Abstract
The purpose of this study is to assess the impact of capital adequacy, operating efficiency, credit and asset management on profitability performance. For this study, a total of 13 Bangladeshi private commercial banks and their annual reports (2015-2019) were considered. Return on assets (ROA) and return on equity (ROE) were used as profitability performance. Descriptive, correlation and multiple regression statistics were used. Correlation results showed that asset management (AM) and credit deposit (CD) were positively and significantly correlated with return on assets (ROA). Regression result revealed that operating efficiency (OE) was negatively significant with return on assets (ROA) and return on equity (ROE). Again credit deposit (CD) was positively significant with return on assets (ROA) and return on equity (ROE). It was also revealed that asset management (AM) was positively significant with return on assets (ROA) and capital adequacy (CA) was insignificant with return on equity (ROE). But a simultaneous significant impact was found on return on assets (ROA) and return on equity (ROE). And recommendations were to manage credit, deposit, capital, expense and asset efficiently and to concentrate on optimizing assets for long run survival in the market. Keywords: Asset management, Capital adequacy, Credit deposit, Operating efficiency, Profitability performance DOI: 10.7176/RJFA/13-2-07 Publication date: January 31 st 2022
Highlights
Banking sector is one of the leading financial sectors for a country
The independent variables are used as follows: i) Operating efficiency which is measured by Operating expenses to operational income ii) Asset management which is measured by total revenue to total assets ii) Capital adequacy which is measured by equity to asset iv) Credit deposit which is measured by credit to deposit
The aim of this study is to measure the impact of operating efficiency, asset Management, Capital adequacy and credit deposit on profitability performance
Summary
Banking sector is one of the leading financial sectors for a country. It plays an important role in the economic development of a country. To survive in the long run it is needed to analyze the performance of any organization. It helps an organization to identify the strength and shortcomings and to take necessary actions what to do or should be done in the future. To be an important part of economy banking sector is needed to be analyzed performance. Profitability, efficiency and solvency reports are the financial tools to analyze performance. With analyzing financial performance tools, it is possible to represent how a firm is using its assets and equities and managing liabilities
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