Abstract

The aim of this study is to examine the performance of local commercial banks of Bangladesh. Considering the coefficients and their significance level, it can be concluded that Net Interest Margin (NIM), Return on Equity (ROE), Net Profit Margin (NPM) and Earning per Share (EPS) play an important positive role in determining commercial banks’ overall profitability. The suggestion of this study for future analysis is to introduce additional bank specific, industry specific and macroeconomic variables in order to get more appropriate results. In order to determine the profitability of the private sector commercial banks of Bangladesh, this report took into consideration ten banks and measured the profitability by the Return on Asset (ROA). From the two regression models, the strongest one was the internal measure of profitability that has been done by taking Return on asset (ROA) as the dependent variable. This study will help the management to look into areas that are relevant and can thus exert potential and strong impact on their banking profitability. Since, this study breaks away from the traditional ratio analysis, which is retrospective and based on accounting rather than economic data; it can be beneficial as a base for other researches.

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