Banking sector is becoming more important over the years as it has a vital role in funding both government and private sectors. In Asia Pacific, banking sectors can be observed from two point of views. On one perspective, banking sectors appear to be strong and growing. On the other hand, closer observation reveals that Asia Pacific commercial banks are having the challenges as mature markets, including slowing growth, thinning margins, and higher capital requirements. In term of macroeconomic situations, banks are facing the gradual adoption of open banking standards in which making more competition and banks will continuously struggle in making more returns.
Based on these issues, the purposes of this research is to explore and analyze variables which influence the profitability of Taiwan commercial banks during the period of 2015 to 2019. The dependent variables or the determinants of bank profitability used in this research are bank size, credit risk, the efficiency of management, equity to asset ratio, and market capitalization. Meanwhile, the independent variables or the proxies of bank profitability are return of equity, return of asset, and net interest margin. The method used in this study is panel data regression and significance test.
The findings of this study have shown that bank size and market capitalization do not have any influence on any proxies of bank profitability. Meanwhile, credit risk, efficiency of management, and inflation are having a significant influence on ROE and ROA, but not to NIM. Surprisingly, both credit risk and efficiency of management are having a positive correlation to ROE and ROA. In term of equity to asset ratio, it is only have a significant influence on ROE.

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