Profitability and Credit Risk Management: A Comparative Study of Commercial Banks in Bangladesh

Abstract

This study examines Profitability and Credit Risk Management of Commercial Banks in Bangladesh. Information are collected from different news media, publication and some selected banks to describe present scenario of banking sector in Bangladesh. To analysis the profitability and credit risk management of banks after implementing the Basel II standard, we collect secondary data of five years (Y2007 to Y2011) from the Annual Report of the organizations. Horizontal and Vertical Analysis method are used to measure the profitability of the banks and interpret the Balance Sheet and Income Statement of the banks. Few bar-diagrams have been drawn to compare the performance among four banks. For this research, ROE, NPLR and CAR are calculated to evaluate the Credit Risk of the Banks. Using these three ratios, researchers construct the multiple regression models and use the F-test statistics.