An evaluation of financial performance of private commercial banks in Bangladesh

Abstract

As a financial intermediary, banks play a crucial role in the operation of most economies. In the absence of a well functioning securities market, the banking sector in Bangladesh takes the lead in mobilizing resources and allocating funds in profitable ends. About fifty three different banks are operating at present in the country. They are broadly categorized as nationalized commercial banks, specialized banks, private domestic commercial banks and foreign commercial banks. Substantial economic underpinnings consistent with market economy and liberalization have been witnessed in Bangladesh over the last few years, but the development of efficient banking system has not been attained. Although banking sector has recorded an increase in number of branches and some financial deepening, a careful investigation into its performance casts doubt about its efficiency and effectiveness. A total of five first generation private commercial banks were financially analyzed to estimate the impact of asset management, operational efficiency and bank size on the financial performance of these banks. The study evaluates the financial performance of five first generation private commercial banks in this perspective.