This document analyzes the performance and competitive position of state-owned commercial banks in Bangladesh from 2009-2012. It finds that while these banks have achieved stable growth in deposits, loans, and branches, they have struggled to improve key financial metrics like net profit, returns, and reducing non-performing loans. Trend analysis found positive growth in some areas but negative trends or low correlation for other financial indicators. The study aims to evaluate these banks' performance, conduct competitive analysis, and provide recommendations for improvement. Secondary data is used from annual reports and other sources to analyze metrics and compare the four largest state-owned commercial banks in Bangladesh.
Credit exposure and lending decision quality of private commercial banks in b...Alexander Decker
This document summarizes a research study that examined the level of credit exposure and lending decision quality of local private commercial banks in Bangladesh from 2007-2011. The study used five financial ratios to measure credit performance: non-performing loan to total loan ratio, loan loss reserve to total loan ratio, loan loss reserve to non-performing loan ratio, capital adequacy ratio, and tier 1 capital ratio. An analysis of variance found that the non-performing loan to total loan ratio, loan loss reserve to total loan ratio, and loan loss reserve to non-performing loan ratio differed significantly between conventional and Islamic banks, while the capital adequacy ratio and tier 1 capital ratio did not differ significantly. The study also found an
11.modeling the npa of a midsized indian nationalized bank as a function of a...Alexander Decker
This document discusses modeling the non-performing assets (NPAs) of an Indian nationalized bank as a function of advances. It aims to develop a predictive model for estimating gross and net NPA percentages based solely on advances made. Historical NPA and advance data from the bank from 2000-2010 were analyzed using linear and non-linear regression models in SPSS. Strong correlations were observed between gross/net NPA percentages and advances. A non-linear model provided the best fit for predicting both gross and net NPA percentages from advances. This predictive model could allow banks to estimate NPA levels as loans are disbursed rather than waiting for official NPA figures.
052 om c-dhanapal&gganesan-measuring_operational_efficiency_of (1) (1)Anil Aks
This document summarizes a study that measures the operational efficiency of public sector banks in India. It analyzes factors that influence banks' profitability using regression analysis. The study finds that non-performing assets, total income, total expenses, and net interest margin are significant factors. It also uses data envelopment analysis to benchmark the relative efficiency of 21 public sector banks over 5 years. The results show that return on assets, net interest margin, non-performing loans, cost-to-income ratio, advances to deposits ratio, and capital adequacy ratio influence banks' profitability.
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.
Evaluation of some private commercial banks in bangladesh from performance pe...ijmvsc
Banks operate on a huge scale at the heart of the modern economy and the banking system has become an
integral part in the progress of economic development in Bangladesh. Besides, the banking sector has
made their innovation and efficiency crucial to the economy as it competes in an e-commerce world. The
role of banking system in this situation cannot be denied at all. This report intends to evaluate the
performance of selected private commercial banks in Bangladesh. In the study, best efforts have been put
on evaluating the performance. The growing pattern of branches, employees, deposits, loans and
advances, classified loan, net income and earnings per share of selected private commercial banks has
been considered to make an analysis on the performance evaluation of the selected private commercial
banks. To evaluate the performance, data have been collected from the secondary sources. Then the
collected data have been analyzed. From the analysis, it has been found that all of the selected banks are
in a position to make a sustainable growth in respect of branches, employees, deposits, loans and
advances, classified loan, net income and earnings per share during the period of 2007-2011 with some
fluctuation. Besides the growth pattern, other forms of calculations have been used for every selected
variable and they are trend equation and square of correlation coefficient. Under trend equation analysis,
the variables named branches, employees, deposits and net incomes hold more positive value than the
other variables considered. As the value of the slope always shows the positive number, it is a clear
indication that Bangladesh has a very good prospect in case of private commercial banks
An Impact of Capital Adequacy Ratio on the Profitability of Private Sector Ba...Dr. Amarjeet Singh
Profitability being one of the cardinal principles of bank lending acts as a game changer for the survival and success of private sector banks in India. In order to stay profitable, banks have to capitalise on every penny advanced to yield the expected returns. However, considering the constraints laid down by the Reserve Bank of India, banks have to maintain a minimum capital adequacy ratio, as per the current BASEL III regulations active in India. With the mergers of public sector banks, the challenge has got just tougher for the private sector banks in India. Expansion and Diversification are the key strategies adopted by the key players from the private banking sector, however, with the minimum capital adequacy ratio observed by them, it is necessary to understand its actual impact on the bank’s profitability. This research paper aims to throw light upon the linkage that capital adequacy has with the bank’s profitability. It attempts to establish a relation between the Capital Adequacy Ratio with the Net profits of the bank. For the purpose of this study, data from the past 5 years of the leading private sector banks has been collected, namely, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, AXIS Bank and YES Bank. The collected data has been analysed using Pearson’s Correlation to establish a relation between the CAR Ratio & the bank’s profitability. Hypothesis testing has been further done to study the quantum of proportionate change in the profitability with a change in the CAR Ratio for private sector banks using applicable research tools. The said research tools are applied to achieve the desired results while maintaining the required quantum of accuracy. It also aims to understand the proportionate impact of changes in CAR to the bank’s profitability, which can act as a suggested measure for banks to develop a reliable framework for efficient capital management and increase overall efficiency. The results derived from the data collected and analyzed aim to provide scope for further study on the subject matter.
This document analyzes the financial performance of Islami Bank Bangladesh Limited (IBBL) from 2006 to 2010. It examines various financial ratios to evaluate IBBL's performance, including productivity ratios like deposit per branch and profit per branch, profitability ratios like return on assets and return on equity, asset quality ratios like classified investments to total investments, and solvency ratios. The analysis finds that IBBL has generally increased its performance efficiency over the years based on these ratios. For example, return on assets was highest in 2009, while growth in total credits, deposits per branch, and profit per branch were also positive. However, some ratios like return on equity indicated higher risk. Overall, the study uses financial ratio analysis to assess IB
This document analyzes the performance and competitive position of state-owned commercial banks in Bangladesh from 2009-2012. It finds that while these banks have achieved stable growth in deposits, loans, and branches, they have struggled to improve key financial metrics like net profit, returns, and reducing non-performing loans. Trend analysis found positive growth in some areas but negative trends or low correlation for other financial indicators. The study aims to evaluate these banks' performance, conduct competitive analysis, and provide recommendations for improvement. Secondary data is used from annual reports and other sources to analyze metrics and compare the four largest state-owned commercial banks in Bangladesh.
Credit exposure and lending decision quality of private commercial banks in b...Alexander Decker
This document summarizes a research study that examined the level of credit exposure and lending decision quality of local private commercial banks in Bangladesh from 2007-2011. The study used five financial ratios to measure credit performance: non-performing loan to total loan ratio, loan loss reserve to total loan ratio, loan loss reserve to non-performing loan ratio, capital adequacy ratio, and tier 1 capital ratio. An analysis of variance found that the non-performing loan to total loan ratio, loan loss reserve to total loan ratio, and loan loss reserve to non-performing loan ratio differed significantly between conventional and Islamic banks, while the capital adequacy ratio and tier 1 capital ratio did not differ significantly. The study also found an
11.modeling the npa of a midsized indian nationalized bank as a function of a...Alexander Decker
This document discusses modeling the non-performing assets (NPAs) of an Indian nationalized bank as a function of advances. It aims to develop a predictive model for estimating gross and net NPA percentages based solely on advances made. Historical NPA and advance data from the bank from 2000-2010 were analyzed using linear and non-linear regression models in SPSS. Strong correlations were observed between gross/net NPA percentages and advances. A non-linear model provided the best fit for predicting both gross and net NPA percentages from advances. This predictive model could allow banks to estimate NPA levels as loans are disbursed rather than waiting for official NPA figures.
052 om c-dhanapal&gganesan-measuring_operational_efficiency_of (1) (1)Anil Aks
This document summarizes a study that measures the operational efficiency of public sector banks in India. It analyzes factors that influence banks' profitability using regression analysis. The study finds that non-performing assets, total income, total expenses, and net interest margin are significant factors. It also uses data envelopment analysis to benchmark the relative efficiency of 21 public sector banks over 5 years. The results show that return on assets, net interest margin, non-performing loans, cost-to-income ratio, advances to deposits ratio, and capital adequacy ratio influence banks' profitability.
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.
Evaluation of some private commercial banks in bangladesh from performance pe...ijmvsc
Banks operate on a huge scale at the heart of the modern economy and the banking system has become an
integral part in the progress of economic development in Bangladesh. Besides, the banking sector has
made their innovation and efficiency crucial to the economy as it competes in an e-commerce world. The
role of banking system in this situation cannot be denied at all. This report intends to evaluate the
performance of selected private commercial banks in Bangladesh. In the study, best efforts have been put
on evaluating the performance. The growing pattern of branches, employees, deposits, loans and
advances, classified loan, net income and earnings per share of selected private commercial banks has
been considered to make an analysis on the performance evaluation of the selected private commercial
banks. To evaluate the performance, data have been collected from the secondary sources. Then the
collected data have been analyzed. From the analysis, it has been found that all of the selected banks are
in a position to make a sustainable growth in respect of branches, employees, deposits, loans and
advances, classified loan, net income and earnings per share during the period of 2007-2011 with some
fluctuation. Besides the growth pattern, other forms of calculations have been used for every selected
variable and they are trend equation and square of correlation coefficient. Under trend equation analysis,
the variables named branches, employees, deposits and net incomes hold more positive value than the
other variables considered. As the value of the slope always shows the positive number, it is a clear
indication that Bangladesh has a very good prospect in case of private commercial banks
An Impact of Capital Adequacy Ratio on the Profitability of Private Sector Ba...Dr. Amarjeet Singh
Profitability being one of the cardinal principles of bank lending acts as a game changer for the survival and success of private sector banks in India. In order to stay profitable, banks have to capitalise on every penny advanced to yield the expected returns. However, considering the constraints laid down by the Reserve Bank of India, banks have to maintain a minimum capital adequacy ratio, as per the current BASEL III regulations active in India. With the mergers of public sector banks, the challenge has got just tougher for the private sector banks in India. Expansion and Diversification are the key strategies adopted by the key players from the private banking sector, however, with the minimum capital adequacy ratio observed by them, it is necessary to understand its actual impact on the bank’s profitability. This research paper aims to throw light upon the linkage that capital adequacy has with the bank’s profitability. It attempts to establish a relation between the Capital Adequacy Ratio with the Net profits of the bank. For the purpose of this study, data from the past 5 years of the leading private sector banks has been collected, namely, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, AXIS Bank and YES Bank. The collected data has been analysed using Pearson’s Correlation to establish a relation between the CAR Ratio & the bank’s profitability. Hypothesis testing has been further done to study the quantum of proportionate change in the profitability with a change in the CAR Ratio for private sector banks using applicable research tools. The said research tools are applied to achieve the desired results while maintaining the required quantum of accuracy. It also aims to understand the proportionate impact of changes in CAR to the bank’s profitability, which can act as a suggested measure for banks to develop a reliable framework for efficient capital management and increase overall efficiency. The results derived from the data collected and analyzed aim to provide scope for further study on the subject matter.
