BUS-485-Final-Report-by-Hero.pdf - INDEPENDENT UNIVERSITY BANGLADESH(IUB Level of Efficiency in Banking Sector of Bangladesh Business Research

BUS-485-Final-Report-by-Hero.pdf - INDEPENDENT UNIVERSITY...

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INDEPENDENT UNIVERSITY, BANGLADESH (IUB) Level of Efficiency in Banking Sector of Bangladesh Business Research Method (BUS 485) Section: 02 Submitted To Dr. Samiul Parvez Ahmed Assistant professor & Head, Department of Finance School of Business Independent University, Bangladesh (IUB) Submitted by NAME ID MD. IFTEKHAR AHMED 1521696 AVIJIT DEY 1521645 MD. SHAMIM FORHAD HERO 1521916 TANVEER AHSAN 1521625 LUTFUN NAHER ANONNA 1410391 Submission Date: 26 th November 2018
i 26 th November 2018 To Dr. Samiul Parvez Ahmed Assistant professor Head of finance department Independent University, Bangladesh Bashundhara, Dhaka-1212 Subject: Submission of Research Report. Dear Sir, With due respect, it is our pleasure and honor to be your students and have this opportunity to prepare a report on this interesting topic. During preparing the report, we have given our all to best focus thoroughl y on the topic regarding “ Efficiency in banking sector ”. We provided all the possible information needed for this report. While preparing the report, we all have given our best to accumulate needed information and we will be more than happy to answer any question and clarify it fully to your understanding. Thank you for all of your help and support which help us significantly in preparing this report. Sincerely yours, Md. Shamim Forhad Hero On behalf of Team Falcon
ii Executive Summary The report mainly focuses on the level of efficiency in banking sectors of Bangladesh. This report discusses what impacts some variables can have on the ROA of banks of Bangladesh. The independent variables that we used for our research are- bank size, bank age and bank growth, Interest Expense/Total deposit, Operating cost/fixed asset. The relationship between the dependent and independent variables are discussed in literature review where references of some researchers and experts are mentioned. In this report, we have analyzed five third generation banks of Bangladesh and figured out the level of efficiency of banking sector. Our analyzed banks are Eastern Bank limited, City Bank, Jamuna Bank, Mutual Trust Bank and Brac Bank. Our problem statement is, “There are different studies to sort out the relationship between the bank size, bank age and bank growth, Interest Expense/Total deposit, Operating cost/fixed asset with ROA, through in-depth analysis of theories, concepts and contrasts from an ex-post facto study and linking all these variables together to find a total effect on the ROA”. In order to find out its solution, we have done literature review, conceptual framework, and hypothesis, research design, sampling, data collection and data analysis.
iii Contents 1. Introduction .............................................................................................................................................. 1 2. Problem statement ................................................................................................................................... 2 3. Purpose of the study ................................................................................................................................. 3 4. Literature review ....................................................................................................................................... 4 4.1AGE ....................................................................................................................................................... 4 4.1.1 Relation between ROA and BANK AGE ............................................................................................ 5 4.2 SIZE ...................................................................................................................................................... 7 4.2.1 Relation between ROA and Bank SIZE. ............................................................................................ 8 4.3 GROWTH: .......................................................................................................................................... 10 4.3.1Relation between ROA and BANK GROWTH .................................................................................. 12 4.4 Interest expense/Total deposit ......................................................................................................... 12 4.4.1 Relation between ROA and Interest Expense/Total deposit. ........................................................ 14 4.5 Operating Cost to Fixed Asset (OC/FA) ............................................................................................. 15 4.5.1 Relation of Operating expense to Fixed Asset and ROA ................................................................

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