combining variable costs and fixed costs. The data collected are analyzed from data analysis, specifically descriptive statistics, correlation tests, system GMM results. Its diagnosis is determined by the application of the Sargan tests and serial correlation tests (AR1) and (AR2)
The analysis results to answer the three questions of the study it was identified in two-point: First, full costs have a negative and significant impact on the loan's pricing decisions in commercial banking institutions in Palestine. Second, the nature of the bank lending decision taken in Palestine is not completely compatible with banking requirements. The result showed a negative relationship between profit margins, exchange rates, and full costs with the lending rates in the short-run and long-run in the Palestinian banking system. However, the result showed that the relationship between the capital of the bank and the lending rates is positive and important