This study investigates the influences of a set of financial ratios on non-performing loans and to show to what extent of listed commercial banks in Bangladesh. In this study, we applied an econometric model to find out correlations among financial ratios and a sample of 96 observations has been analyzed from 20 banks out of 30 listed commercial banks during 2010-2015. This paper mostly agrees with the existing literature that, credit-deposit ratio, net interest margin have a positive influence on the non-performing loans and capital adequacy ratio, return on assets have a negative influence on the non-performing loans. This research also reveals that, sensitive sector’s loan, priority sector’s loan have significant positive influence on the non-performing loans and unsecured loans, profit per employee, investment deposit ratio have significant negative impact on gross non-performing loan. The findings of this research would help commercial banks to maintain standard financial ratios in order to improve their loan qualities and it would be beneficial to the central bank to examine its existing policy in banking supervision relating to the ratios of regulatory requirements like capital adequacy ratio the banks shall maintain.
This paper investigates the relationship between working capital management and financial performance of Pharmaceuticals and Textile firms listed at the Dhaka Securities Exchange in Bangladesh. The data analysis was carried on ten Pharmaceuticals and Textile firms for a period of 2013 to 2017. Secondary Data was analyzed by applying Descriptive Statistics, Regression and Correlation analysis to findthe relationship of current ratio, inventory conversion period and average payment period with Return on Asset. The findings indicate that the Pharmaceuticals and Textile firms’ performance is influenced by the variables relating to working capital. There is a positive relationship between profitability and current ratioand Inventory Turnover period shows a negative relationship with profitability but Average payment period shows insignificant impact on profitability. The study concludes that there exists a relationship between working capital managementand financial performance of Pharmaceuticals and Textile firms in Bangladesh. The study recommends that for the Pharmaceuticals and Textile firms to remain profitable, they should employ working capital management practice that will help in making decisions about investment mix and policy, matching investment to objective, asset allocation for institution and balancing risk against profitability.
This article analyses the relationship among interest rate reforms, financial development and economic growth by using annual dataset for the period covering 1980–2014 for Bangladesh. The effect of interest rate reforms on financial development is examined using a financial deepening model, and the causal relationship between financial development and economic growth is examined, by including deposit interest rate as a third variable, thereby forming a simple trivariate causality model. The empirical results of cointegration and error correction models show that there is a positive effect of deposit rate of interest rate on financial depth in Bangladesh. Besides, multivariate Granger causality tests reveal that there is only one-way causality between financial depth and economic growth—the flow running from financial depth to economic growth. In addition, the study finds there is bidirectional causality between deposit rate of interest rate and economic growth, which is also confirmed by the pairwise Granger causality test. The inference of this study is that a deregulated deposit rate of interest will raise financial depth and eventually enhance the economic growth of Bangladesh. Therefore, the financial reforms should be directed towards accomplishing a more deregulated deposit rate of interest for progressive growth in the economy of Bangladesh.
This article seeks to examine the impact of the Bangladesh’s stock market development on its economic growth from the period of 1989-2012. We have used Johansen Cointegration test to estimate the long-run equilibrium relationship between the variables and the Granger causality test was conducted in order to establish causal relationship, while the model was estimated using the error correction model (ECM). Johansen co-integration test results show that the Bangladesh’s stock market development and economic growth are co-integrated. This indicates that a long run relationship exists between stock market development and economic growth in Bangladesh. The causality test results suggest a unidirectional causality from stock market development to the economic growth. On the other hand, there is no “reverse causation” from economic growth to stock market development. The evidence from this study reveals that the activities in the stock market tend to impact positively on the economy. It is recommended therefore that stock market regulatory authority should therefore address policy issues that are capable of boosting the investors’ confidence through improved policy formulation and creation of awareness.
Asset liability mismatch in balance sheet of Sonali Bank Limited, Bangladesh posed serious challenges as the bank was following the traditional methods of recording assets and liabilities at the book value. The liberalization process in the economy coupled with multifaceted global developments exposed banks for various kinds of risks viz. interest rate risk, liquidity risk, exchange risk, operational risk etc. which have direct impact on their operations, profitability and efficiency to compete with. The volatility in interest rate during the last decade has witnessed risk in earnings or capital due to movement of interest rates which has affected the overall profitability of banks. Hence, there is a need for accurate measurement and control of Interest Rate Risk associated with a bank's entire portfolio. This research paper makes an attempt to measure the Interest Rate Risk in Sonali Bank Limited by using Asset-Liability Mismatch, Relative Interest Sensitive Gap, Interest Sensitivity Ratio and Gap Analysis Technique. The findings revealed that Sonali Bank Limited, Bangladesh is greatly exposed to interest rate risk.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.