A Study on Determinants of Profitability of Private Banks in Bangladesh: Empirical Evidence from Panel Data Estimation.



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Submitted Jul 16, 2023
Published Sep 26, 2023
10.24018/ejdevelop.2023.3.5.289

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This study seeks to reveal the determinants of profit of private banks in Bangladesh using a panel data set spanning from 2005-2018. In my study, I used Return on Equity (ROE) and Return on Assets (ROA) as the proxies for profit of banks. Using the panel data model, the study found that Loan to Asset Ratio (LAR) and Capital Adequacy Ratio (CAR) had a positive association with the profit of banks, while the growth rate of Gross Domestic Product (GDP) had a negative effect on banks profit. But the other macroeconomic variable, inflation, didn’t have any impact on profit for banks operating in Bangladesh. The findings of the study can help the management of banks and policymakers achieve efficiency and earn higher profits.

Keywords: CAR INF ROA ROE

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