This document analyzes the financial performance of Islami Bank Bangladesh Limited (IBBL) from 2006 to 2010. It examines various financial ratios to evaluate IBBL's performance, including productivity ratios like deposit per branch and profit per branch, profitability ratios like return on assets and return on equity, asset quality ratios like classified investments to total investments, and solvency ratios. The analysis finds that IBBL has generally increased its performance efficiency over the years based on these ratios. For example, return on assets was highest in 2009, while growth in total credits, deposits per branch, and profit per branch were also positive. However, some ratios like return on equity indicated higher risk. Overall, the study uses financial ratio analysis to assess IB
A Comparison of Key Determinants on Profitability of India’s Largest Public a...Rajveer Rawlin
The banking sector in India has come under the scanner following some key changes in monetary policy. With
the Reserve bank of India (RBI) raising interest rates to support the falling Indian currency the Rupee, the cost of
funds of banks has increased significantly. This could manifest itself in rising non-performing assets (NPAs) and
declining profitability. The profitability of banks is impacted by both internal and external factors. This paper is
an attempt to compare the key drivers of profits at India’s largest public and private sector banks. Bank specific
metrics and risk factors were important drivers of profits at both banks. Productivity measures were key drivers
of profits at India’s largest public sector bank SBI but had no effect on profits at India’s largest private sector
bank, HDFC bank. Asset usage efficiency measures were key determinants of profitability at HDFC bank but not
at SBI. The single most important determinant of SBI proved to be business per employee, a productivity
measure while advances and bank size which are traditional bank metrics were key drivers of profits at HDFC
bank. Managers at both banks and their share holders thus can look at these drivers to develop a broad
understanding of profitability at the two banks.
Firm level determinants to small and medium sized enterprises’ access to fina...rrpidani
Firm Level Determinants to Small and Medium-Sized Enterprises’ Access to Financing in Indonesia by Rita Pidani and Ishak Balaka. Academy of Taiwan Business Management Review, April 2013, Volume 9, Number 1, pp. 117-126.
This document discusses a study on the effect of capital structure on the profitability of conventional and Islamic banks in Pakistan. The study examines the relationship between capital structure factors like total liabilities to total assets, total equity to total assets, total liabilities to total equities, and bank size with profitability measures like return on equity and return on assets. Annual reports from 5 Islamic banks and 5 conventional banks between 2010-2014 are analyzed using statistical tools like correlation analysis and t-tests. The study aims to compare the capital structure and its impact on profitability between conventional and Islamic banks in Pakistan and help policymakers. Limitations and the thesis structure are also outlined.
The Performance Analysis of Private Conventional Banks: A Case Study of Bangl...IOSR Journals
This study attempts primarily to measure the financial performance of some selected private
commercial banks in Bangladesh for the period 2006-2011 and to identify whether any relationship exists
between a bank’s years of operation and its performance. For this purpose five banks have been selected from
different generations. The financial performances of these banks have been scrutinized from the following four
dimensions: (1) profitability (2) liquidity (3) credit risk and (4) efficiency. The study concluded that there is no
specific relationship between the generation of banks and its performance. The performances of banks are
dependent more on the management’s ability in formulating strategic plans and the efficient implementation of
its strategies. The study findings can be helpful for management of private commercial banks in Bangladesh to
improve their financial performance and formulate policies that will improve their performance. The study also
identified specific areas for each bank to work on which can ensure sustainable growth for these banks
This document provides an overview of public sector undertakings (PSUs) in India. It discusses that PSUs are government-owned companies that play an important role in India's economy. The document then covers several key topics regarding PSUs, including the financial management challenges they face, the role of financial advisors, examples of major PSUs, and reforms around disinvestment and increasing transparency. It analyzes issues like managing risks and growth in the changing banking environment in India. Overall, the document presents an introduction to PSUs and examines their operations, importance, and ongoing development.
A nexus between liquidity & profitability a study of trading companies in sri...Alexander Decker
This document summarizes a study that investigated the relationship between liquidity and profitability of trading companies in Sri Lanka. The study analyzed annual report data from 8 listed trading companies over a 5-year period from 2008 to 2012. Correlation and regression analyses were used to examine the nature and extent of the relationship between liquidity ratios like current ratio and quick ratio and profitability ratios like return on equity and return on assets. The findings suggest there is a significant relationship between liquidity and profitability among the sampled trading companies in Sri Lanka. However, the results may not be generalizable to non-public companies or other sectors. The document provides background on liquidity, profitability, prior studies on the relationship, and the methodology used
EMERGING EQUITY MARKET AND ECONOMIC DEVELOPMENT: BANGLADESH PERSPECTIVERajib Datta
This document summarizes a paper that analyzes the relationship between stock market development and economic growth in Bangladesh. It provides background on Bangladesh's capital markets, noting they are small but growing. It then examines various indicators of the stock market over time, such as market capitalization, liquidity, and foreign investment. While the markets have grown, the growth lacks stability and more work is needed to understand the link between the stock markets and economic growth. The document also reviews the relevant laws and players in Bangladesh's capital markets and their objectives. It describes the scope and methodology of the paper.
CREDIT QUALITY IN INDIAN BANKING :QUANTITATIVE EVALUATIONDinabandhu Bag
This document summarizes a study examining factors that influence credit quality and non-performing loans in Indian banking. The study finds:
1) Both economic factors and bank-specific factors like capital adequacy ratios and credit deposit ratios influence credit quality and non-performing assets.
2) Analyzing data from 2002-2007 for 17 major Indian banks, the study finds higher capital adequacy ratios and credit deposit ratios are associated with lower non-performing loans.
3) Stronger economic growth, as measured by GDP growth, is also associated with lower non-performing loans for banks. The results provide insights into how banks can maintain better credit quality.
Identity Management Reform and Fraud Prevention in the Nigerian Banking IndustryDr. Amarjeet Singh
This paper assesses the effect ofidentity management reform, namely the Bank verification number (BVN) policy on fraud prevention in the Nigerian banking industry. Using secondary data obtained from annual reports of Nigerian Deposit Insurance Corporation (NDIC) from 2011 to 2018, the study employed descriptive method to analyze trend in fraud variables before and after introduction of the policy and independent t-test to test the hypotheses in the study. Findings revealed that there was an initial decrease in number of staff involved and total amount involved in fraud in the two years following BVN introduction, but which showed increases thereafter.A similar trend was revealed in various fraud types with internet banking fraud showing significant increases in frequency of cases. The results from the t-tests revealed that theBVN policy had no significant impact on fraud prevention within the period under study. It was recommended that the banking public be educated on the different types of fraud and how to protect their personal details from getting into wrong hands. There is also the need to beef up security by improving on protocols required to carry out bank transactions particularly in the area of internet banking. It was also suggested that all bank account numbers be linked to the National Identity Number (NIN) immediately in line with proposals made by the Federal Government on identity management.
Institutional credit and the profit efficiency of micro and small scale trade...Alexander Decker
This document summarizes a study on the impact of institutional credit on the profit efficiency of micro and small scale traders in Faisalabad, Pakistan. Data envelopment analysis was used to calculate efficiency scores for 85 traders, with the average technical efficiency being 0.78. Tobit regression then explored factors influencing efficiency. It found that average propensity to consume, interest rate, and number of times credit was taken negatively impacted variable returns to scale technical efficiency. Micro traders were more efficient than small scale traders. Traders using loans for their intended business purposes were more efficient than those using loans for other purposes. The study recommends financial institutions improve screening policies and provide training to traders.
- The document discusses financing of small and medium enterprises (SMEs) in Bangladesh. It notes that SMEs make up a large portion of the economy in Bangladesh and contribute significantly to GDP, employment, poverty alleviation, and other factors.
- However, SMEs face several constraints in obtaining financing, such as limited access to capital, high interest rates, lack of infrastructure and market opportunities, and information gaps. Commercial banks provide some financing but their involvement remains limited due to perceived high risks and costs of lending to SMEs.
- The study aims to identify constraints related to SME financing and provide policy implications. It reviews several other studies on SME financing challenges in Bangladesh and other countries
A study on effect of liquidity management on profitability with select privat...Supriya Mondal
This document provides a literature review on 9 previous research papers related to the relationship between liquidity management and profitability in banks. The papers examined liquidity ratios like CDR, CRDR and IDR and profitability ratios like ROA, ROE and ROI in various public sector, private sector and cooperative banks in India over different time periods. Most of the studies found an inverse or negative relationship between liquidity and profitability, indicating that increased liquidity leads to decreased profits and vice versa. The papers also compared performance between public and private sector banks, with most finding that private banks had better efficiency and profitability.
Assessing the effect of liquidity on profitability of commercial banks in kenyaAlexander Decker
This document discusses factors that affect the profitability of commercial banks in Kenya. It provides background on the banking sector in Kenya and reviews various theories on factors that influence bank profitability, including market power theory, efficiency structure theory, and the Modigliani-Miller theorem. The study aimed to determine the effect of internal factors like liquidity on the profitability of commercial banks in Kenya. It found that liquidity has a statistically significant and positive relationship with bank profitability.
A study on effect of liquidity management on profitability with select privat...Supriya Mondal
This document provides background information and a literature review for a study on the relationship between liquidity and profitability in select public and private sector banks in India. It begins with an introduction to the topic, outlining the trade-off between liquidity and profitability for banks. It then reviews 10 previous research papers on similar topics, analyzing factors like liquidity ratios, efficiency, and performance comparisons between public and private sector banks. The reviewed papers examine issues like the effect of liquidity on profitability, comparing liquidity positions between bank types, and evaluating banks' financial health using the CAMEL model.
Determinants of commercial banks profitability panel data evidence from pakistanAlexander Decker
This document summarizes a research study that investigated the determinants of commercial bank profitability in Pakistan from 2004-2010. The researchers used multiple regression analysis on a sample of 5 major commercial banks to determine the relationship between return on assets (the dependent variable) and various internal and external independent variables. The results indicated that internal factors like liquidity, efficiency, asset composition, deposit composition, and external factors like firm size had a significant impact on bank profitability. The study adds to the limited literature on factors influencing bank performance in Pakistan.
A study on effect of liquidity management on profitability with select privat...Supriya Mondal
Here are the key ways that banks can achieve liquidity:
1. Holding cash reserves - Banks are required to hold a certain percentage of deposits in the form of cash reserves that can be used immediately to meet liquidity needs. However, excess cash reserves reduce potential earnings.
2. Investing in government securities - Banks invest in short-term government bonds and treasury bills that can be easily sold in the market to generate cash. However, the returns may be lower than other investments.
3. Borrowing from other banks - Banks can borrow from other banks in the interbank market through instruments like federal funds, commercial papers etc. This provides quick access to funds but interest rates may be higher during liquidity cri
Corporate Governance Practices of Indian Public Sector and Private Sector Ban...scmsnoida5
This study examines the differences in corporate governance practices between public sector banks and private sector banks in India. An assessment tool called the Corporate Governance Disclosure Index (CGDI) was used to analyze annual reports from 2002-2014 of top public and private sector banks. Statistical analysis found some significant differences between the two sectors. Private banks had stronger practices related to board structure and remuneration committees. Both sectors differed significantly in adopting non-mandatory recommendations, with private banks exceeding in compliance. However, there were no major differences found regarding transparency/disclosure practices and shareholders' rights. The study aims to compare governance quality between Indian public and private banks.
The Impact of Liquidity on Profitability on Selected Banks of Bangladesh Samia Ibrahim
This research seeks to establish a relationship between liquidity and profitability which may assess in liquidity management in the banks in Bangladesh.There has been a wide range of study on the concepts of liquidity and profitability. My research differs from the previous works as such research was not done in the context of Bangladeshi banking sector using recent data.
Md. Abdullah-Al-Mamun has over 27 years of experience in engineering and banking. He has held various roles such as Assistant Engineer, Principal Officer, Assistant General Manager, and Deputy General Manager at organizations including The Designers Collaborative Ltd., Bangladesh Consultants Ltd., Agrani Bank Ltd., and currently serves as Divisional Head of Industrial Credit Division-1 and Project Director. He has a Bachelor's degree in Civil Engineering, MBA in Finance and Banking, and has completed various professional training programs. He is proficient in English, Bengali, AutoCAD, MS Office, and has published articles on engineering and banking topics.
This document is a project report on customer satisfaction with public and private banks in Bangladesh. It includes an introduction outlining the objectives of assessing customer satisfaction levels across various service attributes. It then provides details on the methodology, including preparation of a questionnaire and data collection from 70 customers of 4 major banks. The literature review defines key concepts related to customer service, satisfaction, and their relationship to banking sector, customer loyalty, and service quality. Finally, the document outlines the structure and contents of the remaining chapters which will analyze the data and findings, provide recommendations, and draw conclusions.
