Commercial Banks In Bangladesh Research Articles

First and second-generation commercial banks in Bangladesh: A comparative financial analysis

Purpose: This study assesses the overall performance of commercial banks in Bangladesh by classifying them into first- and second-generation groups. Research Methodology: The investigation encompassed secondary data from 2016 to 2020, along with a meticulous examination of the ratios of ten banks during that timeframe. Standard software such as the Microsoft Office package was utilized for conducting horizontal, vertical, and rational analyses. Return on assets (ROA), return on equity (ROE), and net profit margins are the primary metrics used to assess overall performance. Results: Research indicates that the first generation excels in certain instances, while the second generation performs at its peak capacity in other cases. Therefore, a comprehensive outcome exists. Implications: These indicators offer a concise and influential message to all stakeholders that may shape their decision-making process. Limitations: It may be beneficial to consider a longer timeframe and gather insights from interviews with industry professionals for subsequent studies. Other factors to consider include customer insights, industry conditions, the nation's economy, monetary policy, and the global trade situation. Novelty: This study focuses on the influence of employee retention on organizational performance in a service-oriented government institution.

Impact of regulatory capital on bank interest margins: Moderating role of default risk

The recent pandemic and aftermath debate regarding bank interest margins deserve special attention and have become policy dialogue in emerging economies. However, the previous literature's findings were largely inconclusive and ignored influential variables such as the impact of default risk on bank interest margins. Using a two-step system GMM estimation considering 32 Bangladeshi commercial banks from 2000 to 2022, we produce robust evidence that higher regulatory capital restrictions reduce the bank interest margin, while increased default risk induces the bank interest margin. The impact intensity during the COVID pandemic is higher than in the pre-COVID period. Moreover, we find the synergy effect of regulatory capital and default risk assists in reducing the bank interest margin. Bank margin persistently fell during the capital market crash period, whereas it rose in the financial crisis period. We cast several robustness tests to confirm our main findings. These findings could generate important implications for bank stakeholders and policymakers.

Profitability measurement of selected Islamic Shariah-based private commercial banks in Bangladesh: A comparative Study

The purpose of this study is to analyze the profitability of five selected five Islami banks with a Shariah foundation and to determine whether these banks are more or less profitable. This study makes use of secondary data that was gathered from selected banks' annual reports between 2013 and 2022. This study employed a parametric approach; comparisons were assessed using descriptive analysis; the ANOVA test was used to assess reliability; and multiple regressions was utilized to assess impact. SPSS version 2014 is utilized for multiple regression analysis, and Excel 10 is used for ANOVA tests. The results indicate that the profitability of the selected banks is fairly high, with every bank under examination achieving favorable outcomes. The percentage of deposits with assets and the distribution of assets among the sample banks are not moderate. The inadequate asset allocation of FSIBPLC is indicated by its low return on assets. Furthermore, the bank has a deficiency in the area of net profit margin (NPM). Additionally, SIBL's debt collection and repayment are inadequate. Investors will be deterred from investing by the significant variations in return on equity found in almost every bank during the research period. Reducing overhead costs and enhancing the appropriate distribution of loans and advances will boost operating income and net profit efficiency. Above all, FSIBPLC and AIBPLC have fared well across the board. To optimize their profitability, the three remaining banks—IBBPLC, SIBL, and UBBPLC—had to step up their efforts.

Effectiveness of internal auditing from the lens of internal audit factors: empirical findings from the banking sector of Bangladesh

Purpose This study aims to assess the impact of determinants on the effectiveness of internal audit (IA) within the banking industry of Bangladesh. Design/methodology/approach The data was obtained through 152 survey questionnaires from a total of 43 privately owned and six state-owned commercial banks in Bangladesh. The analysis was conducted using structural equation modeling. Findings The findings demonstrate that the independence of internal auditors and the quality of IA substantially impact enhancing the efficiency of IA. On the other hand, the competence of internal auditors and management support in IA functions do not significantly impact the effectiveness of IA. Practical implications The study’s findings may have significant policy implications for the government, regulators, internal auditors, management committees and other stakeholders in establishing programmes to enhance the efficacy of IA as a component of banking audit management reforms. Originality/value This study makes three distinct contributions to the existing literature. Firstly, previous literature focused on the determinants affecting the external audit efficiency of the public companies and banking sectors in Bangladesh (Hasan, 2018; M. M. U. Reza, 2021). In this study, the author enhances the research by presenting empirical findings on the IA effectiveness of banks. Secondly, the author expands the research by incorporating both private and state-owned commercial banks as samples. Thirdly, the study is unique given that it investigates the effectiveness of IA in response to the recent financial scandals in the banking industry of Bangladesh (The Daily Star, 2023).

