The study designed to investigate bank specific and macroeconomic determinants of profitability considering 299 observations of 35 banks in Bangladesh during 2003 to 2013. The investigation process considers all types of local Bangladeshi banks, OLS fixed effect and two step system GMM model. The results report that credit risk, cost efficiency, GDP growth and real interest rate effects profitability negatively; and capital adequacy, liquidity, size, inflation and stock market turnover effect profitability positively. The results further find that both development banks and private commercial banks are more profitable than public commercial banks in Bangladesh. Furthermore, the study finds that ROAA is most preferred measure of profitability. The study formulates some significant policy implications for improving the profitability of the banking sector of Bangladesh.

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The study aims to answer the research question of what type of banks between Islamic and Conventional banks are doing well on bank level performance in Bangladesh? In order to answer the research question the study uses binary logistic regression. Using 223 observations of 23 convention banks and 7 Islamic banks of Bangladesh during 2003 to 2013, the study shows an existence of a significant difference between conventional and Islamic bank in Bangladesh on profitability, credit risk, capitalization and bank size. The investigation further finds that profitability, efficiency, liquidity and size of Islamic banks are lower than conventional banks in Bangladesh. However, the results confirm that Islamic banks have higher capitalization and better credit risk management than conventional banks in Bangladesh. The study incorporates some significant policy implications for Islamic banks.

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