The Impact of Liquidity and Profitability on Operational Efficiency of Selected Commercial Banks in Bangladesh:A Panel Data Study

The Impact of Liquidity and Profitability on Operational Efficiency of Selected Commercial Banks in Bangladesh:A Panel Data Study

Nazmoon Akhter

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α BGC Trust University Bangladesh

The Impact of Liquidity and Profitability on Operational Efficiency of Selected Commercial Banks in Bangladesh:A Panel Data Study

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Abstract

The recent economic and financial situations of Bangladesh have an impact on the banking system, raising a question about bank’s operational efficiency. Moreover, Bank’s operational efficiency is getting emphasized in the competitive financial market to satisfy both shareholders and depositor. The present study has assessed the impact of liquidity and profitability on the operational efficiency of scheduled commercial banks of Bangladesh over the period from 2011 to 2016. The study has used secondary data of 30 scheduled commercial banks of Bangladesh. The quantitative research has employed panel data approach using various models like Fixed Effect Regression model with Cluster-Standard Errors and Drisc/Kraay Standard Errors models, Feasible Generalized Least Square Model and Panel Correlated Standard Error Model to provide the robust result. The study reveals that liquidity and profitability combined explain about 66.23% and 98.85% of the bank’s operational efficiency under Fixed Effect Regression Model and Panel Correlated Standard Error estimator respectively. The study concludes that after maintaining minimum liquidity, the bank should utilize their customer’s deposits and borrowings through making high-quality loan portfolio to ensure earnings for their shareholders.

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

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How to Cite This Article

Nazmoon Akhter. 2018. \u201cThe Impact of Liquidity and Profitability on Operational Efficiency of Selected Commercial Banks in Bangladesh:A Panel Data Study\u201d. Global Journal of Management and Business Research - A: Administration & Management GJMBR-A Volume 18 (GJMBR Volume 18 Issue A7): .

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GJMBR Volume 18 Issue A7
Pg. 13- 24

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-A Classification: JEL Code: E59

Submission ReceivedDecember 9, 2017
Peer Review Double Blind
Handling Editor
Accepted January 4, 2018
Published January 15, 2018

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July 25, 2018

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Article Matrices

Total Score: 101

Country: Bangladesh

Subject: Global Journal of Management and Business Research - A: Administration & Management

Authors: Nazmoon Akhter (PhD/Dr. count: 0)

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Total Views (Real + Logic): 3275

Total Downloads (simulated): 1606

Publish Date: 2018 07, Wed

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Total Views: 3275

Total Downloads: 1606

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