Comparison of Financial Performance of State Owned Commercial Banks: A Case Study of Bangladesh

Banking system plays a vital role for the economic development of Bangladesh. It is clear that a poor banking system cannot help for the economic development in a country. The objective of this study was to compare the financial performance of four stateowned commercial banks in Bangladesh based on their financial characteristics and identify the determinants of performance exposed by the financial ratios. Four state-owned commercial banks for the period 2000 to 2010 were financially analyzed. In addition, econometric model (multivariate regression analysis) by formulating a regression model was used to estimate the impact of loan to asset ratio, non-performing loan ratio, credit to deposit ratio and percentage of classified loan on the financial profitability namely return on assets of these banks. The results show that the same bank had different ranks under the different financial ratios. Furthermore, the estimation results reveal that return on assets was significantly influenced by capital adequacy ratio and percentage of classified loan.