Accounting Information System as the Predictor of the Performance of Private Commercial Banks in Bangladesh

Accounting Information System as the Predictor of the Performance of Private Commercial Banks in Bangladesh

Effect of Leadership Behaviors and Job Satisfaction on Organizational Citizenship Behavior of Private Commercial Banks in Bangladesh: A Conceptual Framework

Effect of Leadership Behaviors and Job Satisfaction on Organizational Citizenship Behavior of Private Commercial Banks in Bangladesh: A Conceptual Framework

Evaluation of the contribution of the automated accounting information system to the managerial decision-making process in the commercial bank of Bangladesh

Accounting Information Systems (AIS) are becoming widespread among Bangladeshi banks. The purpose of this study is to assess how automated AIS affects Bangladeshi commercial banks. Purposeful sampling and a randomized block design were used to disseminate questionnaires to 400 respondents from Chattogram, Bangladesh, a commercial port city. Five-point Likert scale close-ended questions assess eight aspects of AIS usage and benefits: infrastructure, technological resources, understanding ability, operational comparability, relevance, reliability, decision-making, and organizational performance. Descriptive analysis, Kolmogorov–Smirnov test, Shapiro-Wilk test, factor analysis with Kaiser-Meyer-Olkin test, Cronbach's alpha, one-sample Wilcoxon Signed Rank Test, Kendall's tau-b Correlation Coefficient, Mann-Whitney test, Kruskal-WallisH test, and structural equation model were performed using MS Excel 2016, IBM SPSS Statistics 26, and IBM SPSS. The model was validated using convergent and discriminant validity tests. The study found that technological resources, operational comparability, relevance, and dependability influence AIS-based decision-making, while infrastructure and understandability do not. Private banks and AIS-trained personnel make more AIS-based decisions than public banks and non-AIS-trained workers. Regular and frequent decision-makers use AIS more than sporadic decision-makers. There is no effect of gender or job experience on AIS-based decision-making. Finally, AIS-based decision-making improved organizational performance. Therefore, the study results may assist Bangladeshi commercial banks in adopting AIS.

Analyzing the Effects of Macroeconomic Factors on the Financial Performance of Bangladeshi Commercial Banks

Since banks mobilize financial resources across the economy, they are expected to be critical in bringing about financial stability and economic progress. The purpose of this research was to determine the impact of macroeconomic variables on the financial performance of commercial banks in Bangladesh. From the World Bank website, secondary data were gathered for the fiscal years 2010 through 2021. Correlation, multiple linear regression, factor analysis, and model selection criteria were utilized for this study. From the correlation analysis, it was observed that the inflation rate was significantly and positively correlated with the financial performance of commercial banks in Bangladesh. From the multiple linear regression analysis, it was seen that import, exchange rate, and inflation rates have a substantial impact on Bangladesh's commercial banks' financial performance. From the factor analysis, it was observed that GDP and imports are highly correlated with Bangladesh's commercial banks' financial performance. Based on the model selection criteria, it was discovered that the model including all variables is the best. The government, other researchers, bank managers, possible investors, financial experts, and anybody else involved in Bangladesh's banking sector should all take note of the findings.

Influence of Corporate Social Responsibility on Financial Performance of Listed Private Commercial Banks in Bangladesh: An Econometric Analysis

Key objective of this study was to measure the role of CSR on corporate financial performance in Bangladesh. It has measured the performance of all (30 in 2015) listed private commercial banks (PCBs) of Bangladesh. Those organizations were studied for a ten-year period ranging 2011-2020. The statistical techniques of analyzing panel data especially OLS, random effect, fixed effect, GMM and dynamic GMM methods have been used. The econometric model has been developed where CSR expenditure is a dependent variable and financial performance indicators of the firm (e.g. ROA, ROE, TobinQ, EPS and market price of share) are considered as independent variables. Data analyses show that CSR has a positive effect on the corporate financial performance in Bangladesh.