A Comparison of Key Determinants on Profitability of India’s Largest Public a...Rajveer Rawlin
The banking sector in India has come under the scanner following some key changes in monetary policy. With
the Reserve bank of India (RBI) raising interest rates to support the falling Indian currency the Rupee, the cost of
funds of banks has increased significantly. This could manifest itself in rising non-performing assets (NPAs) and
declining profitability. The profitability of banks is impacted by both internal and external factors. This paper is
an attempt to compare the key drivers of profits at India’s largest public and private sector banks. Bank specific
metrics and risk factors were important drivers of profits at both banks. Productivity measures were key drivers
of profits at India’s largest public sector bank SBI but had no effect on profits at India’s largest private sector
bank, HDFC bank. Asset usage efficiency measures were key determinants of profitability at HDFC bank but not
at SBI. The single most important determinant of SBI proved to be business per employee, a productivity
measure while advances and bank size which are traditional bank metrics were key drivers of profits at HDFC
bank. Managers at both banks and their share holders thus can look at these drivers to develop a broad
understanding of profitability at the two banks.
Firm level determinants to small and medium sized enterprises’ access to fina...rrpidani
Firm Level Determinants to Small and Medium-Sized Enterprises’ Access to Financing in Indonesia by Rita Pidani and Ishak Balaka. Academy of Taiwan Business Management Review, April 2013, Volume 9, Number 1, pp. 117-126.
This document discusses a study on the effect of capital structure on the profitability of conventional and Islamic banks in Pakistan. The study examines the relationship between capital structure factors like total liabilities to total assets, total equity to total assets, total liabilities to total equities, and bank size with profitability measures like return on equity and return on assets. Annual reports from 5 Islamic banks and 5 conventional banks between 2010-2014 are analyzed using statistical tools like correlation analysis and t-tests. The study aims to compare the capital structure and its impact on profitability between conventional and Islamic banks in Pakistan and help policymakers. Limitations and the thesis structure are also outlined.
The Performance Analysis of Private Conventional Banks: A Case Study of Bangl...IOSR Journals
This study attempts primarily to measure the financial performance of some selected private
commercial banks in Bangladesh for the period 2006-2011 and to identify whether any relationship exists
between a bank’s years of operation and its performance. For this purpose five banks have been selected from
different generations. The financial performances of these banks have been scrutinized from the following four
dimensions: (1) profitability (2) liquidity (3) credit risk and (4) efficiency. The study concluded that there is no
specific relationship between the generation of banks and its performance. The performances of banks are
dependent more on the management’s ability in formulating strategic plans and the efficient implementation of
its strategies. The study findings can be helpful for management of private commercial banks in Bangladesh to
improve their financial performance and formulate policies that will improve their performance. The study also
identified specific areas for each bank to work on which can ensure sustainable growth for these banks
This document provides an overview of public sector undertakings (PSUs) in India. It discusses that PSUs are government-owned companies that play an important role in India's economy. The document then covers several key topics regarding PSUs, including the financial management challenges they face, the role of financial advisors, examples of major PSUs, and reforms around disinvestment and increasing transparency. It analyzes issues like managing risks and growth in the changing banking environment in India. Overall, the document presents an introduction to PSUs and examines their operations, importance, and ongoing development.
A nexus between liquidity & profitability a study of trading companies in sri...Alexander Decker
This document summarizes a study that investigated the relationship between liquidity and profitability of trading companies in Sri Lanka. The study analyzed annual report data from 8 listed trading companies over a 5-year period from 2008 to 2012. Correlation and regression analyses were used to examine the nature and extent of the relationship between liquidity ratios like current ratio and quick ratio and profitability ratios like return on equity and return on assets. The findings suggest there is a significant relationship between liquidity and profitability among the sampled trading companies in Sri Lanka. However, the results may not be generalizable to non-public companies or other sectors. The document provides background on liquidity, profitability, prior studies on the relationship, and the methodology used
EMERGING EQUITY MARKET AND ECONOMIC DEVELOPMENT: BANGLADESH PERSPECTIVERajib Datta
This document summarizes a paper that analyzes the relationship between stock market development and economic growth in Bangladesh. It provides background on Bangladesh's capital markets, noting they are small but growing. It then examines various indicators of the stock market over time, such as market capitalization, liquidity, and foreign investment. While the markets have grown, the growth lacks stability and more work is needed to understand the link between the stock markets and economic growth. The document also reviews the relevant laws and players in Bangladesh's capital markets and their objectives. It describes the scope and methodology of the paper.
CREDIT QUALITY IN INDIAN BANKING :QUANTITATIVE EVALUATIONDinabandhu Bag
This document summarizes a study examining factors that influence credit quality and non-performing loans in Indian banking. The study finds:
1) Both economic factors and bank-specific factors like capital adequacy ratios and credit deposit ratios influence credit quality and non-performing assets.
2) Analyzing data from 2002-2007 for 17 major Indian banks, the study finds higher capital adequacy ratios and credit deposit ratios are associated with lower non-performing loans.
3) Stronger economic growth, as measured by GDP growth, is also associated with lower non-performing loans for banks. The results provide insights into how banks can maintain better credit quality.
Identity Management Reform and Fraud Prevention in the Nigerian Banking IndustryDr. Amarjeet Singh
This paper assesses the effect ofidentity management reform, namely the Bank verification number (BVN) policy on fraud prevention in the Nigerian banking industry. Using secondary data obtained from annual reports of Nigerian Deposit Insurance Corporation (NDIC) from 2011 to 2018, the study employed descriptive method to analyze trend in fraud variables before and after introduction of the policy and independent t-test to test the hypotheses in the study. Findings revealed that there was an initial decrease in number of staff involved and total amount involved in fraud in the two years following BVN introduction, but which showed increases thereafter.A similar trend was revealed in various fraud types with internet banking fraud showing significant increases in frequency of cases. The results from the t-tests revealed that theBVN policy had no significant impact on fraud prevention within the period under study. It was recommended that the banking public be educated on the different types of fraud and how to protect their personal details from getting into wrong hands. There is also the need to beef up security by improving on protocols required to carry out bank transactions particularly in the area of internet banking. It was also suggested that all bank account numbers be linked to the National Identity Number (NIN) immediately in line with proposals made by the Federal Government on identity management.
Institutional credit and the profit efficiency of micro and small scale trade...Alexander Decker
This document summarizes a study on the impact of institutional credit on the profit efficiency of micro and small scale traders in Faisalabad, Pakistan. Data envelopment analysis was used to calculate efficiency scores for 85 traders, with the average technical efficiency being 0.78. Tobit regression then explored factors influencing efficiency. It found that average propensity to consume, interest rate, and number of times credit was taken negatively impacted variable returns to scale technical efficiency. Micro traders were more efficient than small scale traders. Traders using loans for their intended business purposes were more efficient than those using loans for other purposes. The study recommends financial institutions improve screening policies and provide training to traders.
- The document discusses financing of small and medium enterprises (SMEs) in Bangladesh. It notes that SMEs make up a large portion of the economy in Bangladesh and contribute significantly to GDP, employment, poverty alleviation, and other factors.
- However, SMEs face several constraints in obtaining financing, such as limited access to capital, high interest rates, lack of infrastructure and market opportunities, and information gaps. Commercial banks provide some financing but their involvement remains limited due to perceived high risks and costs of lending to SMEs.
- The study aims to identify constraints related to SME financing and provide policy implications. It reviews several other studies on SME financing challenges in Bangladesh and other countries
A study on effect of liquidity management on profitability with select privat...Supriya Mondal
This document provides a literature review on 9 previous research papers related to the relationship between liquidity management and profitability in banks. The papers examined liquidity ratios like CDR, CRDR and IDR and profitability ratios like ROA, ROE and ROI in various public sector, private sector and cooperative banks in India over different time periods. Most of the studies found an inverse or negative relationship between liquidity and profitability, indicating that increased liquidity leads to decreased profits and vice versa. The papers also compared performance between public and private sector banks, with most finding that private banks had better efficiency and profitability.
Assessing the effect of liquidity on profitability of commercial banks in kenyaAlexander Decker
This document discusses factors that affect the profitability of commercial banks in Kenya. It provides background on the banking sector in Kenya and reviews various theories on factors that influence bank profitability, including market power theory, efficiency structure theory, and the Modigliani-Miller theorem. The study aimed to determine the effect of internal factors like liquidity on the profitability of commercial banks in Kenya. It found that liquidity has a statistically significant and positive relationship with bank profitability.
A study on effect of liquidity management on profitability with select privat...Supriya Mondal
This document provides background information and a literature review for a study on the relationship between liquidity and profitability in select public and private sector banks in India. It begins with an introduction to the topic, outlining the trade-off between liquidity and profitability for banks. It then reviews 10 previous research papers on similar topics, analyzing factors like liquidity ratios, efficiency, and performance comparisons between public and private sector banks. The reviewed papers examine issues like the effect of liquidity on profitability, comparing liquidity positions between bank types, and evaluating banks' financial health using the CAMEL model.
Determinants of commercial banks profitability panel data evidence from pakistanAlexander Decker
This document summarizes a research study that investigated the determinants of commercial bank profitability in Pakistan from 2004-2010. The researchers used multiple regression analysis on a sample of 5 major commercial banks to determine the relationship between return on assets (the dependent variable) and various internal and external independent variables. The results indicated that internal factors like liquidity, efficiency, asset composition, deposit composition, and external factors like firm size had a significant impact on bank profitability. The study adds to the limited literature on factors influencing bank performance in Pakistan.
A study on effect of liquidity management on profitability with select privat...Supriya Mondal
Here are the key ways that banks can achieve liquidity:
1. Holding cash reserves - Banks are required to hold a certain percentage of deposits in the form of cash reserves that can be used immediately to meet liquidity needs. However, excess cash reserves reduce potential earnings.
2. Investing in government securities - Banks invest in short-term government bonds and treasury bills that can be easily sold in the market to generate cash. However, the returns may be lower than other investments.
3. Borrowing from other banks - Banks can borrow from other banks in the interbank market through instruments like federal funds, commercial papers etc. This provides quick access to funds but interest rates may be higher during liquidity cri
Corporate Governance Practices of Indian Public Sector and Private Sector Ban...scmsnoida5
This study examines the differences in corporate governance practices between public sector banks and private sector banks in India. An assessment tool called the Corporate Governance Disclosure Index (CGDI) was used to analyze annual reports from 2002-2014 of top public and private sector banks. Statistical analysis found some significant differences between the two sectors. Private banks had stronger practices related to board structure and remuneration committees. Both sectors differed significantly in adopting non-mandatory recommendations, with private banks exceeding in compliance. However, there were no major differences found regarding transparency/disclosure practices and shareholders' rights. The study aims to compare governance quality between Indian public and private banks.
The Impact of Liquidity on Profitability on Selected Banks of Bangladesh Samia Ibrahim
This research seeks to establish a relationship between liquidity and profitability which may assess in liquidity management in the banks in Bangladesh.There has been a wide range of study on the concepts of liquidity and profitability. My research differs from the previous works as such research was not done in the context of Bangladeshi banking sector using recent data.
Md. Abdullah-Al-Mamun has over 27 years of experience in engineering and banking. He has held various roles such as Assistant Engineer, Principal Officer, Assistant General Manager, and Deputy General Manager at organizations including The Designers Collaborative Ltd., Bangladesh Consultants Ltd., Agrani Bank Ltd., and currently serves as Divisional Head of Industrial Credit Division-1 and Project Director. He has a Bachelor's degree in Civil Engineering, MBA in Finance and Banking, and has completed various professional training programs. He is proficient in English, Bengali, AutoCAD, MS Office, and has published articles on engineering and banking topics.
