Impact of Liquidity Management on the Financial Performance of Selected State-Owned Commercial Bank in Bangladeshhttp://ar.cou.ac.bd:8080/xmlui/handle/123456789/3972026-09-06T22:59:14Z2026-09-06T22:59:14ZImpact of Liquidity Management on the Financial Performance of Selected State-Owned Commercial Bank in BangladeshHasan, Mehedihttp://ar.cou.ac.bd:8080/xmlui/handle/123456789/3982026-08-10T04:07:00Z2026-04-20T00:00:00ZImpact of Liquidity Management on the Financial Performance of Selected State-Owned Commercial Bank in Bangladesh
Hasan, Mehedi
This study looks at how certain state-owned commercial banks in Bangladesh perform financially in relation to liquidity management. Because it guarantees banks' capacity to fulfill short-term obligations while retaining profitability, liquidity management is an essential part of banking operations. The study examines the connection between financial performance as determined by Return on Assets (ROA) and liquidity indicators, with a focus on three significant state-owned banks. Panel data spanning several time periods was gathered from annual reports and secondary sources in order to accomplish the goals. Credit to Deposit Ratio (CDR), Current Ratio (CR), Loan Ratio (LR), and Statutory Liquidity Ratio (SLR) are important liquidity metrics employed in the study. Using Stata software, a number of statistical methods were used, including descriptive statistics, correlation analysis, regression analysis (Pooled OLS and Random Effects), variance inflation factor (VIF), heteroskedasticity test, and Hausman test. The results show that bank profitability is significantly impacted by liquidity management. In particular, there is a negative and statistically significant correlation between ROA and the Credit to Deposit Ratio (CDR) and Statutory Liquidity Ratio (SLR), suggesting that higher regulatory liquidity and excessive lending lower profitability. However, there are positive but statistically insignificant correlations between financial success and the Current Ratio (CR) and the Loan Ratio (LR). The Random Effects model seems more suitable for this investigation, according to the Hausman test. Overall, the study comes to the conclusion that improving the financial performance of Bangladesh's state-owned commercial banks requires preserving an ideal balance between profitability and liquidity. The findings have significant ramifications for policymakers and bank management in creating efficient liquidity management plans.
2026-04-20T00:00:00Z