A Study of Relationship between Liquidity and Profitability in Georgian Banking Sector

The following research paper was devoted to identify bank profitability ratio and liquidity ratio trends. Based on the statistical financial data published by National Bank of Georgia, liquidity ratio, net interest margin, Return on Equity and Return on Assets was discussed and trend results was shown. Besides, correlation coefficient analyses and regression analyses was used to investigate relationship between the four variables mentioned above. As the results showed relationship between liquidity ratio and banks profitability is positively correlated. Besides, coefficient of determination is valid for net interest margin and liquidity in regression analyses, whereas in other cases coefficient was not valid.