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Determinants of bank profitability in a developing economy: empirical evidence from Bangladesh

Sufian, Fadzlan and Habibullah, Muzafar Shah (2009) Determinants of bank profitability in a developing economy: empirical evidence from Bangladesh. Journal of Business Economics and Management, 10 (3). pp. 207-217. ISSN 2029-4433 (O), 1611-1699 (P)

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This study seeks to examine the performance of 37 Bangladeshi commercial banks between 1997 and 2004. The empirical findings of this study suggest that bank specific characteristics, in particular loans intensity, credit risk, and cost have positive and significant impacts on bank performance, while non-interest income exhibits negative relationship with bank profitability. During the period under study the results suggest that the impact of size is not uniform across the various measures employed. The empirical findings suggest that size has a negative impact on return on average equity (ROAE), while the opposite is true for return on average assets (ROAA) and net interest margins (NIM). As for the impact of macroeconomic indicators, we conclude that the variables have no significant impact on bank profitability, except for inflation which has a negative relationship with Bangladeshi banks profitability.

Item Type: Article (Journal)
Additional Information: 6678/5250
Uncontrolled Keywords: banks, profitability, multivariate regression analysis, Bangladesh
Subjects: H Social Sciences > HG Finance > HG1501 Banking
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Dr. Fadzlan Sufian
Date Deposited: 29 Nov 2011 15:55
Last Modified: 20 Dec 2011 16:07
URI: http://irep.iium.edu.my/id/eprint/5250

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