Analysis the Profitability of Private Commercial Banks in Bangladesh

The study intended to evaluate the profitability in private commercial banks in Bangladesh. This study considered 10 year dataset for the period of 2008 to 2017. The study used regression and correlation analysis tools to assess the collected data. The paper showed that return on assets, return on equity, and net interest margin were influencing the profitability of private commercial banks. This study also presented that return on assets, return on equity, and net interest margin were important association with the independent variable of equity asset ratio. Equity Asset Ratio (EAR), Loan Asset Ratio (LAR), and Deposit Asset Ratio (DAR). The study used a purposive sampling method to select the sample of private commercial banks. This study considered 11 commercial banks in Bangladesh. The data evaluated by using SPSS (Statistical Package for Social Sciences). The study applied regression analysis and correlation analysis tools for evaluating the profitability of private commercial banks in Bangladesh.

commercial banks. They applied correlation and regression analysis for assessing the hypothesis of performance of commercial banks. They found that the correlation analysis tool carried all hypotheses; however the regression analysis tool did not maintain the all hypothesis. They also found that the quality of product and service, and social responsibility had a statistical significant relationship with the bank reputation. Almazari (2011) analyzed the economic performance of commercial banks of Jordanian. He used secondary data for the period 2005 to 2009. He considered financial variables and ratios for evaluating the performance. He applied the simple regression method to determine the effect of operational effectiveness, asset management and bank size on return on assets and interest income. He showed that there was an important positive relationship with these variables. Kosmidou and Zopounidis (2008) investigated the performance of Greece commercial banks and cooperative banks. They found that commercial banks are more efficient than cooperative banks. Commercial banks were attracting customers for maximizing profits, but co-operative banks did not do this. Stankeviciene and Mencaite (2012) evaluated the performance of banks in Lithuanian. They used the systematic level method for assessing the banks' performance of Lithuanian. They indicated leading positions of the banks. Aspal and Malhotra (2013) analyzed the public banks' economic performance of India. They used the CAMEL model for evaluating the bank's performance. They used secondary data from 2007-2011. They presented that Bank of Baroda was the leader in the fields of asset quality, and liquidity. They also found that Bank of Baroda was the second place in the areas of capital adequacy and administration efficiency and earning superiority.

Objectives of the Study
The study tried to assess the private commercial banks' profitability in Bangladesh. Following were the specific objectives: · To assess the private commercial banks' profitability in Bangladesh. · To identify the influential factors of banks' profitability of the private commercial banks in Bangladesh.

Data and Methodology
The study used secondary data. The data were collected from journals, internet and annual report, etc. The study developed the following hypotheses for the regression analysis tool: H01-Equity asset ratio is a significant, influential factor of private commercial bank's profitability. H02-Loan asset ratio is a significant, influential factor of private commercial bank's profitability. H03-Deposit asset ratio is a significant influential factor of private commercial banks profitability. The study developed the following hypotheses for correlation analysis tool: H01=there is a significant correlation between the profitability of private commercial banks. a. Dependent Variable: Return on Asset Table 1 presented estimated R square was .796; representing that 79.6% changes were occurred by the independent variables to the dependent variable (ROA). The independent variable (EAR) had an important and positive connection with the dependent variable (ROA). In this study, equity asset ratio's beta coefficient was .663 and the level of significance was 0.020. However, the hypothesis H01 was accepted; hypotheses H02 and H03 were rejected in the case of return on assets (ROA).  Table 2 showed estimated R square was .775, representing that 77.5% changes were occurred by the independent variables to the dependent variable (ROE). The independent variable (EAR) had an important and positive connection with the dependent variable (ROE). In this study, equity asset ratio's beta coefficient was 3.881 and the level of significance was 0.044. Therefore, the hypothesis H01 was accepted; hypotheses H02 and H03 were rejected in the case of return on equity (ROE).  Table 3 presented estimated R square was .818, representing that 81.8% changes were occurred by the independent variables to the dependent variable (NIM). The independent variable (EAR) had an important and positive connection with the dependent variable (NIM). In this study, equity asset ratio's beta coefficient was 2.250 and the level of significance was 0.034.However, the hypothesis H01 was accepted; hypotheses H02 and H03 were rejected in the case of net interest margin (NIM). .034 .003 .332 N 11 11 11 11 **. Connection is important at the 0.01 level (2-tailed). *. Association is important at the 0.05 level (2-tailed) The private commercial banks had 87% statistical significant relationship between return on asset (ROA) and equity asset ratio (EAR) at the 1% significance level. They had also 83% statistical significant relationship with equity asset ratio (EAR) and deposit asset ratio (DAR) at the 1% significance level. However, H01 hypothesis was accepted in the case of return on asset (ROA) and equity asset ratio (EAR). .029 .003 .332 N 11 11 11 11 **. Connection is important at the 0.01 level (2-tailed). *. Association is important at the 0.05 level (2-tailed) The commercial banks had 88% statistical significant relationship between return on equity (ROE) and equity asset ratio (EAR) at the 1% significance level. They had also 83% statistical significant relationship with equity asset ratio (EAR) and deposits asset ratio (DAR) at the 1% significance level. Therefore, H01 hypothesis was accepted in the case of return on equity (ROE) and equity asset ratio (EAR). .017 .003 .332 N 11 11 11 11 **. Connection is important at the 0.01 level (2-tailed). *. Association is important at the 0.05 level (2-tailed) The private commercial banks had 90% statistical significant relationship between net interest margin (NIM) and equity asset ratio (EAR) at the 1% significance level. They had also 83% statistical significant relationship with equity asset ratio (EAR) and deposit asset ratio (DAR) at the 1% significance level. However, H01 hypothesis was accepted in the case of net interest margin (NIM) and equity asset ratio (EAR).

Conclusion
This study evaluated the profitability of private commercial banks in Bangladesh. The study was selected eleven private commercial banks in Bangladesh as a sample for the analysis of bank's profitability. Return on asset, return on equity and net interest margin were taken as the dependent variables while the equity asset ratio (EAR), loan asset ratio (LAR) and deposit asset ratio (DAR) were taken as independent variables.
Regression results presented that H01; H02; and H03 hypotheses were accepted for dependent variables (ROA, ROE, and NIM) and independent variable (equity asset ratio). However, the commercial bank's profitability had a statistical significant relationship with the equity asset ratio of the significant level 1% (Ramlan, and Adnan, 2016).
Correlation results showed that H01 hypothesis was accepted for dependent variables (ROA, ROE, and NIM) and independent variables (EAR, and DAR). Therefore, the commercial bank's profitability had a statistical significant relationship with equity asset ratio and deposit asset ratio of the significant level 1% (Ramlan, and Adnan, 2016). On the practical aspect, the study will be useful for bankers, academicians, and policy maker for determining their assessments about the financial performance of banks.