Internal Factors Influencing the Profitability of Commercial Banks in Bangladesh
Journal: International Journal of Economics and Financial Research (Vol.6, No. 7)Publication Date: 2020-07-20
Authors : Zakir Hosen;
Page : 192-200
Keywords : Profitability; Commercial banks; Internal factors; Stakeholders.;
Abstract
The profitability of commercial banks is influenced by a number of internal and external factors. This paper attempts to identify the internal factors which significantly influence the profitability of commercial banks in Bangladesh. In this study, profitability is measured by ROA and ROE which may be significantly influenced by the internal factors such as IRS, NIM, CAR, CR, DG, LD, CTI and SIZE of the bank. Data are collected from published annual reports during 2014--2018 of 23 commercial banks. Using simple regression model, it is found that CR has significant effect on the profitability and CAR has significant influence on ROA only. In addition to this, DG has significant effects on PCBs' profitability (ROE only) where as IRS and CTI have significant influence on profitability (ROA only) of ICBs. Further, none of these variables have significant effects on the profitability of SCBs but CAR and CR are correlated with profitability (ROA only) and the causes may be the nature of services provided by SCBs to its clients. The internal policy makers should manage the influential internal factors of the banks in order to increase their profitability so that they can meet stakeholders' expectations.
Other Latest Articles
- Monetary Policy and Private Sector Credit Interaction in Ghana
- Predicting Intraday Prices in the Frontier Stock Market of Romania Using Machine Learning Algorithms
- An Economic Analysis of Efficiency and Equality Combining Epistemological True with Axiological Good Through Microeconomics to Macroeconomics
- Understanding Agricultural Productivity Growth in Sub-Saharan Africa: An Analysis of the Nigerian Economy
Last modified: 2020-08-18 20:12:42