Impact of Corporate Governance on Non-Performing Loans of Commercial Banks in Bangladesh

The paperinvestigates the nexus between corporate governance and the levels of non-performing loans (NPL) of commercial banks in Bangladesh based on the sample of 10 private commercial banks for 10 years covering from 2012 to 2021. A number of econometric models such as pooled OLS, fixed effect, random effect, cross-sectional GLS, and one- step system GMM approach were employed in our analyses. From the observed estimated coefficients, the availing of credit rating from the three renowned credit rating agencies had a significant negative impact on non-performing loans under pooled OLS, GLS, and random effect. Board size had a significant negative relationship under GLS while bank size had a significant positive influence. Institutional ownership had a significant negative influence and government ownership had a significant positive influence under the fixed effect model. From the estimated coefficients observed from the one-step system GMM, only director’s ownership is significantly lessening non-performing loans, while board meetings and stock-exchange listed banks had a significant positive impact. All other coefficient values under the one- step GMM estimation except for government ownership and employment of big four affiliated auditors as external auditor was found to adhere to our hypothesized impact.

Are Larger Banks Performing Better than Smaller Banks in Bangladesh?

This paper examines the relationship among bank size, net profit after tax and net interest income of 41 commercial banks in Bangladesh from 2012 to 2021. The study develops six hypotheses to diagnose the relationship between bank size and net profit or net interest income from the perspective of lag period data, generation wise data, and yearly data. Convenience sampling has been used, and the data is collected for the period 2012 to 2021 that considers all four generations of banks and thus the data set includes 410 firm year observations. After conducting OLS regression, it turns out that bank size positively impacts net interest income and net profit after tax. Overall, the correlation between net interest income and net profit after tax with bank size is significant revealed by examining the value of R2 and adjusted R2. We suggest testing with some other relevant variables (qualitative) which may produce some insightful thoughts and thus opens up the door of future research. Finally, it can be concluded that bank size is a self-sustaining attribute

EVALUATION OF TRAINEES’ REACTION TO TRAINING PROGRAMS

In the contemporary workplace, where diversity in learning styles and preferences is paramount, understanding and enhancing the effectiveness of training programs has become critical for organizational success. This study investigates trainee reactions to employee training programs, emphasizing the dimensions of Perceived Training Efficiency (PTE), Perceived Trainer Performance (PTP), and Perceived Usefulness of Training (PUT). The research employs a quantitative approach, surveys 381 employees from eight private commercial banks in Bangladesh, and uses a structured questionnaire with a Likert scale. The study utilizes descriptive and inferential statistics. Findings reveal positive perceptions in terms of training efficiency and trainer performance. However, the perceived usefulness of training shows room for improvement. The statistical significance of the results confirms their applicability to a broader population. The study's implications suggest a need for personalized training approaches that align with diverse learning needs and career aspirations. Continuous feedback mechanisms are advocated to refine training programs in real time, emphasizing the importance of adaptive strategies in organizational training initiatives. This study acknowledges its limitations and calls for multiple evaluation methods and comparative analysis for the assessment of training programs.

“Go green” – evaluating the roles of environmental concerns, environmental social norms and green technology in fostering pro-green banking behaviors

Purpose The purpose of this paper is to evaluate the relationship between bankers’ perspectives and their pro-green banking behaviors (i.e. intentions). Specifically, how do bankers’ perspectives on environmental concerns, environmental normative structure and green technology affect their intentions toward G-banking activities? Design/methodology/approach A theoretical framework of the theory of bounded rational planned behavior (TBRPB) as its foundation was established. Using measurement scales to measure different aspects of environmental concern, environmental normative structure, green technology, attitudes, perceived behavioral control and subjective norms, a survey instrument was developed to examine the various associations implied by the model of TBRPB. Data were collected from the bankers of selected commercial banks in Bangladesh following the random sampling procedure. The data were analyzed using the partial least square structural equation modeling technique. Findings Findings indicate that all of the predictors appear to be robust in predicting the G-banking intention of the sampled bankers in Bangladesh. The results also show that attitudes, subjective norms and perceived behavioral control have significant mediating effects toward bankers’ bounded rational G-banking intention. Research limitations/implications There are a few limitations in the study. First, the study considers environmental concerns as an antecedent of the attitude of bankers toward G-banking activities. Future studies can explore other variables related to environmental problems to study G-banking adoption and practices. Second, this study only considers the private conventional bankers as respondents to the survey to assess G-baking intention. In the future, other types of bankers, such as Islamic bankers and public banks’ bankers could be included in the survey to explore G-banking practices. Finally, this research has been done in a developing country-context. Practical implications In this study, environmental concerns of bankers appeared to be highly significant predictors to influence their attitudes toward bounded rational G-banking intention. Similarly, the social normative structure also appears to be a robust antecedent of subjective norms to influence bounded rational G-banking intention of respondent bankers. Finally, green technology or bakers’ personal and skill-related ability to control bounded rational G-banking intention also appeared to be a strongly significant predictor of green banking activities. All this evidence implies that respondent bankers in the sample responded positively to provide their positive intention toward G-banking activities based on their environmental concern. Social implications Important social implication of the current study is G-banking practices can help reduce carbon emissions and other pollutants which would enrich overall environmental sustainability and ecological conditions. Originality/value Few studies are directed on G-banking perspective in Bangladesh. This research is one of the empirical studies which will certainly add values for the clients, institutions and policymakers in banking paradigm.

