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A Comparative Analysis between Commercial Banks and Insurance Companies in Bangladesh on the basis of Capital Structure

Author

Listed:
  • Shakila Zerin Bony

    (Department of Business Administration, Stamford University Bangladesh.)

  • Md. Moniruzzaman

    (Department of Business Administration, Stamford University Bangladesh)

Abstract

This research aims to compare the capital structure of Bangladeshi commercial banks and insurance companies. This research tries to identify how debt-equity mix influences firm performance in banks and insurance companies in Bangladesh. The annual financial statements of 10 commercial banks and 10 insurance Companies were used for this study which covers a period of five (5) years from 2011-2015. The study assesses the capital structure of the commercial banks and insurance companies measured by total debt to equity ratio (DER), total debt to total funds ratio and performance by ROE, ROA, and EPS. Descriptive statistics, t-test have been used to show the differences between commercial banks and insurance companies capital structure and performance. However this study concludes that there is no significant difference between Bank and insurance companies EPS& ROE but there is a significant difference between Bank and insurance company’s D/A ratio, D/E ratio and ROA. We have tried to find out the significances of capital structure on depository and non-depository financial institutions from this study.

Suggested Citation

  • Shakila Zerin Bony & Md. Moniruzzaman, 2017. "A Comparative Analysis between Commercial Banks and Insurance Companies in Bangladesh on the basis of Capital Structure," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 7(8), pages 1-11, August.
    • Handle: RePEc:mir:mirbus:v:7:y:2017:i:8:p:1-11
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    File URL: http://thejournalofbusiness.org/index.php/site/article/view/1067/661
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    References listed on IDEAS

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    More about this item

    Keywords

    Capital Structure; EPS; Return on Asset; Return on Equity; Total Debt to Total Equity Ratio (DER); and Total Debt to Total Funds Ratio.;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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