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Short-term determinants of banking profitability and financial sustainability of banks in Bangladesh_CQU.pdf (1.16 MB)

Short-term determinants of banking profitability and financial sustainability of banks in Bangladesh: An empirical study of COVID-19 effects

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posted on 2023-05-08, 01:14 authored by Farhana Begum, Kazi Saidul Islam, Sangida Akter Saroni, Muhammad Khalilur Rahman, Bibhuti Bhusan Sarker, Normah Omar
The purpose of this study is to examine the profitability and financial sustainability of banks in Bangladesh before and during COVID-19. The study compares the profitability and financial sustainability of 23 listed private commercial banks. The data for short-term periods before the COVID-19 and during the COVID-19 crisis we used. Financial ratios, descriptive statistics, correlation matrix and linear regression model estimations are used for the analysis of data. The mean values of ROA, ROE and NIM are found before the COVID-19 crisis as 0.0019, 0.0270 and 0.0054, and during the COVID-19 as 0.00128, 0.01856 and 0.00321 respectively. On the other hand, the mean values of NFLR, CCR, ICR, and OSR are found before COVID-19 as 2.0936, 6.852, 0.9314 and 0.4751, and during COVID-19 as -2.5961, 5.879, 0.7673 and 0.3587 respectively. The findings construe a significant impact of the unprecedented pandemic. Within a short period of time, sample banks’ profitability and financial sustainability deteriorated significantly. A key implication of our study is that the private-sector commercial banks in Bangladesh experienced severe financial difficulties during COVID-19 which impacted their profitability and financial sustainability. The findings of the study suggest that adverse economic events have substantial effects on the financial realities of financial institutions. The findings of the study are expected to be useful to both academics and policymakers.

History

Volume

20

Issue

3

Start Page

61

End Page

74

Number of Pages

14

eISSN

1810-3057

ISSN

1727-9232

Publisher

Virtus Interpress

Additional Rights

CC BY 4.0

Language

en

Peer Reviewed

  • Yes

Open Access

  • Yes

Acceptance Date

2023-04-21

External Author Affiliations

Universiti Teknologi MARA, Universiti Malaysia Kelantan, Malaysia; Uttara Bank Limited, Bangabandhu Sheikh Mujibur Rahman Science & Technology University, University of Rajshahi, Bangladesh

Era Eligible

  • Yes

Journal

Corporate Ownership and Control

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