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Global financial crisis, ownership and bank profit efficiency in the Bangladesh's state owned and private commercial banks

Author

Listed:
  • Fakarudin Kamarudin

    (Universiti Putra Malaysia)

  • Fadzlan Sufian

    (Taylor's University)

  • Annuar Md. Nassir

    (Universiti Putra Malaysia)

Abstract

This paper studies the impact of global financial crisis focusing on State Owned Commercial Banks (SCBs) and Private Commercial Banks (PCBs) ownership and others bank specific and macroeconomics factors influencing profit efficiency level of the Bangladesh banking sector. The Slack-Based Data Envelopment Analysis (SBM-DEA) method employed to compute the profit efficiency of 31 commercial banks operating in the Bangladesh over the years 2004–2011. Furthermore, the multivariate panel regression analysis framework based on the Ordinary Least Square (OLS) and Generalized Least Square (GLS) methods comprising the Fixed Effect (FE) and Random Effect (RE) models adopted to examine the determinants of banks profit efficiency. Results indicate the levels of profit efficiency on SCBs and PCBs are increasing by 3.7% and 5.8% during financial crisis years. However, over the period of post financial crisis years exhibited, profit efficiency levels on SCBs and PCBs are decreasing by 38.7% and 9.9%. Although profit efficiency levels on both ownership of banks show declining over the post financial crisis years, the PCBs still higher than SCBs (67.8% > 60.1%) but insignificantly different. Furthermore, the findings reveals that the relationship of size of bank, liquidity, economic growth and market concentration are significantly negative with profit efficiency of SCBs but positive to PCBs. Meanwhile, the factors of capitalization, credit risk and inflation are significant with the positive and negative sign only to the profit efficiency of the SCBs over the period of post global financial crisis.

Suggested Citation

  • Fakarudin Kamarudin & Fadzlan Sufian & Annuar Md. Nassir, 2016. "Global financial crisis, ownership and bank profit efficiency in the Bangladesh's state owned and private commercial banks," Contaduría y Administración, Accounting and Management, vol. 61(4), pages 705-745, Octubre-D.
  • Handle: RePEc:nax:conyad:v:61:y:2016:i:4:p:705-745
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    Citations

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    Cited by:

    1. Syed Moudud-Ul-Huq & Rabaka Akter & Tanmay Biswas, 2020. "Impact of Financial Crisis on Credit Risk: Pre- and Post-financial Crises 
in an Emerging Economy," FIIB Business Review, , vol. 9(2), pages 118-132, June.
    2. Camanho, Ana Santos & Silva, Maria Conceicao & Piran, Fabio Sartori & Lacerda, Daniel Pacheco, 2024. "A literature review of economic efficiency assessments using Data Envelopment Analysis," European Journal of Operational Research, Elsevier, vol. 315(1), pages 1-18.
    3. Mahbub, Tasmina & Matthews, Kent & Barker, Kate, 2019. "Other people’s money: The profit performance of Bangladeshi family dominated banks," Journal of Behavioral and Experimental Finance, Elsevier, vol. 21(C), pages 103-112.
    4. Sreemanta Sarkar & Debdas Rakshit, 2023. "Factors Influencing the Performance of Commercial Banks: A Dynamic Panel Study on India," FIIB Business Review, , vol. 12(1), pages 85-99, March.
    5. Henriques, C.O. & Gouveia, M.C., 2022. "Assessing the impact of COVID-19 on the efficiency of Portuguese state-owned enterprise hospitals," Socio-Economic Planning Sciences, Elsevier, vol. 84(C).
    6. Iwona Dorota Czechowska & Tomasz Florczak, 2022. "Efficiency of banking sectors of the European Union. A comparative benchmarking analysis before and during the COVID-19 pand," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 10(2), pages 319-332, December.
    7. Dircio-Palacios-Macedo, María del Carmen & Cruz-García, Paula & Hernández-Trillo, Fausto & Tortosa-Ausina, Emili, 2023. "Constructing a financial inclusion index for Mexican municipalities," Finance Research Letters, Elsevier, vol. 52(C).

    More about this item

    Keywords

    Global financial crisis; State Owned Commercial Banks; Private Commercial Banks; Profit efficiency;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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