Effect of Liquidity on Profitability of Banks using Revisited Panel Data Analysis: Does Ownership Structure Matter?
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Keywords

Liquidity, Banks, Current ratio, Profitability, Bank performance.

How to Cite

Begum, H. ., Rashid, M. M. ., Haque, M. S. ., & Uddin, M. M. . (2022). Effect of Liquidity on Profitability of Banks using Revisited Panel Data Analysis: Does Ownership Structure Matter?. International Journal of Asian Social Science, 12(6), 205–216. https://doi.org/10.55493/5007.v12i6.4529

Abstract

This study aims at examining the effect of liquidity management on the profitability of Bangladesh banks. To accomplish this objective, 32 banks of Bangladesh including second and third generation banks are taken as a sample. The secondary sources of data have been used for this study which are collected from the annual reports. Hausman specification test is run to identify the appropriate model which suggests that random effect model is suitable for this study. This study focuses on ROA, ROE and EPS as a denominator of profitability. Current ratio is found to have a positive impact on profitability of bank whereas capital adequacy ratio, interest rates are also found to be statistically significant for influencing the performance of the bank. Thus, this study suggests that proper management of liquidity will raise the profitability of the banks and the findings of this study will be helpful for the policy makers to solve the problems in respective field.

https://doi.org/10.55493/5007.v12i6.4529
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