The interest rate on credit facilities and their impact on the profitability of Jordanian commercial banks : analytical study for the period from 2007 to 2016

This study aims at identifying the interest rate granted on credit facilities and its impact on the profitability of Jordanian commercial banks within the period from 2007 to 2016.The study relied on both return on assets and return on equity for the goal of the variable representation of profitability .As for the independent variable, it was represented by the interest rate granted on credit facilities. In order to remove any abnormalities that may occur during the analysis process, the study adopted a control variable represented by a logarithmic function of bank size. The study found that there is a positive effect that is statistically significant for the interest rate granted on credit facilities on the profitability of commercial banks in Jordan. The study recommends maintaining the interest rate granted on credit facilities, since it had a positive effect on the profitability of commercial banks while activating the movement of deposits with commercial banks as the main link in financing the activities of the bank.