Effects of ownership on the relationship between bank capital and financial performance: evidence from Bangladesh

The financial performance of banks relies heavily on properly utilizing their capital. However, bank ownership can have varying effects on the relationship between financial performance and capital. This study delves into this relationship by examining the impact of ownership on financial performance and bank capital. The study analyzes data from 44 commercial banks in Bangladesh and uses a two-step system generalized method of moments to address heteroscedasticity and autocorrelation issues. Unlike previous studies, this study confirms the significant effect of ownership on the relationship between bank financial performance and bank capital. The study's main findings are: (1) an inverted U-shaped relationship exists between bank capital and financial performance, implying that increasing capital can improve and reduce financial performance. (2) Private and Islamic commercial banks perform better than state-owned and conventional banks. (3) private-owned and Islamic commercial banks with higher capital are more likely to achieve higher profitability and financial success, while state-owned and conventional commercial banks with higher capital show lower profitability and weaker financial performance. Overall, this study offers significant practical implications for academics, researchers, and regulators interested in leveraging these findings.

Impact of Bank Liquidity and Macroeconomic Determinants on Profitability of Commercial Banks in Bangladesh

This paper aims at investigating the relationship between profitability and liquidity of the State-Owned Commercial Banks of Bangladesh. An important motive of this study is to provide valuable insights into how liquidity influences profitability. There are various research papers on liquidity exposure and the profitability relationship of banks in Bangladesh. But those researches are separately conducted for conventional or Islamic banks or there is a comparative analysis of both banks. But there is little research on the state-owned banking industry. During the Pandemic the banking industry of Bangladesh was affected severely in respect of liquidity risk and it also affected its profitability. There is no recent paper focused on this study. So, this study will try to identify the significant factors that affect the liquidity of a bank and its profitability. In this regard, 10 years’ data from Annual Report of the State-Owned Commercial Banks and macroeconomic data from Bangladesh Bank website and several journals have been collected from 2012-2021. This study primarily aims at exploring the liquidity-profitability relationship using econometric model. Loan to Deposit ratio is used measuring liquidity of a bank. Other control variables Loan Loss Provision to Total Asset (LLPTA) for credit risk, Equity to Total Asset (EQTA) for capital efficiency, Operational expense to Total Asset (OPEXTA) for operational efficiency, Total Asset (TA) for Bank size, Non-performing Loan (NPL) for asset quality, Gross Domestic Product (GDP) for economy size, Inflation (INF) for consumer price index, Interest Rate (INT) for opportunity cost, and the Unemployment rate for measuring labor force. The major finding of this study show that there is a significant positive relationship between liquidity risk and profitability. Among bank-specific variables credit risk, capital efficiency, and bank size have a significant relationship with Profitability which also supports the theory. Macroeconomic variables like interest rate, inflation rate, and GDP have a significant relationship with profitability which also supports the theory. Here BDBL and BASIC should have maintained the liquidity standard mentioned by Bangladesh Bank and BIS to mitigate their liquidity crisis. This study also shows that there is no severe effect of the COVID pandemic on the State-Owned Commercial Banks of Bangladesh. The findings of this study will provide valuable insights for banks and regulators to make informed decisions regarding risk management, liquidity decision, capital allocation, and strategic planning.

Impact of green HRM practices on bank employee service behaviors

This study aims to examine the influence of green human resource management (HRM) practices on the service behaviors of bank employees operating in the banking sector of Bangladesh. The study endeavors to offer valuable insights into the effectiveness of green HRM practices in enhancing practices and employee service behaviors in the banking sector. The results indicate that green human resource management practices have a beneficial influence on employee service behaviors by green knowledge sharing, green training and development, green performance appraisal, green reward system. This study also emphasizes how green HRM practices affect banks in terms of organizational sustainability, employee motivation, talent acquisition and retention, and the necessity of ongoing evaluation and improvement. Moreover, the current study used convenience sampling techniques to collect data from 258 workers of several commercial banks in Bangladesh using a self-reported questionnaire that had been modified from other studies. 95% confidence interval was used to accept the hypotheses during regression analysis. The results show that each and every hypothesis is supported, whereas hypothesis tests were analyzed using SPSS version 26.0. The results show that employees’ knowledge sharing tendency, training facility, performance appraisal and reward system have a significant and positive impact on bank employees’ service behavior. This study may contribute to the growing subject of sustainable HRM and offers useful advice for banks looking to include environmental sustainability into their HRM plans to spur progress and enhance service.