This document is a project report on customer satisfaction with public and private banks in Bangladesh. It includes an introduction outlining the objectives of assessing customer satisfaction levels across various service attributes. It then provides details on the methodology, including preparation of a questionnaire and data collection from 70 customers of 4 major banks. The literature review defines key concepts related to customer service, satisfaction, and their relationship to banking sector, customer loyalty, and service quality. Finally, the document outlines the structure and contents of the remaining chapters which will analyze the data and findings, provide recommendations, and draw conclusions.
This document is an internship report submitted by Md. Abul Bashar to his lecturer Syeda Tasmia Tasneem on his internship at Agrani Bank Limited. The report provides an overview of Agrani Bank Limited, including its vision, mission, products, and services. It also analyzes the human resource management practices at Agrani Bank Limited, covering topics like recruitment, training, performance management, compensation, and more. The report aims to provide a comprehensive study of HRM practices at Agrani Bank Limited based on the author's internship experience.
Agrani Bank Limited is a nationalized commercial bank in Bangladesh that was formed in 1972 by taking over assets and liabilities of two other banks. It has over 900 branches throughout Bangladesh and overseas. [The bank's vision is to provide banking services to the masses to support Bangladesh's economic growth. Its mission is to be an innovative leader in performance and customer service. The bank aims to serve customers and earn profits while supporting Bangladesh's economy and entrepreneurs.]
The document provides details about Agrani Bank Limited (ABL), a state-owned commercial bank in Bangladesh. It discusses ABL's establishment in 1972 through the merger of two other banks. It notes that ABL has an authorized capital of 800 million taka and paid-up capital of 248 million taka, with total equity of 725 million taka as of 2010. ABL has over 867 branches across Bangladesh, including 10 corporate branches, 341 town branches, and 526 rural branches. The document also gives an overview of ABL's management and board of directors.
An analysis of customer satisfaction at the premier bank limited, fullWINNERbd.it
The document provides background information on The Premier Bank Limited (PBL), one of the leading private banks in Bangladesh. It discusses PBL's vision, mission, organizational structure, products and services. PBL collects deposits and provides various loan and banking services. It has a network of over 65 branches across Bangladesh and aims to be the most customer-friendly bank. The document also outlines PBL's ownership structure, board of directors, and the various banking divisions and products it offers customers.
Analyzing customer satisfaction level at standard chartered bankWINNERbd.it
This document is an internship report submitted by Afrin Akter Rumi to analyze customer satisfaction levels at Standard Chartered Bank's Narayangonj branch in Bangladesh. It provides background on the bank, describes the internship experience and objectives of analyzing customer service. Data collection methods included interviews, questionnaires, and observations of bank activities and customers. The report aims to evaluate customer satisfaction, identify ways to improve service, and examine the bank's performance. Some limitations to the study include inability to access all bank data and preparing the report within the internship period.
Overall banking system on agrani bank ltdAsad Saimon
The document provides an internship report on Agrani Bank Limited. It discusses the bank's history and objectives, which include acting as a medium of exchange, contributing to GDP growth, and expanding access to financial services.
The report evaluates several aspects of the bank's performance, including credit provision, trade financing, industrial development financing, and foreign exchange business. It analyzes loan portfolios, credit recovery programs, loan classification and provisioning. It also covers the bank's computerization efforts and assessments of capital adequacy and liquidity.
The document contains details on the bank's loan portfolios across different sectors, programs to finance small businesses and industrial projects, and participation in credit schemes with international financial institutions.
Prime Bank Limited is a private commercial bank in Bangladesh that was established in 1995. The report provides an overview of Prime Bank, including its vision, mission, management structure, departments, products, and financial performance. It also discusses the general banking activities and operations of the bank's Dhanmondi branch.
Internship report on measuring customer satisfaction level of credit cardhold...WINNERbd.it
This internship report summarizes the internship experience of the author at the Sat Masjid Road branch of Southeast Bank Limited in Bangladesh. The report focuses on measuring the customer satisfaction levels of credit cardholders at Southeast Bank.
The report includes an overview of Southeast Bank, describing its vision, mission, products/services offered including credit cards. It also provides organizational structure, performance metrics, and a SWOT analysis.
The internship section describes the author's experience in different departments like front desk and remittance. It outlines job responsibilities and observations on customer service processes with recommendations for improvement. The report then analyzes survey data collected from credit card customers to measure their satisfaction levels and identify areas of improvement for the bank
Determinants of Profitability of Commercial Banks in BangladeshPremier Publishers
The paper examined the profitability determinants of private commercial banks of Bangladesh for the year 2014 and 2015. The study employed annual data for all the 11 private commercial banks of Bangladesh for the year 2014 and 2015. Multiple regression analyses were run to capture the significant determinants of profitability and to test hypothesis. The empirical findings from this study suggested that asset size and Net Interest Margin ratio had no significant effect on the profitability. But the impact of non-performing loans to total loans (NPL) on profitability was observed as the most significant among various variables. Furthermore, investment activities, mainly in shares and debentures of private sectors also have some positive impact on return on equity (ROE). The findings also suggested that diversified banking activities including the investment activities made these banks more profitable. Diversified banking activities are welcomed but if these activities include higher proportion of volatile trading activity rather than low risk income streams like fees and commission, the risk may become higher. The policy direction should be directed in such a way which will enhance the resilience and efficiency of the financial institutions with the aim of intensifying the sturdiness as well as strength of the banking sector.
DETERMINANTS OF BANK PROFITABILITY: EVIDENCE FROM COMMERCIAL BANKS OF BANGLADESHMd. Shohel Rana
This paper attempts to investigate the impact of different bank specific
and macroeconomic variables on bank profitability by considering 23
commercial banks of Bangladesh based on data availability during the
period 2013-17. These data are collected from the individual banks
annual reports, Bangladesh Bureau of Statistics (BBS) and a variety of
publications of the Bangladesh Bank. The fixed effect model for panel
data has been applied to operate the regression analysis among the
variables. In the study, three identical measures of profitability namely
Return on Asset (ROA), Return on Equity (ROE) and Net Interest
Margin (NIM) are used. In the model for ROA, the result indicated
that earning variable (TIN, NII), and asset structure (DPST) have a
significant positive relationship with ROA, and asset quality (NPL) has
significant negative impact on ROA. For ROE, earning (TIN and NII)
and capital strength (CAP) have a significant positive relationship of
the entire explanatory variable with ROE. Only asset quality (NPL)
has significant negative impact on ROE. For NIM, earning variables
(TIN), capital strength (CAP) and liquidity (LTA) have a significant
positive relationship with NIM. This study find no significant impact
of the macroeconomic factors namely growth rate of GDP and rate
inflation and rate of interest included in the models on profitability.
For decision making and developing the performance of financial
organization in the future the findings of this study can assist the
investors, policymakers, management body and other stakeholders
This document discusses a study analyzing the financial performance of selected private sector banks in Bangladesh in light of capital levels. The study examines the impact of factors like total capital/assets, risk-weighted assets, core capital/assets, equity capital/assets, and cost income ratio on the banks' returns on assets and equity. Annual data from 2008-2012 for three banks was used in multiple regression analysis. The study aims to determine if capital adequacy and cost income ratio influence bank profitability, and if Basel II requirements have been effective in reducing non-performing loans and bankruptcy risks in Bangladeshi banks. Previous literature suggests capital adequacy can impact lending, performance, and bankruptcy risk, but markets may better determine optimal capital levels.
A strategy to manage the np as of public sector banksIAEME Publication
The document discusses strategies to manage non-performing assets (NPAs) of public sector banks in India. It finds that willful defaults by borrowers and inefficient credit appraisal systems are key determinants of NPAs. The NPAs of public sector banks have been growing significantly due to poor asset quality and ineffective information systems. The document suggests steps like improving credit risk management, strengthening recovery systems, and enhancing credit appraisal and loan monitoring to reduce NPAs. Multiple regression analysis indicates that willful defaults, fraudulent lending practices, and delays in repayment significantly influence default rates and NPAs. Tighter management of credit risk factors is needed to control NPAs.
A STUDY OF VARIOUS TYPES OF LOANS OF SELECTED PUBLIC AND PRIVATE SECTOR BANKS...IAEME Publication
Banking regulations act of India, 1949 defines banking as “acceptance of deposits for the purpose of lending or investment from the public, repayment on demand or otherwise and withdrawable through cheques, drafts order or otherwise”, the major participants of the Indian financial system are commercial banks, the financial institution encompassing term lending institutions. Investments institutions, specialized financial institution and the state level development banks, non banking financial companies (NBFC) and other market intermediaries such has the stock brokers and money lenders are among the oldest of the certain variants of NBFC and the oldest market participants. The asset quality of banks is one of the most important indicators of their financial health. The Indian banking sector has been facing severe problems of increasing Non- Performing Assets (NPAs). The NPAs growth directly and indirectly affects the quality of assets and profitability of banks. It also shows the efficiency of banks credit risk management and the recovery effectiveness. NPA do not generate any income, whereas, the bank is required to make provisions for such as assets that why is a double edge weapon. This paper outlines the concept of quality of bank loans of different types like Housing, Agriculture and MSME loans in state Haryana of selected public and private sector banks. This study is highlighting problems associated with the role of commercial bank in financing Small and Medium Scale Enterprises (SME). The overall objective of the research was to assess the effect of the financing provisions existing for the setting up and operations of MSMEs in the country and to generate recommendations for more robust financing mechanisms for successful operation of the MSMEs, in turn understanding the impact of MSME loans on financial institutions due to NPA. There are many research conducted on the topic of Non- Performing Assets (NPA) Management, concerning particular bank, comparative study of public and private banks etc. In this paper the researcher is considering the aggregate data of selected public sector and private sector banks and attempts to compare the NPA of Housing, Agriculture and MSME loans in state Haryana of public and private sector banks. The tools used in the study are average and Anova test and variance. The findings reveal that NPA is common problem for both public and private sector banks and is associated with all types of loans either that is housing loans, agriculture loans and loans to SMES. NPAs of both public and private sector banks show the increasing trend. In 2010-11 GNPA of public and private sector were at same level it was 2% but after 2010-11 it increased in many fold and at present there is GNPA in some more than 15%. It shows the dark area of Indian banking sector.
OWNERSHIP STRUCTURE OF COMMERCIAL BANKS IN INDIARAVICHANDIRANG
Banks are the major institutions in any country not only for the economic development but also for social development with respect to meeting basic infrastructure in the country. The Banking system of a country is an important pillar holding up the financial system of the country’s economy. The major role of banks in a financial system is the mobilization of deposits and disbursement of credit to various sectors of the economy. Commercial banks in India are the backbone of all major economic activities in the country, whether it is for the citizens to keep their hard-earned money safely or get loans whenever they need funds for important things like a home, wedding, a car or for business. Therefore, there is a need of understanding banking system and its ownership status.
Bandhan started as Bandhan Konnagar in 2001 as a non-governmental organisation
(NGO) providing microfinance services to socially and economically disadvantaged
women in rural West Bengal. Bandhan Financial Services (BFSL) started its microfinance
business in 2006. The NGO transferred its microfinance business to BFSL in 2009. Thus,
the entire microfinance business was undertaken by BFSL from 2009.
