An Evaluation of Financial Performance of Private Commercial Banks in Bangladesh: Ratio Analysis
نویسندگان
چکیده
Banks play an important role in the economic development of every nation. They have control over a large part of the supply of money in circulation. Since, the appearance of private commercial banks is the larger portion of the banking sector in Bangladesh, thus this study is intended to measure the performance of selected private sector banks (five), listed on both the Dhaka Stock Exchange and Chittagong Stock Exchange, in Bangladesh through extensive use of financial ratios that mainly indicate the adequacy of the risk based capital, credit growth, credit concentration, non-performing loan position, liquidity gap analysis, liquidity ratio, return on assets (ROA), return on equity (ROE), net interest margin (NIM), etc. Three indicators namely, Internal-based performance measured by Return on Assets, Market-based performance measured by Tobin’s Q model (Price/Book ratio) and Economic-based performance measured by Economic Value add has been used to measure financial performance of the selected banks. Annual time series data from 2008-2012 of the selected banks from their respective audited annual reports (secondary data) were employed in multiple regression analysis to apprehend the impact of bank size, credit risk, operational efficiency and asset management on financial performance measured by the three indicators, and to create a good-fit regression model to predict the future financial performance of these banks. Statistically, the hypothesis is claiming that Bank size, credit risk, operational efficiency and asset management have significant impact on financial performance of Bangladeshi commercial banks.
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