Profitability Analysis Using Ratios in Selected Conventional Banks of Bangladesh: A Comparative Study

Abstract

Globalization, financial crisis, security and other major reasons why banking activities are growing every day. Bangladesh's banking sector is a vital component of the country's financial system.  The analysis was conducted to assess profitability of selected conventional banks in Bangladesh by financial ratios.  The ratio review was carried out to ascertain whether these banks are moving further and how these banks are responsible for managing development of other participants in the field. While reviewing the financial statements of the selected four banking institutions from 2015 to 2019, it was discovered that the reviewed financial statements contained secondary information. Secondary data sources provide some profitability metrics for banks, including (ROA), (ROE), (ROD), (EPS), (PER) and (NPM). For extra conclusion, mean value, standard deviation and Average Annual Growth rate (AAGR) are also used to compare profitability performance among selected banks. The study’s findings conclude that Dhaka Bank Ltd is best performing bank among the selected conventional banks. However, the study shows that AB Bank Ltd is performing worse than expected. The study's findings will help to increase the confidence and the understanding in the Bangladeshi banks regarding the financial transactions. Finally, it included a list of suggestions for improving bank profitability and efficiency

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