Determinants of Banks’ Financial Performance: A Comparative Study between Nat...inventionjournals
Financial performance is one of the most critical factors having impact on the decision making of the resource providers. And thus to ensure the existence in the ever growing competitive business environment, every institution should be more concerned about the factors affecting their financial performance. This paper specially focuses on identifying the factors having impact on the financial performance of the commercial banks operating in Bangladesh. An effort has also been exerted to determine whether the extent of influence of various factors on financial performance varies with respect to local private and nationalized commercial banks. For this purpose 10 local private commercial banks (PCB) and all nationalized commercial banks (NCB) have been taken covering the period from 2008-2014. Here, data has been collected from the annual reports of the banks under consideration. To draw conclusion a multiple regression has been run by considering financial performance (profitability) as dependent variable and operating efficiency, asset utilization , liquidity, credit risk, capital adequacy and size of the company as independent variables. The study finds that asset utilization and operating efficiency have significant positive impact on banks' financial performance (profitability) whereas credit risk has significant negative impact. However, for PCBs asset utilization is the most critical factor to performance. On the other hand, result shows that in case of NCB 1 taka increase in credit risk is responsible for negative return of 0.968 taka. It is found that financial performance has no significant relationship with size and liquidity of the banks
Analysing green initiatives effect on operating profit Devansh Doshi
This document provides a summary of a business statistics project report analyzing the impact of green initiatives on bank operating profits in India. It includes an introduction on the size and structure of India's banking industry. Key statistics are presented on deposits, credit growth, and market shares. Recent developments in the industry including partnerships and acquisitions are also discussed. The government's proposed reforms to consolidate banks and enhance financial inclusion through new licensing and technology are summarized.
11.effects and consequences of emphasizing sectoral recovery rate and sectora...Alexander Decker
This document discusses a study analyzing how emphasizing sectoral loan recovery rates and the proportion of loans to certain sectors in Bangladesh Shilpa Bank's (BSB) loan portfolio affects its approval of new project loans. The study conducts empirical tests to examine if this emphasis sacrifices opportunities in profitable sectors or approves loans to highly leveraged sectors. Regression models are developed and tested using data on sectoral loans, recoveries, and financial information of listed companies. The results found a positive relationship between sectoral recovery rates, loan portfolio proportions, and new project approvals, as well as evidence that loans were approved to high debt sectors.
- The document discusses SME financing in Bangladesh, including its importance to the economy and challenges faced.
- SMEs account for about 45% of manufacturing value addition in Bangladesh and contribute around 20-25% of GDP. However, they face difficulties obtaining financing from commercial banks.
- The study aims to identify constraints related to SME financing in Bangladesh and provide policy implications to improve their performance and contribution to the economy. It reviews several past studies on challenges including high interest rates, lack of infrastructure, and information gaps.
Interfirm comparison on select private banking companies in indiaIAEME Publication
This document provides an analysis of the financial performance of 10 private banking companies in India from 2007-2008 to 2011-2012 using 7 key financial ratios. The ratios analyzed include net profit ratio, return on total assets, return on shareholders' funds, return on capital employed, asset turnover ratio, current ratio, and operating expenses ratio. The companies' performance on these ratios was evaluated using quartile deviation technique to classify them as having low, average, or high performance. The analysis found that Karur Vysya Bank Ltd and City Union Bank Ltd consistently demonstrated higher performance ratios compared to the other banks.
A Study on Factors Influencing the Financial Performance Analysis Selected Pr...Dr. Amarjeet Singh
The growth of a country's banking sector has a significant impact on its economic development. The banking sector plays a critical role in determining a country's economic future. A well-planned, structured, efficient, and viable banking system is an essential component of an economy's economic and social infrastructure. In modern society, a strong banking system is required because it meets the financial needs of the modern society. In a country's economy, the banking system plays a crucial role. Because it connects surplus and deficit economic agents, the bank is the most important financial intermediary in the economy. The banking system is regarded as the economy's lifeline. It meets the financial needs of commerce, industry, and agriculture. As a result, the country's development and the banking system are intertwined. They are critical in the mobilisation of savings and the distribution of credit to various sectors of the economy. India's private sector banks play a critical role in the country's economic development. So The financial performance of private sector banks must be evaluated carefully.
Analysis of Internal, Market & Economic Based Financial Performance Measureme...IOSRJBM
The aim of this study is to investigate the financial performance of 10 commercial banks listed on Dhaka Stock Exchange. In this paper, financial performance has been measured by using three indicators. Internal–based performance measured by Return on Assets, Market-based performance measured by Tobin’s Q model (Price / Book value of Equity) and Economic–based performance measured by Economic Value adds. The correlation and multiple regression of annual time series data is used to find the impact of bank size, credit risk, operational efficiency and asset management on financial performance measured by the three indicators, The study rejected the null hypothesis and it is found that there exist statistically significant impact of bank size, credit risk, operational efficiency and asset management with ROA and Economic Value Added. On the other hand Tobin’s Q has insignificant impact on financial performance of commercial banks
8.[77 92]effects and consequences of emphasizing sectoral recovery rate and s...Alexander Decker
This study analyzes how emphasizing sectoral loan recovery rates and the proportion of loans to sectors in Bangladesh Shilpa Bank's (BSB) loan portfolio affects its approval of new project loans. The study tests whether this emphasis sacrifices opportunities in profitable and growing sectors or approves loans to highly leveraged sectors. It analyzes the impacts of focusing on recovery rates and sectoral loan proportions on sector growth, profitability, and debt levels using empirical models. The results indicate the emphasis positively relates to loan approvals but also approves loans to highly leveraged sectors, sacrificing opportunities in more profitable sectors.
A STUDY ON FINANCIAL PERFORMANCE OF BDCC BANK LTD.ijtsrd
Co-operative banking system is basically an imported concept but it has come to occupy a pivotal and prominent role in the economic liberation of millions of people of our nation. It has emerged as a social and healthy banking institution providing need-based quality banking services essentially to the middle and lower middle classes and the marginalized sections of the society those who consists 75percent of our country. Co-operative Banks have assisted in boosting the growth rate of Indian economy by providing a fillip to agricultural production in the country by making available cheap and hassle free agricultural finance. A healthy co operative banking system is essential for Indian economy striving to achieve growth and remain stable in competitive global business environment. In this juncture the performance of these institutions has been than satisfactory and is deteriorating rapidly. On the other hand some institutions doing their services remarkably. In this way BDCC bank Ltd in Banaskantha district renders its services and meeting the credit requirement of rural, semi urban and urban customers. With this back ground data have been collected and analyzed the financial performance and operational efficiency of Banaskantha District Central Co-operative Bank Ltd (BDCC Bank). Prof. Kesarisinh S. Parmar"A STUDY ON FINANCIAL PERFORMANCE OF BDCC BANK LTD." Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-1 | Issue-6 , October 2017, URL: http://www.ijtsrd.com/papers/ijtsrd2527.pdf http://www.ijtsrd.com/management/accounting-and-finance/2527/a-study-on-financial-performance-of-bdcc-bank-ltd/prof-kesarisinh-s-parmar
This document discusses credit risk management and performance of private commercial banks in Bangladesh. It analyzes data from three banks - United Commercial Bank, Southeast Bank, and Standard Bank - to evaluate how credit risk management impacts bank profitability. Key variables examined include asset quality, non-performing assets, total investments to total assets, return on assets, and profit margin ratio. Regression analysis revealed credit risk management has a significant effect on the profits of private commercial banks in Bangladesh, with profitability dependent on return on assets and inversely related to credit risk. The document aims to investigate credit risk practices and their influence on bank performance.
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1. Research Journal of Finance and Accounting www.iiste.org
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 2, No 3, 2011
Performance Evaluation and Competitive Analysis of State
Owned Commercial Banks in Bangladesh
Shah Johir Rayhan (Corresponding author)
Department of Management & Finance
Sher-e-Bangla Agricultural University
Sher-e-Bangla Nagar, Dhaka-1207, Bangladesh.
Cell: +8801712700906
E-mail: johir_rayhan2006@yahoo.com
Alternative E-mail: sohagag@gmail.com
S.M. Sohel Ahmed
Department of Marketing
Northern College Bangladesh (Sister Concern of Northern University Bangladesh)
Dhaka-1207, Bangladesh.
Cell: +88 01711053120
E-mail: smsohelahmed@gmail.com
Alternative E-mail: smsohel_ahmed@yahoo.com
Ripon Kumar Mondal
Department of Agricultural Economics
Sher-e-Bangla Agricultural University
Sher-e-Bangla Nagar, Dhaka-1207, Bangladesh.
Cell: +8801712953758
E-mail: rkumar.ga@gmail.com
Abstract
The broad objective of this study is Performance Evaluation and Competitive Analysis of state owned
commercial banks in Bangladesh. This paper finds the development and growth of state owned commercial
banks in Bangladesh. Secondary data was used for the research. The study reveals all the state owned
commercial banks in Bangladesh are not able to achieve a stable growth, net profit, earning per Share,
return on equity, return on assets, net asset value per share but they are capable to achieve a stable growth
of deposit, loan and advances, equity. It is also observed that all the of state owned commercial banks have
high non performing loan/classified loan and % of classified loan to total loan is very high. Employees of
all state owned commercial banks are negative growth. Trend equations have been tested for different
activities of the state owned commercial Banks. Positive growth was found in deposit, assets and expense
while negative trend was found in number of employees. In case of non performing loan and % of
classified loan positive trend was found in Sonali Bank Limited and Rupali Bank Limited while negative
trend was in Janata Bank Limited and Agrani Bank Limited. Square of correlation coefficient (r2) has also
been tested for all trend equations. The r2 of branches, employees, deposit, assets are more than 0.5. It
indicates that the prospects of these indicators of state owned commercial banks are bright. All other
indicators like net profit after tax, earnings per share, non performing loan, and % of classified loan to total
loan r2 are not more than 0.5 for all banks. It proves that all state owned commercial banks do not achieve
these indicators during the period of 2005-2009.
Key words: State owned commercial bank, Competitive evaluation, Performance, Equity.
1. Introduction
Banks play very important roles in the economy life of a nation. The health of an economy is closely
related to the soundness of its banking system. Although banks create no new wealth but their borrowing,
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lending and related activities facilitate the process of production distribution, exchange and consumption of
wealth. In this way they become very efficient partners in the process of economic development. Today
modern banks are very useful for the utilization of the resources of the country. The banks are mobilizing
the savings of the people for the investment purpose. If there would no banks then a great portion of a
portion of a capital of the country would remain idle. A bank as a matter of fact is just like a heart in the
economic structure and the capital provided by it is like blood in it. As long as blood is in circulation the
organ will remain sound and healthy. If the blood is not supplied to any organ then it part would become
useless. So if the finance is not provided to agriculture sector or industrial sector it will be destroyed. Loan
facility provided by banks as an incentive to the producer to increase the production. Bangladesh financial
system is determined by banks where the banking systems account for around 96 percent of total assets of
the financial sector. The financial systems in Bangladesh is including Bangladesh Bank (The central Bank),
scheduled banks, non-bank financial institutions (NBFIs), Microfinance Institutions (MIs), Insurance
companies, co-operative, credit rating agency and stock exchange. Bangladesh has mixed banking system
comprising sate owned, private and foreign commercial banks. At present among the schedule bank 4 state
owned commercial banks (SCBs), 4 state owned specialized banks (SBs), 30 domestic private commercial
banks (PCBs), 9 foreign banks and 29 Non Bank Financial Institutions (NBFIs) as of December 31, 2009.
Besides the schedule banks 4 development financial institution, Investment Corporation in Bangladesh
(ICB), House Building Finance Corporation (HBFC), Samabai (Co-operative) Bank, Ansar VDP Unnayan
Bank and Karmasangstan Bank are operating in financial sector in Bangladesh all of which are state owned.
The Nobel Prize winning Grameen Bank is a specialized microfinance institution that revolutionized the
concept of poverty reduction and the empowerment of women in Bangladesh.
2. Review of the literature
Pandey (2006) stated that the easiest way to evaluate the performance of a firm is to compare its present
ratio with the past ratio. It gives an indicator of the direction of change and reflects whether the firm’s
financial performance has improved, deteriorated or remained constant over time. Connelt, et al. (2009)
observed how government ownership involvement in a country’s banking system affects bank performance
from 1989 through 2004. Their study uncovers an interesting pattern of changing performance difference
between state owned and privately owned banks around the Asian Financial Crisis. They found that State-
owned banks operated with less profitability, held less core capital and had greater credit risk than privately
owned banks prior to 2001 and the greater performance differing more significant in those countries with
greater government involvement and political corruption in the banking system. Shleifer (1998) point out
that private ownership should generally be preferred to public ownership when incentive and contain costs
are strong and especially when competition between suppliers, reputation mechanism and possibility of
provision by private not-for-profit firms as well as political patronage and corruption are brought into play.
