http://ar.cou.ac.bd:8080/xmlui/handle/123456789/133 2026-05-28T19:08:05Z http://ar.cou.ac.bd:8080/xmlui/handle/123456789/252 Impact of Credit Risk Management on Profitability of Commercial Banks: An Estimation of Dynamic Panel Investigation from Bangladesh Eitu, Kanij Rukaiy a The profitability of commercial banks is influenced by a variety of internal and external factors. This study aims to identify and evaluate the bank-specific and macroeconomic determinants that affect the profitability of commercial banks in Bangladesh. The analysis is based on a dynamic panel data model using annual financial data from 10 commercial banks over a tenyear period, from 2014 to 2023. Return on Assets (ROA) and Return on Equity (ROE) are employed as the primary indicators of bank profitability. It providing a comprehensive measure of financial performance. The study considers a range of bank-specific factors, including the loan loss provision to total loan ratio (LLPTR), total loan to total asset ratio (TLTAR), total loan to total deposit ratio (TLTD), capital adequacy ratio (CAR), and non-performing loans to total loan ratio (NPLTL). In addition, key macroeconomic variables such as GDP growth rate (GDPGRR), inflation rate (INFR), exchange rate (ER), and real interest rate (RIR) are included to capture the broader economic environment. The empiricalfindings reveal that several bank-specific factors—specifically LLPTR, TLTAR, and CAR—exert significant influence on bank profitability, as do the macroeconomic variables INFR, ER, and RIR. These variables demonstrate a statistically significant relationship with both ROA and ROE, suggesting that both internal management decisions and external economic conditions play a critical role in shaping bank performance. The results indicate that prudent loan loss provisioning and effective capital management are critical for sustaining profitability, while efficient asset allocation further enhances performance. Conversely, the total loan to total deposit ratio (TLTD) and GDP growth rate (GDPGRR) do not show a statistically significant impact on profitability, indicating their limited predictive power in this context. For regulators, the evidence suggests that enhancing the supervisory framework around credit risk exposure and enforcing stricter capital adequacy standards could improve the sector's stability and profitability. The results of this study have practical implications for bank management, regulators, and policymakers, highlighting the need to strengthen capital adequacy, manage credit risk efficiently, and consider macroeconomic trends when formulating strategies to enhance the financial performance and stability of commercial banks in Bangladesh. 2025-05-26T00:00:00Z http://ar.cou.ac.bd:8080/xmlui/handle/123456789/250 The Effect of Capital Adequacy ratio on the profitability of Commercial Bank in Bangladesh. Hossain, Mohammad This study investigates the impact of capital adequacy and other financial and macroeconomic variables on the profitability of private commercial banks in Bangladesh. Using panel data collected from 10 listed banks over the period 2014 to 2023, the analysis employs various econometric techniques including Fixed Effects, Random Effects, Generalized Least Squares (GLS), and Pooled Ordinary Least Squares (OLS). Profitability is measured by Return on Assets (ROA) and Return on Equity (ROE), while independent variables include Capital Adequacy Ratio (CAR), Non-Performing Loan (NPL) ratio, Equity Capital to Total Asset Ratio, Bank Size, Total Loan to Total Deposit ratio, GDP growth, inflation, and interest rate spread. The findings reveal that the Capital Adequacy Ratio shows limited significance in simpler models but becomes positively associated with profitability in the GLS model, suggesting its conditional importance. The NPL ratio and high equity levels negatively affect profitability, while interest rate spread and bank size are significant positive contributors. Macroeconomic variables such as GDP growth show a mild positive impact, while inflation negatively influences bank earnings. Diagnostic tests confirm the presence of heteroscedasticity, autocorrelation, and cross-sectional dependence methods. Overall, the study concludes that bank profitability is shaped by a combination of internal financial practices and external economic conditions. It recommends that banks maintain an optimal capital structure, improve credit risk management, use digital technology for efficiency, and align financial strategies with economic trends. The research contributes to a deeper understanding of how capital adequacy and related variables influence the performance of commercial banks in emerging economies 2025-05-26T00:00:00Z http://ar.cou.ac.bd:8080/xmlui/handle/123456789/248 “Macroeconomic Determinants of Bank Profitability: Evidence from Conventional Banks in Bangladesh” Kawsar, Abu This study explores how selected macroeconomic factors influence the profitability of conventional banks in Bangladesh. Using panel data and applying the Feasible Generalized Least Squares (FGLS) regression method, the analysis focuses on four key economic indicators—GDP growth, remittance growth, money supply (M2), and foreign direct investment (FDI)—and their effect on Return on Assets (ROA) and Return on Equity (ROE), two common measures of bank profitability. The findings show that GDP growth has a negative relationship with both ROA and ROE. This suggests that during periods of economic expansion, banks may face higher costs or competitive pressures that reduce profit margins. In contrast, growth in remittance inflows is positively associated with bank profitability, indicating that remittances provide vital liquidity and support banks in expanding their lending activities. The money supply (M2) is found to have a negative effect on both ROA and ROE, which may result from reduced interest spreads in periods of excess liquidity. Meanwhile, FDI shows a positive impact on ROA but has no significant influence on ROE, implying that while foreign investment supports income generation from assets, it may not directly enhance returns to shareholders .Supporting tests, such as VIF analysis and correlation checks, indicate that multicollinearity and strong variable dependency are not concerns in the model. These results suggest that macroeconomic conditions play an important role in shaping bank profitability in Bangladesh. In summary, the study concludes that while remittance flows have a favorable effect on banking performance, GDP growth and money supply present challenges. FDI contributes positively to asset-based profitability but less so to equity-based returns. Policymakers and bank managers should consider these macroeconomic influences when developing strategies to maintain and enhance bank performance in a changing economic environment. 2025-05-26T00:00:00Z http://ar.cou.ac.bd:8080/xmlui/handle/123456789/246 Exploring the Link between Loan Loss Provisions and Profitability in Bangladesh’s Private Banking Sector Mia, Rubel This study investigates the relationship between Loan Loss Provisions (LLPs) and the profitability of private commercial banks in Bangladesh, considering both internal financial metrics and macroeconomic factors. As financial intermediaries, banks play a critical role in supporting economic activity, but they also face growing challenges from rising credit risk, deteriorating asset quality, and regulatory requirements. In this context, LLPs, which are used to cover potential loan defaults, become essential risk management tools. However, their impact on profitability remains a key concern for bank executives and policymakers. Using panel data from ten Dhaka Stock Exchange (DSE)-listed private banks over the period 2014 2023, the study examines how LLPs, along with Non-performing Loans (NPL), Capital Adequacy Ratio (CAR), Loan Growth Rate (LGR), GDP growth rate, Total Loans to Total Assets (TLTA), Total Loans to Total Deposits (TLTD), and Bank Size, influence Return On Assets (ROA) and Return On Equity (ROE). The analysis employs panel data regression models—Fixed Effects, Random Effects, Pooled OLS, and GLS—supported by robustness tests including multicollinearity (VIF), heteroskedasticity (Breusch–Pagan), autocorrelation (Wooldridge), and the Hausman specification test. GLS model is best for this study. The results show that LLPs and NPLs negatively affect profitability, while CAR, GDP growth, and bank size positively influence ROA and ROE. TLTD is found to have a negative effect, signaling potential risk from aggressive lending practices. The GLS model emerged as the most appropriate fit for the dataset. These findings highlight the importance of strategic provisioning policies and effective credit risk management. Policymakers and bank managers should focus on improving asset quality, maintaining adequate capital buffers, and aligning risk control measures with macroeconomic conditions to enhance long-term profitability in the banking sector. 2025-05-26T00:00:00Z