Determinants of bank profitability for the selected private commercial banks in Bangladesh: A panel data analysis

Md Ariful Islam, Rezwanul Hasan Rana

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7 Citations (Scopus)
39 Downloads (Pure)


This study aims to investigate the determinants of profitability of fifteen selected private commercial banks in Bangladesh over the period 2005-2015. The study emphasizes on the internal factors that affect bank profitability. This research uses panel data to explore the impact of the nonperforming loan, cost to income ratio, loan to deposit ratio, commission fees, cost of fund and operating expenses on the profitability indicators of banks like return on asset and return on equity. The experimental outcomes have found strong evidence that nonperforming loan (NPL) and operating expenses have a significant effect on the profitability. Moreover, the results have shown that higher NPL may lead to less profit due to the provision of classified loans. Again, higher loan to deposit (LD) ratio and cost of fund contribute towards profitability, but their impacts are not significant in the private commercial banks of Bangladesh.

Original languageEnglish
Pages (from-to)179-192
Number of pages14
JournalBanks and Bank Systems
Issue number3
Publication statusPublished - 2017
Externally publishedYes

Bibliographical note

Copyright © Md. Ariful Islam, Rezwanul Hasan Rana, 2017. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.


  • bank
  • NPL
  • ROA
  • ROE
  • profitability
  • Bangladesh
  • operating expenses
  • panel data


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