Examination of Profitability in the Context of Bangladesh Banking Industry

Abstract

Loans are the riskiest asset of a bank, but these loans play a pivotal role in banks' profitability. Banks 'profitability depends on the results of some parameters and among them

Bank b Return on Equity, Market Size, Market Concentration Index, and Bank RiskMeasure are widely used and the same are investigated in the Bangladesh Banking Industry in this study for a period of the last six years. The data comes from the annual reports of individual banks listed in Dhaka Stock Exchange (DSE) and from the Bangladesh bankb published statistics book (Scheduled Banks Statistics). Correlation matrix and stepwise regression have been used for the purpose of data analysis. The analysisfinds that market concentration and bank b risk do little to explain bank b return on equity, whereas bankb market size is the only variable providing an explanation for banks return on equity in the context of Bangladesh.