Determinants of Bank Profitability: Empirical Evidence from Bangladesh

Rahman, Mohammad Morshedur; Hamid, Md. Kowsar; Khan, Md. Abdul Mannan

doi:10.5539/ijbm.v10n8p135

Cited by 103 publications

(138 citation statements)

References 53 publications

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“…One of the factors that effect on the profitability of bank is return on equity (ROE). These studies are supported by researchers [11][12][13][14][15].…”

Section: Literature Reviewsupporting

confidence: 66%

Untitled

2018

JSSH

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This study will analyze the profitability of the local and foreign banks in Malaysia by the internal and macroeconomic perspective using the Pooled OLS Method, Fixed Effect Method and Random Effect Method. The study found out that only 8 variables are significant for the local banks and 6 variables are significant for the foreign banks. The panel data has been used during 2007 until 2016. Inflation Rate and Real Interest are negatively influence the movement of the bank's profitability.

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“…One of the factors that effect on the profitability of bank is return on equity (ROE). These studies are supported by researchers [11][12][13][14][15].…”

Section: Literature Reviewsupporting

confidence: 66%

Untitled

2018

JSSH

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“…Their analysis reflected that the increase in loan to deposit ratio had significant positive influence on the net interest margin of the banks. Rahman et al (2015) argued that capital strength, credit risk, ownership structure, bank size, noninterest income, cost efficiency, off-balance sheet activities and liquidity was potential bank-specific factors Asian Business Review • Volume 6 •Number 3/2016 those determined the return on asset (ROA), return on equity (ROE) and net interest margin (NIM) of the banks in Bangladesh. Lartey et al (2013) investigated seven listed banks in Ghana Stock Exchange for the year 2005-2010 to trace out the relationship between liquidity and profitability of the banks.…”

Section: Objective Of the Studymentioning

confidence: 99%

Relationship between Liquidity Risk and Net Interest Margin of Conventional Banks in Bangladesh

2016

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Net interest margin (NIM) of a bank depends on several firm-specific factors. The aim of the study was to determine the effect of liquidity risk on the profitability indicating variable NIM of the conventional banks in Bangladesh. Seven banks were analyzed using the annual reports of the banks for the period of 2011 to 2015. Researchers applied descriptive statistics, correlation, and regression analysis to find out the results. The findings of the study provided evidence that cash to asset (CA) ratio had a negative relationship with NIM but a loan to asset (LA) ratio had a positive effect on the NIM. There was also a significant positive relationship between NIM and loan to deposit (LD) ratio. From the regression analysis it was clear that the LD, CA, and LA were able to explain the changes of NIM of the banks. JEL Classifications: G 21

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“…According to Obamuyi (2013), the return on assets (ROA) is a financial ratio used to measure the relationship of earnings to total assets. The ROA is preferred to the use of return on equity (ROE) or net interest margin because it assesses how efficiently the banks manages its revenues and expenses from operations, and also reflects the ability of the management to generate profits by using the available financial and real assets (Obamuyi, 2013;Jahan, 2012). Also the ROA as a measurement for bank profitability shows bank management's efficiency in managing its capitals to acquire assets and make earnings from it (Jamal & Karim, 2012).…”

Section: Dependent Variablementioning

confidence: 99%

Determinants of Bank Profitability in Ghana: New Evidence

Anarfi

Abakah

Boateng

2016

AJFA

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This study examines the determinants of profitability in the Ghanaian Banking Industry for an eight (8) year period of 2007 to 2014. Using a sample from 9 local banks and 12 foreign banks in Ghana, the study combines bank-specific determinants and macroeconomic variables to access bank profitability with Return on Assets (ROA) as the dependent variable. The Hausman specification test was performed on a panel regression to determine the appropriate model for this study. The estimation results shows that, bank SIZE and DEPOSITS are not significant and does not impact profitability. However, LOANS, CAPITAL and OVERHEADS were found to be significant and impacts on profitability. The study concludes that banks in Ghana should be technological in their operations to reduce staff cost since the OVERHEAD was highly significant and impacts negatively on ROA.

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Determinants of Bank Profitability: Empirical Evidence from Bangladesh

Cited by 103 publications

References 53 publications

Untitled

Untitled

Relationship between Liquidity Risk and Net Interest Margin of Conventional Banks in Bangladesh

Determinants of Bank Profitability in Ghana: New Evidence

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