Financial Crises in State Owned and Private Commercial Banks in Bangladesh: A Comparative Analysis

Kawsar Jahan (), Mohammod Akbar Kabir (), Farjana Nur Saima () and Md. Nasim Adnan ()

Business and Economic Research, 2019, vol. 9, issue 2, 146-159

Abstract: Recently the performance of banking industry is one of the much talked issues in the history of Bangladesh. Predicting the factors of financial crises in banks is very much important as this sector is facing a crises moment now. This study examined the driving factors of financial crises in banking sector using panel data consisted of five year observations (2012-2016) for each of 28 PCBs listed in Dhaka Stock Exchange (DSE) and 6 State-Owned Commercial Banks (SCBs). Financial crisis is measured by Altman¡¯s Z-score and Pooled Ordinary Least Square (Pooled OLS) has been applied to find out the factors necessary to condense financial crisis in banks. The study found that SCBs and listed PCBs in Bangladesh are facing financial crisis on the basis of Altman¡¯s Z-score model. Results of the analysis postulated that CRAR, NIIR and NINTR significantly contribute to lessen financial crisis in listed PCBs and also in SCBs. Therefore, the study suggests the regulatory authorities, including stakeholders and researchers to taking into account the findings of the study and to be more alert of the operations of SCBs and PCBs in order to steps forward the performance of this sector as well development of the country in the coming future.

Keywords: Financial crisis; Listed PCBs; SCBs; Pooled OLS; Altman¡¯s z-score (search for similar items in EconPapers)
JEL-codes: G01 G21 G33 (search for similar items in EconPapers)
Date: 2019
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