Chowdhury and Ahmed (2009) observed that all the selected private commercial banks are able to achieve
a stable growth of branches, employee, deposit, loans and advances, net income, earning per share during
the period of 2002-2006. They indicate that the prospect of private commercial banks in Bangladesh is very
bright. Chowdhury (2002) observed that the banking industry of Bangladesh is a mixed one comprising
nationalized, Private and foreign banks. Many efforts have been made to explain the performance of these
banks. Understanding the performance of the bank requires knowledge about the profitability and the
relationship between variables like market size, banks risk and banks market size with the profitability.
Chowdhury and Islam (2007) stated that deposit and loan advances of nationalized commercial banks
(NCBs) are less sensitive to interest changes than those of Specialized Banks (SBs). So, SBs should not
make abrupt change in lending or deposit by following the NCBs. If NCBs change their lending rate, their
deposit or loan and advances will be affected less than those of CBs. Moreover, deposits of NCBs have
higher volume and higher volatility than those of SBs. However SBs offer higher deposit rates and charge
higher lending rate than NCBs, which is why the interest rate spread of SBs was higher than that of NCBs.
Siddique and Islam (2001) pointed out that the commercial banks, as a whole are performing well and
contributing to the economic development of the country. The average profitability of all Bangladeshi
Banks collectively was 0.09% during 1980 to 1995 which means that a profit of Tk.0.09 was earned by
utilizing assets of Tk.100 in every aspect of profit; banking sector contributes the national economy as well
as the individual organization. Despite overall growth of the banking sector positive the performance of
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different categories of banks were not equally attractive. Al-Shammari and Salimi (1998) stated that
profitability ratio especially Return on Equity (ROE) signals the earning capability of the organization.
They also suggest that higher return on Equity (ROE) ratio is appreciable and it is the primary indicator of
banks profitability and functional efficiency. Bhatt and Ghosh (1992) stated that the profitability of
commercial banks depends on several factors some of them are endogenous and some exogenous. The
endogenous factors represent control of expenditure, expansion of banking business, timely recovery of
loan and productivity. The exogenous factors consist of direct investments, such as SLR (Statutory
Liquidity Ratio), CRR (Cash Reserve Ratio) and direct credit program such as region wise, population wise
guidelines on lending to priority sector. The regulated and restricted regime in the operation of banking
system of investment, credit allocation, branch expansion, interest rate determination and internal
management corded the productivity and profitability. Jones et al. (1999) provide evidence that when
government convert state-owned firm to privately-owned firm via public share offering, they under price
share issue privatization offer, allocate the share to favored domestic investors, impose control restrictions
on privatized firm and typically used fixed price offer rather than competitive tender offer, all to further
political and economic policy objectives. Barth et al. (2001) concluded that state-ownership of banks tends
to be associated with more poorly developed banks, non-banks and securities market. Alam and Jahan
(1999) reported that non professional handling of assets both by the state owned commercial banks and the
private sector banks was reported as the main reasons for accumulation of loan default problem in
Bangladesh. It included the government directed credit for the loss making public sector enterprises and the
private sector banks lending to insiders and connected people. Mujeri & Younus (2009) stated that the
higher the non interest income as a ratio of total assets of banks the lower interest rate spread. Similarly
market share of deposit of a bank, statutory reserve requirement and NSD certificate interest rate affects the
IRS. The analysis in terms of banks group shows that IRS is significantly influenced by operating cost and
classified loan of state owned commercial bank and specialized banks while inflation, operating cost
market share of deposit, statutory reserve requirement and taxes are important for the private commercial
banks. On the other hand non interest income, inflation, market share and taxes matter for the foreign
Commercial banks. Ahmed et al. (2006) stated that in order to strengthen the economic conditions of the
economy the NCB must be improved of its NPL, ROA, ROE, NII, and other monitoring, assessment and
performance evaluation metrics. Khan (2008) stated that bank is evaluated based on profit and loss as the
same way for other business. If the shareholders of the bank get more profit then the bank is identified as
successful. Banks can attain success if relevant risks are effectively controlled. Van Horne & Wachowicz
(2005) stated that to evaluate a firm’s financial condition and performance the financial analyst need to
perform “checkups” on various aspects of a firm’s financial health. A tool frequently used these checkup is
a financial ratio. Brigham and Houston (2004) that financial statement analysis involves comparative the
firm’s performance with that of other firms in the same industry and evaluating trends in the firm’s
financial position over time. Jahangir et al. (2007) argued that the traditional measure of profitability
through stakeholder’s equity is quite different in banking industry from any other sector of business, where
loan-to-deposit ratio works as a very good indicator of banks’ profitability as it depict the status of assets-
liability management of banks.
3. An overview of the state owned commercial banks in Bangladesh
3.1 Sonali Bank Limited
Sonali Bank Limited is the largest among the state owned commercial banks in Bangladesh. Soon after
independence of the country Sonali Bank emerged as the largest and leading Nationalized Commercial
Bank by proclamation of the Banks' Nationalization Order 1972 (Presidential Order-26) liquidating the then
National Bank of Pakistan, Premier Bank and Bank of Bhwalpur. As a fully state owned institution, the
bank had been discharging its nation-building responsibilities by undertaking government entrusted
different socio-economic schemes as well as money market activities of its own volition, covering all
spheres of the economy. It was registered as a public limited company on June 03, 2007 and has been
converted to a Public Limited Company with 100% ownership of the government and started functioning as
Sonali Bank Limited from November 15, 2007 taking over all assets, liabilities and business of Sonali
Bank. Authorized Capital and paid up capital of the company is Tk.10.00 billion and Tk.9.00 billion. The
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bank has 1184 branches of which 341 in urban area and 841 in rural area and 2 in overseas. The bank has 3
subsidiaries company namely Sonali Bank UK Limited having 7 (seven) branches in UK, Sonali Exchange
Company Incorporated (SECI) having 8 (eight) branches in USA and Sonali Investment Limited (Merchant
Banking) having 1 (one) branch at Motijheel, Dhaka, Bangladesh. Sonali Bank Limited has Debit Card
namely Ready Cash. At present Sonali Bank Limited has 267 branches are computerized, 12 ATM booth
and 34 branches are included in the online Branch banking network. Branches having ABB facility are also
rendering SMS banking services (Annual Report of Sonali Bank Limited 2005-2009).
3.2 Agrani Bank Limited
Agrani Bank Limited, a leading commercial bank with 867 outlets strategically located in almost all the
commercial areas throughout Bangladesh, Overseas Exchange Houses and hundreds of overseas
Correspondents, came into being as a Public Limited Company on May 17, 2007 with a view to take over
the business, assets, liabilities, rights and obligations of the Agrani Bank which emerged as a nationalized
commercial bank in 1972 immediately after the emergence of Bangladesh as an independent state. Agrani
Bank Limited started functioning as a going concern basis through a Vendors Agreement signed between
the ministry of finance, Government of the People's Republic of Bangladesh on behalf of the former Agrani
Bank and the Board of Directors of Agrani Bank Limited on November 15, 2007 with retrospective effect
from 01 July, 2007. The authorized capital of the Bank is Tk. 800 crore. With a view to serving a huge
number of Bangladeshi guest workers in Singapore, Agrani Bank Limited have taken a bold step to open in
Singapore Agrani Exchange House Pte Ltd, a subsidiary company fully owned by Agrani Bank Limited,
which started its operation since February 08, 2002. (Annual Report of Agrani Bank Limited 2005-2009).
3.3 Janata Bank Limited
Janata Bank Limited, one of the state owned commercial banks in Bangladesh, has an authorized capital of
Tk. 20,000.00 million (approx. US$ 289.85 million), paid up capital of Tk. 5,000.00 million, reserve of
Tk.8,202.00 million and retained surplus Tk. 2,737.00 million. Immediately after the emergence of
Bangladesh in 1971, the erstwhile United Bank Limited and Union Bank Limited were renamed as Janata
Bank. On November 15, 2007 the bank has been corporatized and renamed as Janata Bank Limited. Janata
Bank Limited operates through 860 branches including 4 overseas branches at United Arab Emirates. It is
linked with 1202 foreign correspondents all over the world. Janata Bank Limited has also a subsidiary
company named Janata Exchange Company SRL in Italy. With a view to providing exclusive banking
service to NBR’s Janata Bank Limited opened NRB branch. Janata Bank Limited is going to launch Islami
Banking operation its five branches and also diversified its product they are going to launch Merchant
Banking Unit to play an important role in the capital market. Janata Bank Limited, first among the
Nationalized Commercial Banks, has introduced ATM Services (Annual Report of Janata Bank Limited
2005-2009).
3.4 Rupali Bank Limited
Rupali Bank Limited, one of the state owned commercial banks in Bangladesh, has an authorized capital of
Tk.7,000.00 million (US$ 120.70 million), Paid up Capital: Tk. 1,250 million (US$ 21.55 million). The
Breakup of paid up Capital is Government Shareholding 93.11% and Private Shareholding: 06.89 %.
Rupali Bank Ltd. was constituted with the merger of 3 (three) erstwhile commercial banks i.e. Muslim
Commercial Bank Ltd., Australasia Bank Ltd. and Standard Bank Ltd. operated in the then Pakistan on
March 26, 1972 under the Bangladesh Banks (Nationalization) Order 1972 (P.O. No. 26 of 1972), with all
their assets, benefits, rights, powers, authorities, privileges, liabilities, borrowings and obligations. Rupali
Bank Limited worked as a nationalized commercial bank till December13, 1986. Rupali Bank Ltd. emerged
as the largest Public Limited Banking Company of the country on December 14, 1986 (Annual Report of
Rupali Bank Limited 2005-2009).
4. Objectives of this study
To appraise the performance of State Owned Commercial Banks in Bangladesh.
To appraise the competitive analysis of State Owned Commercial Banks in Bangladesh.
To make recommendations on the basis of findings.
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5. Methodology
The present study has been carried out to evaluate the performance of state owned commercial banks in
Bangladesh. The banks are Sonali Bank Limited, Agrani Bank Limited, Janata Bank Limited and Rupali
Bank Limited. The analysis has been conducted mainly on data from Secondary sources. The relevant data
and information were collected from Stock Exchange, Annual Report, in relevant banks in Bangladesh,
Bangladesh Bank, Securities and Exchange Commission website and from relevant commercial banks.
Relevant article and literature have also been consulted. In this article we analyzed five years (2005-2009)
data of state owned commercial Banks of Bangladesh. Among the various straight-line trend method of
time series analysis the method of least square is most popular and widely used in practice. The method of
least square can be used either to a fit a straight trend or a parabolic trend. The straight-line trend is
represented by the equation Ye = a + bx where, Ye denotes the trend values to distinguish them from the
actual Y values. “a” is the Y intercept or the value of the Y variable when x= 0. “b” represent the slope of
the line of the amount of change in Y variable that if associated with a change of one unit in x variable. X
variable in the time series analysis represent time. The square of correlation coefficient (r 2) is called the
multiple determinants or squared multiple correlation coefficients. The coefficient of correlation is denoted
by r. The value of r lies between 0 and 1. The higher r 2 the greater the percentage of the variation of Y
explained by the regression model, that is, the better the “goodness of fit” of the regression model to the
sample observation r2 closer to zero, the worse the fit. Entire data analysis was performed through SPSS.
