Business Research &

Methods.
“ Bank Specific and macroeconomic
determinants of commercial bank
profitability ”
 Introduction
• Our research’s main purpose is to find profitability, performance, capital structure of
commercial banks in Bangladesh impact their financial performance.

• Based on the work we replicated a conceptual framework from previous studies done in
the field and observed how the model works.

• The time period for the data was 5 years, from 2012 to 2016.After that EVIEWS software
was used to perform regression analysis on the accumulated 5 years’ data of five different
private commercial banks of Bangladesh.
 Problem Statement

• Bangladesh is a third world country with an under developed banking

system, particularly in terms of the services and customer care provided
by the government run banks.
• The main problems in commercial banks are lack of technology, lack of
professionalism, lack of proper service and extra charges than other
banks.
• Competition in the sectors increasingly going to the equity market to rise
funding. It indirectly affects contribution to market & capital ,risking their
position through proprietary trading and position taking.
 Purpose of the study

• The purpose of this study is to acknowledge whether capital structure is an appropriate

policy to bring in the financial sector especially in the banking sector of Bangladesh.
• To investigate the relationship between capital structure variables and profitability of
core business operation of commercial banks in Bangladesh.
• To examine the impact of financing decision or capital structure on profitability of core
business operation of commercial banks in Bangladesh.
• Understand the impact of capital structure in banking industry.
• To conduct statistical applications while discovering the nature of the relationship
between the dependent & independent variable.
• Assess how capital structure affects: the firm efficiency (profitability).
 Hypothesis Question
Alternative hypothesis

Null hypothesis
 Research Design

• Data research plan

• Research question

• Monitoring method

• Causal study
 Sampling
 we have taken 5 banks out of 49 commercial banks.
 The banks are:
1. Ab Bank
2. City Bank
3. Trust Bank
4. Eastern Bank
5. IFIC bank
 We have collected the data from those 5 banks for last five years.
 Data Collection

• Testing the hypotheses:

 ROA taken as the dependent variable

 Asset size, capital adequacy, liquidity, deposit, economic activity, inflation rate, interest
rate are considered as the independent variables.

• ROA taken as the dependent variable

• Asset size, capital adequacy, liquidity, deposit, economic activity, inflation rate, interest
rate are considered as the independent variables.
Data Analysis

• Mean:

• Median:

• Maximum
:

• Minimum:
Correlation Matrix for Dependent and Independent Variables

• Asset size with ROA is 0.135902

• Capital adequacy and ROA have
positive correlation. ROA will
increase
• Liquidity and ROA have a
negative correlation; On the
other hand economic activity
and ROA have a positive
correlation. Inflation is 0.179593
which has a positive correlation.
• Interest rate -0.036945 which
has a negative correlation with
ROA.
 Regression Analysis
• This above table signifies the
summary statistics of the
variables of this study. We
uotations are commonly printed assuming our significance level
as a means of inspiration and to are 10% OR .1 so that we can
invoke philosophical thoughts test our independent variable
with dependent variable more
from the reader. specifically testing hypothesis.
• In our regression analysis R-
squared is 0.357900 or 36%
which indicates all independent
variables together explains
dependent variables.
Thank You 