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Financial Crises in State Owned and Private Commercial Banks in Bangladesh: A Comparative Analysis

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  • Kawsar Jahan
  • Mohammod Akbar Kabir
  • Farjana Nur Saima
  • Md. Nasim Adnan

Abstract

Recently the performance of banking industry is one of the much talked issues in the history of Bangladesh. Predicting the factors of financial crises in banks is very much important as this sector is facing a crises moment now. This study examined the driving factors of financial crises in banking sector using panel data consisted of five year observations (2012-2016) for each of 28 PCBs listed in Dhaka Stock Exchange (DSE) and 6 State-Owned Commercial Banks (SCBs). Financial crisis is measured by Altman¡¯s Z-score and Pooled Ordinary Least Square (Pooled OLS) has been applied to find out the factors necessary to condense financial crisis in banks. The study found that SCBs and listed PCBs in Bangladesh are facing financial crisis on the basis of Altman¡¯s Z-score model. Results of the analysis postulated that CRAR, NIIR and NINTR significantly contribute to lessen financial crisis in listed PCBs and also in SCBs. Therefore, the study suggests the regulatory authorities, including stakeholders and researchers to taking into account the findings of the study and to be more alert of the operations of SCBs and PCBs in order to steps forward the performance of this sector as well development of the country in the coming future.

Suggested Citation

  • Kawsar Jahan & Mohammod Akbar Kabir & Farjana Nur Saima & Md. Nasim Adnan, 2019. "Financial Crises in State Owned and Private Commercial Banks in Bangladesh: A Comparative Analysis," Business and Economic Research, Macrothink Institute, vol. 9(2), pages 146-159, June.
    • Handle: RePEc:mth:ber888:v:9:y:2019:i:2:p:146-159
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    References listed on IDEAS

    as
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    5. Sahut, Jean-Michel & Mili, Mehdi, 2011. "Banking distress in MENA countries and the role of mergers as a strategic policy to resolve distress," Economic Modelling, Elsevier, vol. 28(1-2), pages 138-146, January.
    6. Irina – Raluca Badea & Gheorghe Matei, 2016. "The Z-Score Model for Predicting Periods of Financial Instability. Z-Score Estimation for the Banks Listed on Bucharest Stock Exchange," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(18), pages 24-35, November.
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    More about this item

    Keywords

    Financial crisis; Listed PCBs; SCBs; Pooled OLS; Altman¡¯s z-score;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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