6. Result and Discussion
6.1 Growth of Branches of State Owned Commercial Banks
Table 1 shows the growth pattern of number of branches of state owned commercial banks. In 2009 the
growth of branches is highest in Janata Bank Limited where no growth was found in Sonali Bank Limited,
Agrani Bank Limited and Rupali Bank Limited. Sonali Bank Limited has the highest number of branches
i.e, 1184 and Rupali Bank Limited has the lowest number of branches i.e., 492.
6.2 Trend equation and r2 of Branches of State Owned Commercial Banks
Table 2 shows the summary of trend equation and r2 of branch expansion of state owned commercial
banks. It is reflected that trend equation of all state owned commercial banks are positive and goodness of
fit of all equations are high. In case of Janata Bank Limited is very high i.e. 0.88.
6.3 Growth of Employee of State Owned Commercial Banks
No. of employee of state owned commercial banks have been shown in Table 3. The highest no. of
employees are working in Sonali Bank Limited and lowest in Rupali Bank Limited, Negative trend was
found during 2005-2007 in each bank. In 2009 the growth percentage is higher in Rupali Bank Limited and
still negative and lowest in Janata Bank Limited.
6.4 Trend equation and r2 of Employee of State Owned Commercial Banks
Table 4 shows the summary of trend equation and r2 of employees of state owned commercial banks. It is
reflected from the table 4 that trend equation of all state owned commercial banks are negative and
goodness of fit of all equation is high. In case of Janata Bank Limited is very high i.e.0.97.
6.5 Growth of Deposit State Owned Commercial Banks
Table 5 shows the growth pattern of deposit of state owned commercial banks. It is observed from the table
5 that almost every year of deposit of all state owned commercial banks has increased from the previous
year except Rupali Bank Limited. The highest deposit is found in Sonali Bank Limited and lowest in
Rupali Bank Limited. The highest growth percentage of deposit is found in Agrani Bank Limited and
lowest in Rupali Bank Limited.
6.6 Trend equation and r2 of Deposit State Owned Commercial Banks
Table 6 shows the summary of trend equation and r2 of deposit of state owned commercial banks. It is
reflected from the table 6 that trend equation of all state owned commercial banks are positive and
goodness of fit of all equation is high. In case of Sonali Bank Limited is very high i.e.0.99.
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6.7 Trend equation and r2 of Loan and Advances of State Owned Commercial Banks
Table 7 shows the summary of trend equation and r2 of loan and advances of state owned commercial
banks. It is reflected from the table 7 that trend equation of all state owned commercial banks are positive
and goodness of fit of all equation is high except Sonali Bank Limited.
6.8 Non Performing/Classified Loan of State Owned Commercial Banks
It is reflected from the table 8 that the non performing loan of all state owned commercial banks is
increasing during 2005-2007 but decreasing after 2007 to 2009. The highest NPL is found in Sonali Bank
Limited and lowest in Rupali Bank Limited. It is also found that the recovery rate is highest in Rupali Bank
Limited and lowest in Sonali Bank Limited.
6.9 Trend Equation and r2 of % of Classified Loan to Total Loan of State Owned Commercial Banks
Table 9 shows the summary of trend equation and r 2 of % of classified loan to total loan of state owned
commercial banks. It is reflected from the table 9 that trend equations of Sonali Bank Limited and Rupali
Bank Limited are positive and negative in Janata Bank Limited and Agrani Bank Limited .All the equation
are not Goodness of fit except Agrani Bank Limited.
6.10 Growth of Net Profit after Tax of State Owned Commercial Banks
Table 10 shows the growth pattern of net profit of state owned commercial banks. It is observed from the
table 10 that all the banks have failed to earned net income continuously during the year of 2005-2009. In
2009 the highest net income is found in Janata Bank Limited and lowest in Agrani Bank Limited. All banks
have negative growth in net profit during 2008-2009 except Rupali bank Limited.
6.11 Trend Equation and r2 of Net Profit after Tax of State Owned Commercial Banks
Table 11 shows the summary of trend equation and r2 of net profit of state owned commercial banks. It is
reflected from the table 11 that trend equations of all state owned commercial banks are positive and
goodness of fit except Rupali Bank Limited equation.
6.12 Trend Equation and r2 of Earnings Per Share (EPS) of State Owned Commercial Banks
Table 12 shows the summary of trend equation and r2 of EPS of state owned commercial banks. It is
reflected that trend equations of all state owned commercial banks are positive except Agrani Bank
Limited and goodness of fit only Janata Bank Limited equation.
6.13 Trend Equation and r2 of Equity of State Owned Commercial Banks
Table 13 shows the summary of trend equation and r2 of equity of state owned commercial banks. It is
reflected that trend equation of all state owned commercial banks are positive except Rupali Bank Limited
and goodness of fit of all equation are highly low. In case of Janata Bank Limited is very high.
6.14 Trend Equation and r2 of assets of State Owned Commercial Banks
Table 14 shows the summary of trend equation and r2 of assets of state owned commercial banks. It shows
that trend equations of all state owned commercial banks are positive and goodness of fit of all equation is
high. In case of Janata Bank Limited is very high i.e.0.99.
6.15 Return on Equity (%) of State Owned Commercial Banks
Table 15 shows the Return on Equity (ROE) of assets of state owned commercial banks. During December
2009 the highest ROE is found in Janata Bank Limited and lowest in Sonali Bank Limited. Though the
equity is negative in Rupali Bank Limited so, ROA is not applicable.
6.16 Return on Asset (%) of State-Owned Commercial Banks
Table 16 shows the Return on Assets (ROA) of assets of state owned commercial banks. It explores that it
is fluctuate from year to year. During December 2009 the highest ROA is found in Rupali Bank Limited
and lowest in Sonali Bank Limited.
6.17 Growth of Total Expense of State Owned Commercial Banks
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Table 17 shows the growth pattern of expense of state owned commercial anks. It is observed that almost
every year of expense of all state owned commercial banks has increased from the previous year. The
highest amount and percentage of expense is found in Sonali Bank Limited and lowest in Rupali Bank
Limited.
6.18 Profit to Expense Ratio of State Owned Commercial Banks
Table 18 shows the Profit to expense ratio of state owned commercial banks. It is fount that it is fluctuate
from year to year. During December 2009 the highest Profit to expense ratio is found in Rupali Bank
Limited and lowest in Sonali Bank Limited.
6.19 Trend Equation and r2 of Net Asset Value per Share of State Owned Commercial Banks
Table 19 shows the summary of trend equation and r2 of net asset value per share of state owned
commercial banks. It is reflected from the table 15 that trend equation of all state owned commercial banks
are positive and goodness of fit of all equations is not high except ABL. In case of Agrani Bank Limited is
0.79.
7. Conclusion
Evaluation of banks financial performance is important for all parties like depositors, bank manager,
stockholders, creditors, regulators and educationalist. In a competitive market financial bank performance
provides signals to depositor investors whether to invest or withdraw fund from the bank. Similarly, it
flashes direction to bank manager whether to improve its deposit service or loan service or both to improve
its finance. Stockholders and creditors use the performance to evaluate the attractiveness of the bank as an
investment by examining its ability to meets its current and expected future financial obligation. Regulator
is also interested to know its regulation purpose. Educationalist can use this article for further research. It
has been observed that the net income of the SCB did not continuously increase from previous year rather
all SCB have decrease except Rupali Bank Limited during 2008-2009.It is also reflected from the analysis
that the EPS of all the SCB are not continuously rising and not so high. It is also indicated that the
profitability of all the SCB are not satisfactory. NPL/classified loan indicates that from 2005-2007 the
classified loan of all the banks have been decreased but after 2007 all the bank classified loan have
decreased but the amount is still high. Loan recovery rate indicates that the banks are able to manage their
credit efficiently. It is observed that from 2005 to 2007 % of classified loan have been increased to all the
banks and decreased all the banks after 2007. It is also observed that the classified loan of Janata Bank
Limited is low among all the SCB. It is also observed that Sonali Bank Ltd, Agrani Bank Limited and
Rupali Bank Limited are not able to manage credit efficiency effectively as a result recovery of loan is not
quite good. The growth percentages of branches of all SCB are almost zero. Since there are many branches
are spread all over the country they do not open their branches. In order to increase their activity and
income Janata and Rupali Bank may expand new branches. SCBs play an important role to create
employment in the banking sector. There are around seventy thousand people working in SCB.
Employment status of SCB indicates that employee of all the banks is decreasing from 2005 to 2009 except
Agrani and Rupali Bank Limited in the year 2009. So, all the SCB has to recruit energetic employee to
maintain the credit healthy. From the sequence of the analysis it is reflected that the deposit of SBL and
JBL has showed increasing trend but ABL and RBL is fluctuating during the period of 2005 to 2009. It is
also observed that the total deposit of ABL, RBL are not satisfactory in the comparison of SBL. So these
bank need to increase their deposit. It has been identified that the loan and advances of all SCBs are not
continuously increasing except RBL. It is fluctuated from the previous year. The growth rate of SBL, ABL
and RBL are not satisfactory in comparison with JBL. So SBL, ABL and RBL should try to increase the
growth rate of loan and advances. ROE indicates that a bank convert its equity into net earnings. The higher
ratio indicates higher ability and indicates that the ROE of all the SCB are fluctuating from year to year. It
is also indicates that all the banks fail to maintain a satisfactory ROE. ROA indicates that a bank convert its
assets into net earnings. The higher ratio indicates higher ability and indicates that the ROA of all the SCB
are fluctuating from year to year. It is also indicates that all the banks fail to maintain a satisfactory ROA.
Total expense of SCB indicates that Sonali Bank Limited need to decrease expense to increase net profit.
Profit expense ratio shows that SBL has lowest profit expense ratio. SBL need to decrease expense in order
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to increase profit expense ratio. From our analysis it is indicated that the assets of all SCB is increasing. It
is also indicate that RBL asset growth is not satisfactory in comparison to SBL, ABL and JBL. From the
analysis it is indicated that the equity of Janata Bank Limited have increased every year. 15 trend equations
have been observed for different activities of SCB. Although zero growth was found in branch but trend is
positive. Negative growth and negative trend was found in employee of all SCB. Positive growth and
positive trend was found in deposit, assets and expense. Although loan and advances and net profit was
fluctuated from year to year but positive trend was found in all the SCB. In case of EPS positive trend was
found in SBL, JBL and RBL but negative trend was found in ABL. In case of NPL and % of classified loan
to total loan positive trend was found in SBL and RBL but negative trend was found in JBL and SBL.
Square correlation coefficient (r2) has also been tested for all equation. The r2 of branches, employee,
deposit, assets are more than 0.5. It indicates that the prospects of these indicators of SCB are bright. All
other indicator like net income, EPS, NPL, % of classified loan to total loans r2 are not more than 0.5 for
all banks. It indicates that all the banks do not achieve this indicator during the period 2005-2009.
8. Recommendations
All banks have to recruit and select new employees. Sonali Bank Limited and Rupali Bank Limited have to
emphasize on recovery department to reduce the classified loan. SBL need to increase net income by
decreasing expense. Agrani Bank Limited and Janata Bank Limited need to expand the branches to collect
more deposit and increase net income.
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Appendices
Appendix-1
Short form Variable Name
SCB State Owned Commercial Bank
NPL Non Performing Loan
EPS Earnings Per Share,
NAV Net Asset Value
SBL Sonali Bank Limited
ABL Agrani Bank Limited
JBL Janata Bank Limited
RBL Rupali Bank Limited
NCB Nationalized Commercial Bank
ROE Return on Equity
ROA Return on Asset
CRR Cash Requirement Reserve
SLR Statutory Liquidity Reserve
IRS Interest Rate Spread
NII Net Interest Income
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ICB Investment Corporation of Bangladesh
HBFC House Building Finance Corporation
NBFI Non-Banking Financial Institution
PCB Private Commercial Bank
SB Specialized Bank
Appendix-2
Table 1: Number of Branches of State-Owned Commercial Banks
Sl No. Name of Banks Number of Branches
2005 2006 2007 2008 2009
1 Sonali Bank Limited 1183 1183 1183 1184 1184
Growth 0.00% 0.00% 0.08% 0.00%
2 Janata Bank Limited 847 848 848 849 851
Growth 0.12% 0.00% 0.12% 0.24%
3 Agrni Bank Limited 864 866 866 867 867
Growth 0.23% 0.00% 0.12% 0.00%
4 Rupali Bank Limited 491 492 492 492 492
Growth 0.00% 0.00% 0.00% 0.00%
Source: Compiled from different issues of Annual Report of Sonali Bank Limited, Janata Bank Limited,
Agrani Bank Limited and Rupali Bank Limited.