Evaluating the success of green accounting practices in the banking sector of Bangladesh

Green accounting has recently become more popular among Bangladeshi banks in order to reduce environmental damage and maintain ecological balance. Therefore, the main objective of this study is to evaluate the success of green accounting adoption by commercial banks in Bangladesh. Data were collected from Bangladeshi banks and subsequently analyzed using the Structure Equation Model (SEM), Spearman rho correlation, one-sample Wilcoxon signed rank test, Mann-Whitney test and Kruskal-Wallis test to examine factors influencing the present green accounting practice and performance of banks. The study results showed that green accounting knowledge and environmental knowledge contribute significantly to the present green accounting practice in Bangladesh. On the other hand, the policy of Bangladesh bank does not contribute significantly to the present green accounting practice. Additionally, the study's findings also showed that Bangladeshi banks' current use of green accounting practices and their financial performance are positively correlated. According to the study's findings, increasing the use of green accounting practices might improve their performance and improve the efficiency of financial transactions in Bangladeshi banks. The study outcomes may be used to popularize green accounting practices among banks to increase their performance and also save the ecosystem.

Performance appraisal of selected first-generation private commercial banks in Bangladesh

The motive of this study is to appraise the performance of selected first-generation private commercial banks in Bangladesh. Both quantitative and qualitative analyses were used. The performance of the banks was tested through several variables, such as Deposits, Investments, Loan-to-Deposit ratio, Imports, Exports, Return on Assets (ROA), Return on Equity (ROE), Net income, Earnings per Share (EPS), etc. These variables were then examined using statistical measures, such as growth percentage, trend equations, the square of the correlation coefficient, and a correlation matrix. Sixty trend equations and R-squared were tested for twelve different banks’ activities. From the study, it has been found that banks are facing some challenges due to ongoing economic crisis and liquidity crisis. However, all the banks are trying to recover from the economic crisis, and some banks are doing very well, while some banks are facing hardships to cope with the situation. The findings of the trend analysis and correlation matrix of the study are expected to direct the first-generation commercial banks of Bangladesh to improve their performance. We are quite optimistic that if the selected banks tried to overcome the identified problems, then their performance will improve, and they may give rise to accelerated development of Bangladesh’s economy.

AUTHENTIC LEADERSHIP'S INFLUENCE ON TRAINING EFFECTIVENESS: A BANGLADESH COMMERCIAL BANKING PERSPECTIVE

This study investigates the influence of authentic leadership on training effectiveness within the context of commercial banks in Bangladesh. Authentic leadership, characterized by transparency, self-awareness, and ethical behavior, plays a pivotal role in shaping organizational cultures and enhancing employee performance. Utilizing a mixed-methods approach, this research combines surveys, interviews, and performance metrics to assess the impact of authentic leadership on training outcomes. Findings suggest that authentic leadership positively correlates with improved training effectiveness, fostering a culture of trust, openness, and personal growth. The study offers valuable insights for commercial banks aiming to optimize their training programs through leadership development.

The Impact of Corporate Governance on Financial Performance of Private Commercial Banks in Bangladesh

Corporate governance is imperious to the banking sector's growth. The study aims to explore how corporate governance mechanisms impact certain aspects of financial performance. This study has taken five listed conventional PCBs with a five-year study period from 2016 to 2020 using the purposive sampling technique. The influence of various CG mechanisms on financial performance attributes has been investigated through the use of multiple regression analysis. The study findings demonstrate that equity ratio, log total assets, and log listing age out of eight variables have a significant influence on NPM and ROA, while the other five variables revealed insignificant influence. On the other hand, ROE was influenced by log total assets and log listing age, but insignificant influence was found in the remaining six variables. Moreover, log listing age revealed a significant impact on EPS, whereas an insignificant influence has been observed in the case of the remaining seven variables. The study recommended that corporate governance must be adequate and transparent for the sake of pertinent stakeholders in the banking sector.