Factors Influencing Profitability in the Bangladeshi CommercialBanking Sector

Abstract

This study explores the determinants of Bangladesh-based commercial banks’
profitability of commercial banks in an emerging economy, Bangladesh. For this study,
commercial banks’ annual report data [over the period 2013-2024] was used. Probable
determinants were shortlisted using empirical literature. The study uses return on asset
(ROA) and return on equity (ROE) as the dependent variable. Panel regressions were run
using fixed effects model and random effects model. The findings show a significant positive
relationship between asset quality and bank performance, and a significant negative
relationship between capital adequacy and performance across all baseline models.