Table 2: Trend equation and r2 branches of State Owned Commercial Banks
Sl No. Name of the Bank Ye= a + bx r2
1 Sonali Bank Limited 1182.80 + 0.30x 0.75
2 Janata Bank Limited 846.80 + 0.90x 0.88
3 Agrni Bank Limited 864.60 + 0.70x 0.82
4 Rupali Bank Limited 491.40+ 0.20x 0.50
Source: Table 1
Table 3: Employee of State Owned Commercial Bank
Sl No. Name of Banks Number of Employees
2005 2006 2007 2008 2009
1 Sonali Bank Limited 23,933 23,273 22,542 21,839 21,839
Growth -2.76% -3.14% -3.12% 0.00%
2 Janata Bank Limited 15,321 14,772 13,860 13,379 13,122
Growth -3.58% -6.17% -3.47% -1.92%
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3 Agrni Bank Limited 11,938 11,793 11,345 10,988 11,443
Growth -1.21% -3.80% -3.15% 4.14%
4 Rupali Bank Limited 5,008 4,753 4,430 4,269 4,529
Growth -5.09% -6.80% -3.63% 6.09%
Source: Compiled from different issues of Annual Report of Sonali Bank Limited, Janata Bank Limited,
Agrani Bank Limited and Rupali Bank Limited.
Table 4: Trend equation and r2 employees of State Owned Commercial Banks
Sl No. Name of the Bank Ye= a + bx r2
1 Sonali Bank Limited 23,809.60 -562.20x 0.94
2 Janata Bank Limited 15,249.00 - 579.10x 0.97
3 Agrni Bank Limited 11,860.40 - 179.50x 0.57
4 Rupali Bank Limited 4,886.20 -144.20x 0.62
Source: Table 3
Table 5: Deposit of State Owned Commercial Banks
Sl No. Name of Banks Total Deposit (Tk. in million)
2005 2006 2007 2008 2009
1 Sonali Bank Limited 277,079.00 302,303.00 328,997.20 364,386.00 406,152.00
Growth 9.10% 8.83% 10.76% 11.46%
2 Janata Bank Limited 168,897.00 182,947.00 198,636.00 221,336.00 246,175.00
Growth 8.32% 8.58% 11.43% 11.22%
3 Agrni Bank Limited 130,840.00 128,920.00 135,920.00 146,810.00 166,280.00
Growth -1.47% 5.43% 8.01% 13.26%
4 Rupali Bank Limited 66,870.50 67,832.10 72,446.10 70,280.50 73,912.80
Growth 1.44% 6.80% -2.99% 5.17%
Source: Compiled from different issues of Annual Report of Sonali Bank Limited, Janata Bank Limited,
Agrani Bank Limited and Rupali Bank Limited.
Table 6: Trend equation and r2 of deposit of State Owned Commercial Banks
Sl No. Name of the Bank Ye= a + bx r2
1 Sonali Bank Limited 271,737.64 + 32,022.90x 0.99
2 Janata Bank Limited 165,009.20 + 19,294.50x 0.98
3 Agrni Bank Limited 124,000.00 + 8,877.00x 0.83
4 Rupali Bank Limited 66,961.80 + 1,653.30x 0.77
Source: Table 5
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Table 7: Trend equation and r2 of loan and advances of State Owned Commercial Banks.
Sl No. Name of the Bank Ye= a + bx r2
1 Sonali Bank Limited 223,082.50 + 4,416.31x 0.16
2 Janata Bank Limited 121,046.00 + 8,996.90x 0.62
3 Agrni Bank Limited 101,238.00 + 5,317.00x 0.82
4 Rupali Bank Limited 44,183.44 + 1,816.75x 0.93
Source: Own study
Table 8: Non Performing/Classified Loan of State Owned Commercial Banks
Sl No. Name of Banks Non Performing/Classified Loan (Tk. in million)
2005 2006 2007 2008 2009
1 Sonali Bank Limited 58,900.90 51,125.50 92,013.50 72,676.70 69,833.50
Growth -13.20% 79.98% -21.02% -3.91%
2 Janata Bank Limited 13,535.00 17,038.00 19,232.00 16,528.00 13,423.00
Growth 25.88% 12.88% -14.06% -18.79%
3 Agrni Bank Limited 26,920.00 27,820.00 31,790.00 25,490.00 23,740.00
Growth 3.34% 14.27% -19.82% -6.87%
4 Rupali Bank Limited 7,509.20 12,124.40 18,297.20 15,342.40 10,944.10
Growth 61.46% 50.91% -16.15% -28.67%
Source: Compiled from different issues of Annual Report of Sonali Bank Limited, Janata Bank Limited,
Agrani Bank Limited and Rupali Bank Limited.
Table 9: Trend Equation and r2 of % of Classified Loan to Total Loan of State Owned Commercial
Banks.
Sl No. Name of the Bank Ye= a + bx r2
1 Sonali Bank Limited 26.71 + 1.69x 0.093
2 Janata Bank Limited 13.53 -0.59x 0.116
3 Agrni Bank Limited 28.98 -2.16x 0.881
4 Rupali Bank Limited 24.23 + 1.32x 0.057
Source: Own study
Table 10: Net Profit after Tax of State Owned Commercial Banks
Sl No. Name of Banks Net Profit after Tax (Tk. In million)
2005 2006 2007 2008 2009
1 Sonali Bank Limited 208.00 -36,275.60 973.60 2,311.10 1,536.80
Growth -17,540.19% 102.68% 137.38% -33.50%
2 Janata Bank Limited 0.00 0.00 1,681.00 3,145.00 2,982.00
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Growth 168,100% 87.09% -5.18%
3 Agrni Bank Limited 1,630.00 1,940.00 860.00 2,650.00 1,110.00
Growth 19.02% -55.67% 208.14% -58.11%
4 Rupali Bank Limited 188.60 93.80 -11,017.50 874.10 1,668.50
-
Growth -50.27% 107.93% 90.88%
11845.74%
Source: Compiled from different issues of Annual Report of Sonali Bank Limited, Janata Bank Limited,
Agrani Bank Limited and Rupali Bank Limited.
Table 11: Trend Equation and r2 of Net Profit After Tax of State Owned Commercial Banks
Sl No. Name of the Bank Ye= a + bx r2
1 Sonali Bank Limited (-)1,449.81 + 412.44x 0.151
2 Janata Bank Limited (-)26.02 + 91.09x 0.881
3 Agrni Bank Limited 154.20 + 2.10x 0.002
4 Rupali Bank Limited (-)238.65 +37.40x 0.013
Source: Table 10
Table 12: Trend Equation and r2 of EPS of State-Owned Commercial Banks
Sl No. Name of the Bank Ye= a + bx r2
1 Sonali Bank Limited (-)288.96 + 77.70x 0.14
2 Janata Bank Limited (-)14.40 + 23.99x 0.77
3 Agrni Bank Limited 73.21 -5.87x 0.08
4 Rupali Bank Limited (-)190.84 +29.86x 0.01
Source: Own study
Table 13: Trend Equation and r2 of equity of State-Owned Commercial Banks
Sl No. Name of the Bank Ye= a + bx r2
1 Sonali Bank Limited (-)9,340.74 + 10,120.04x 0.455
2 Janata Bank Limited 2,957.60 + 2,335.34x 0.871
3 Agrni Bank Limited (-)5,391.54 + 4,395.24x 0.316
4 Rupali Bank Limited (-)944.64 - 1,980.85x 0.404
Source: Own study
Table 14: Trend Equation and r2 of assets of State-Owned Commercial Banks
Sl No. Name of the Bank Ye= a + bx r2
1 Sonali Bank Limited 327,368.70 + 55,261.66x 0.951
2 Janata Bank Limited 188,044.90 + 26,548.66x 0.998
3 Agrni Bank Limited 149,847.00 + 14,576.81x 0.897
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4 Rupali Bank Limited 74,372.98 + 3,082.35x 0.947
Source: Own study
Table 15: Return on Equity (%)of State Owned Commercial Banks
Sl No. Name of Banks Return on Equity (%)
2005 2006 2007 2008 2009
1 Sonali Bank Limited 3.30 N/A 4.48 9.46 5.04
2 Janata Bank Limited 0.00 0.00 29.60 34.70 21.51
3 Agrni Bank Limited -7.88 12.65 29.55 41.28 12.09
4 Rupali Bank Limited N/A N/A N/A N/A N/A
Source: Compiled from different issues of Annual Report of Sonali Bank Limited, Janata Bank Limited,
Agrani Bank Limited and Rupali Bank Limited.
N/A: Not Available
Table 16: Return on Assets (%)of State-Owned Commercial Banks
Sl No. Name of Banks Return on Assets (%)
2005 2006 2007 2008 2009
1 Sonali Bank Limited 0.06 -10.28 0.21 0.47 0.28
2 Janata Bank Limited 0.00 0.00 0.69 1.18 1.02
3 Agrni Bank Limited 1.05 1.26 0.46 1.42 0.52
4 Rupali Bank Limited 0.25 0.12 -13.52 1.06 1.91
Source: Compiled from different issues of Annual Report of Sonali Bank Limited, Janata Bank Limited,
Agrani Bank Limited and Rupali Bank Limited.
Table 17: Total Expense of State-Owned Commercial Banks
Sl No. Name of Banks Total Expense (Tk. In million)
2005 2006 2007 2008 2009
1 Sonali Bank Limited 15,900.00 20,125.00 20,287.00 25,004.00 30,255.40
Growth 26.57% 0.80% 23.25% 21.00%
2 Janata Bank Limited 9,842.00 12,059.00 13,559.00 13,919.00 15,496.00
Growth 22.53% 12.44% 2.66% 11.33%
3 Agrni Bank Limited 8,460.00 8,750.00 8,420.00 8,650.90 9,922.70
Growth 3.43% -3.77% 2.74% 14.70%
4 Rupali Bank Limited 3,947.90 4,583.70 4,529.30 4,704.60 5,143.60
Growth 16.10% -1.19% 3.87% 9.33%
Source: Compiled from different issues of Annual Report of Sonali Bank Limited, Janata Bank Limited,
Agrani Bank Limited and Rupali Bank Limited
Table 18: Profit to Expense Ratio
Sl No. Name of Banks Profit to Expense Ratio (%)
2005 2006 2007 2008 2009
1 Sonali Bank Limited 1.00 -180.25 4.8 9.24 5.08
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2 Janata Bank Limited 0.00 0.00 12.40 22.60 19.24
3 Agrni Bank Limited 16.08 22.17 10.21 30.63 11.19
4 Rupali Bank Limited 4.78 2.05 -243.25 18.58 32.44
Source: Compiled from different issues of Annual Report of Sonali Bank Limited, Janata Bank Limited,
Agrani Bank Limited and Rupali Bank Limited.
Table 19: Trend Equation and r2 of Net Asset Value Per Share of State-Owned Commercial Banks
Sl. No. Name of the Bank Ye= a + bx r2
1 Sonali Bank Limited -141.33 + 123.20x 0.26
2 Janata Bank Limited -8.99 + 82.19x 0.35
3 Agrni Bank Limited -673.72 + 263.42 0.79
4 Rupali Bank Limited -75.82 + 157.00x 0.39
Source: Own study
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