Analysis of Performance and Financial soundness of financial institution (Banks): A Comparative Study

Abstract

Financial sector of Bangladesh comprises with commercial banks, non-bank financial institutions, insurance companies etc. However, the banks play the key role in the financial system of Bangladesh. The foremost question now is whether the commercial Banks were performing successfully as expected or not. It is a matter of argument regarding how far they are performing and contributing towards both the sustainable development of Bangladesh's financial sector, especially banking industry and the improvement of overall socio economic condition by fulfilling customer’s expectation. This research is aims to evaluate performance and financial soundness of baking industry. Quantitative approach is used as well as considering a sample of 20 listed Banks in Dhaka Stock Exchange. To do so, different financial ratios like Return on Assets (ROA), Return on Equity (ROE), Cost to Income Ratio (C/I), Liquid assets to deposit-borrowing ratio (LADST), Net Loans to total asset ratio (NLTA), Net loans to deposit and borrowing (NLDST) , Multivariate Discriminate Analysis (MDA) and statistical tools like mean, standard deviation (SD) and coefficient of variance as well as Trend analysis is done to indicate the performance.

Key words: Performance, ROI, ROE, C/I, Financial soundness, Multivariate Discriminate Analysis (MDA)