Impact of Financial Leverage and Return on Investment on the Profitability of Jordanian Commercial Banks

Abstract This Study aimed to analyzes the impact of Financial Leverage and Return on Investment on Profitability of Jordanian Commercial Banks during the Period (1995-2020), the rate of return on assets was used to measure the profitability of banks. The study sample consisted of (13) Jordanian commercial banks listed on the Amman Stock Exchange. This Study used random effect model .. The results show a negative impact of the ratio of financial leverage on the profitability of Jordanian commercial banks as the higher the ratio of financial leverage, the lower the profitability of the banks. and no impact of return on investment on the profitability of Jordanian commercial banks ,This study recommended the necessity of directing Jordanian commercial banks to financing by increasing capital and using retained earnings, and not to rely on debt financing (financial leverage) because of the negative effect of financial leverage on profitability. Key Word : financial leverage , Return on Investment profitability , random effect