Association between Interest Rate Changes and Profitability of Commercial Banks of Bangladesh
Author (s)
Samia Nur Jui, Rokibul Hasan Sakib & Md. Abu Rafsan
Abstract
Commercial banks play a crucial role in the context of modern business world. Being financial intermediaries, banks effectively contributes to the economic growth of our country. The relationship between changing interest rates and its impact on bank’s profitability has become a sensitive fact of having paramount importance. A comprehensive study has been conducted by using 5 consecutive years’ data (2014-2018) of all the 30 listed commercial banks of Bangladesh. The secondary data was collected from annual reports of corresponding commercial banks. This study represents the association and effect of interest rate changes on bank’s profitability. It also shows empirical charts, graphs regarding analyzing data and communicating results. This report has been divided into seven chapters for the convenience of preparation. Descriptive analysis, linear regression analysis, multivariate analysis, analysis of variance, correlation analysis, multicollinearity test and durbin-watson test have been carried out to establish and explain the relationship between stated two facts. It is derived from the study that change in Interest rate has significant impact on the profitability of commercial banks. Interest rate spread positively impact the profitability measures of the study (ROE, ROA, and NIM).
Keywords: Interest rate change, Profitability, Bank rate, Commercial banks, Bangladesh.
| Title: | Association between Interest Rate Changes and Profitability of Commercial Banks of Bangladesh |
|---|---|
| Author: | Samia Nur Jui, Rokibul Hasan Sakib & Md. Abu Rafsan |
| Journal Name: | International Journal of Science and Business |
| Website: | ijsab.com |
| ISSN: | ISSN 2520-4750 (Online), ISSN 2521-3040 (Print) |
| DOI: | https://doi.org/10.5281/zenodo.3965681 |
| Media: | Online |
| Volume: | 4 |
| Issue: | 9 |
| Acceptance Date: | 28/07/2020 |
| Date of Publication: | 29/07/2020 |
| PDF URL: | https://ijsab.com/wp-content/uploads/587.pdf |
| Free download: | Available |
| Page: | 17-37 |
| First Page: | 17 |
| Last Page: | 37 |
| Paper Type: | Research Paper |
| Current Status: | Published |
Cite This Article:
Samia Nur Jui, Rokibul Hasan Sakib & Md. Abu Rafsan (2020). Association between Interest Rate Changes and Profitability of Commercial Banks of Bangladesh. International Journal of Science and Business, 4(9), 17-37. doi: https://doi.org/10.5281/zenodo.3965681
Retrieved from https://ijsab.com/wp-content/uploads/587.pdf
About Author (s)
Samia Nur Jui, Post graduate student, Department of Accounting & information Systems, University of Dhaka, Dhaka-1000, Bangladesh.
Rokibul Hasan Sakib (corresponding author), Post graduate student, Department of Accounting & information Systems, University of Dhaka, Dhaka-1000, Bangladesh.
Md. Abu Rafsan, Post graduate student, Department of Accounting & information Systems, University of Dhaka, Dhaka-1000, Bangladesh.
DOI: https://doi.org/10.5281/zenodo.3965681