Determinants of the Profitability of Non-Banking Financial Institutions: An Empirical Study on Bangladesh Perspective
DOI:
https://doi.org/10.14738/abr.1012.13570Keywords:
Micro-economic Factors, ROA, ROE, NBFIs, Capitalization Level, Leverage, Asset Quality, Firm Size, Liquid Assets.Abstract
The main purposes of this research are to identify the critical microeconomic factors affecting non-banking financial institution profitability in Bangladesh. This study examined the financial statements of 20 NBFIs in Bangladesh for 10 years (2011–2020). The influence of intrinsic features of individuals in the panel data set was estimated using random effect regression models. The study's results have shown that asset structure and operating efficiency positively affect the profitability of NBFIs in Bangladesh. In contrast, capitalization level, leverage, asset quality, firm size, and liquid assets negatively impacted ROA. The empirical findings of this study will aid policymakers in developing a more realistic strategy for increasing the profitability of NBFIs in Bangladesh by concentrating on key elements.
References
Bikker, J. A., & Hu, H. (2002). Cyclical patterns in profits, provisioning and lending of banks and procyclicality of the new Basel capital requirements. PSL Quarterly Review, 55(221). https://ideas.repec.org/a/psl/bnlqrr/200222.html
Chowdhury, M. A., & Salman, M. A. G. (2021). Bank-specific & Macroeconomic Determinants of Profitability: Empirical Evidence from Bangladeshi Private Commercial Banks. American Journal of Theoretical and Applied Business, 7(4), 72-80. https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtab.20210704.11.pdf
Demirgüç-Kunt, A., & Detragiache, E. (1999). Monitoring banking sector fragility: a multivariate logit approach with an application to the 1996-97 banking crises. Available at SSRN 620670. https://www.imf.org/external/pubs/ft/wp/1999/wp99147.pdf
Demirgüç-Kunt, A., & Huizinga, H. (1999). Determinants of commercial bank interest margins and profitability: some international evidence. The World Bank Economic Review, 13(2), 379-408. https://academic.oup.com/wber/article-abstract/13/2/379/1639471?redirectedFrom=fulltext&login=false
Imtiaz, M. F., Mahmud K. & Faisal M. S. (2019). The Determinants of Profitability of Non-bank Financial Institutions in Bangladesh. International Journal of Economics and Finance; Vol. 11, No. 6; https://doi:10.5539/ijef.v11n6p25
Jeris, S. S. (2021). Factors Influencing Bank Profitability in a Developing Economy: Panel Evidence From Bangladesh. International Journal of Asian Business and Information Management (IJABIM), 12(3), 333-346. https://www.igi-global.com/article/factors-influencing-bank-profitability-in-a-developing-economy/279825
Khan, S., Rukh, L., & Zeb, A., (2021). Determoinants of Profitability of Islamic banks:Evidence from Islamic banks operating in Pakistan.International Journal of Business and Management Sciences, 2(4), 134-152. https://www.ijbms.org/index.php/ijbms/article/view/96/92
Khandoker, S. H., Raul R. K. & Rahman, S. M. G. (2011). Determinants of profitability of Non-Bank Financial Institutions in a developing country: Evidence from Bangladesh. https://www.freit.org/WorkingPapers/Papers/Other/FREIT536.pdf
Rabaa, B., & Younes, B. (2016). The impact of the Islamic banks performances on economic growth: using panel data. International Journal of Economics and Finance Studies, 8(1), 101-111. https://sobiad.org/eJOURNALS/journal_IJEF/archieves/IJEF-2016_1/badri.pdf
Rahman, S., & Farah, T. (2019). The Determinants of Profitability Non-Bank Financial Institutions' Evidence from Bangladesh. International Journal of Applied Research in Business Administration and Economics,1(1). https://www.researchgate.net/publication/332655061_The_Determinants_of_Profitability_of_Non-Bank_Financial_Institutions_in_Bangladesh
Saha, T. (2022). Determinants of the Profitability of Non-Banking Financial Institutions: An Empirical Study on Bangladesh Perspective. Archives of
Rifat, A. M. (2017). An Analytical Study of Determinants of Non-Performing Loans: Evidence from Non-Bank Financial Institutions (NBFIs) of Bangladesh. Journal of Business and Technology (Dhaka), 55-67. https://doi.org/10.3329/jbt.v11i1.34242
Saklain, M. (2012). The Profitability Determinants of Private Commercial Banks in Bangladesh. Asian Institute of Technology (School of Management). Retrieved from http://www.pmbf.ait.ac.th/sites/default/files/report/report_sohelsaklain.pdf
Ullah, M. A., Nath, S. D., & Biswas, M. R. (2020). Impact of bank-specific internal factors on the profitability of state-owned commercial banks in Bangladesh. Indian Journal of Commerce and Management Studies, 11(2), 24-32. DOI: 10.18843/ijcms/v11i2/03
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Tama Saha
This work is licensed under a Creative Commons Attribution 4.0 International License.
