Bank-Specific and Macroeconomic Determinants of Profitability of Bangladesh's Commercial Banks

Fadzlan Sufian and Fakarudin Kamarudin
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Fakarudin Kamarudin: Faculty of Economics and Management, Universiti Put ra Malaysia

Bangladesh Development Studies, 2012, vol. 35, issue 4, 1-29

Abstract: The study identifies bank specific characteristics and macroeconomic determinants of profitability in the Bangladesh’s banking sector over the years 2000 to 2010. The study uses relevant data fr om a sample of 31 commercial banks in Bangladesh. The determinants are identified using multiple regression analysis. The generalised least squares method has been applied consisting of fixed effect model rather than random effect model and tested by Hausman test. The results bring out five bank specific determinants that are important in influencing profitability: capitalisation, non1traditional activities, liquidity, management quality, and size of the bank. Besides, three macroeconomic determinants significantly influence profitability including growth in GDP, inflation and concentration.

Keywords: Bank1specific Characteristics; Macroeconomics; Bank Profitability; Multiple Regression Analysis (search for similar items in EconPapers)
JEL-codes: G01 G21 N25 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (36)

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