IMPACT OF OWNERSHIP STRUCTURE ON THE PERFORMANCE

OF LISTED COMMERCIAL BANKS IN BANGLADESH

IMPACT OF OWNERSHIP STRUCTURE ON THE PERFORMANCE OF
LISTED COMMERCIAL BANKS IN BANGLADESH

SUBMITTED TO
Department of Accounting & Information Systems
University of Barishal

SUPERVISED BY
SHAHADAT HOSSAIN
Lecturer
Department of Accounting & Information Systems

University of Barishal

SUBMITTED BY
Exam Roll: AIS 042/8
Department of Accounting & Information Systems

University of Barishal

Date of Submission: 19th may, 2022

 Dedication

Dedicate to

MD. HABIBUR RAHMAN

My beloved brother, who is my sources of inspiration and strength. Whenever I thought

of giving up, he continuously provides me spiritual, moral, emotional even financial
support.

Thank you

i
 Approval page

This is to certify that, Exam Roll: AIS 042/8, has done an internship report on “Impact of
ownership structure on the performance of listed commercial banks in Bangladesh’’.
This report has been approved for presentation, defense, viva-voce.

This report has been prepared under my guidance and is a genuine work carried out
successfully.

Supervisor,

-----------------------

SHAHADAT HOSSAIN

Lecturer

Department of Accounting & Information Systems

University of Barishal

ii
 Letter of Transmittal

19th may, 2022

To
SHAHADAT HOSSAIN
Lecturer
Department of Accounting & Information Systems
University of Barishal

Subject: Submission of internship report.

Dear sir,
With the honour, I pleased to submit my internship report on “Impact of ownership
structure on the performance of listed commercial banks in Bangladesh’’ to meet
the requirement of the internship program of Bachelor of Business Administration (BBA)
degree.

This report focuses to find the effect of ownership structure on the performance of
commercial banks of Bangladesh. The main objective is to find the impact of different
types of ownership on the performance of the commercial banks and to find the type of
ownership which has greater impact on the performance of the commercial banks in
Bangladesh.

I am very thankful that you have given me an opportunity to prepare this report. I have
learnt a lot from preparing this internship report.

Sincerely,
Exam Roll: AIS 042/8
Batch 5th, Department of Accounting & Information Systems
University of Barishal

iii
 Acknowledgement

At first, I would like express my thanks to the almighty Allah who has enabled me to
complete my internship work properly.

Then, I would express my special thanks to my academic supervisor SHAHADAT

HOSSAIN who has helped me to prepare this report by giving instruction, support, and
necessary information. He also gave me enough time to teach me proper instructions
and analytical tools & techniques about my internship report.

I am also very thankful to the Human Resources (HR) division of the Janata Banks
Limited for giving me an opportunity to work as an intern in their banks. I am also
grateful to the manager of Janata Banks limited, Kashipur branch, Barishal.

iv
 Executive Summary

The report is based on “The Impact of ownership structure on the performance of

listed commercial banks in Bangladesh.” The purpose of the report is to find the
impact of ownership structure on the performance of listed commercial banks in
Bangladesh. I think there is a strong relationship between ownership structure and the
performance of listed commercial banks in Bangladesh. In this report, I have tried to find
the specific type of ownership structure which affects or causes any change of the
performance of listed commercial banks in Bangladesh. The process of the research is
described shortly in the following steps

At first, I have collected the last five years’ annual reports from the website of 30 listed
commercial banks in Bangladesh. In fact, there 30 listed commercial banks in Dhaka
Stock Exchange (DSE). The report contains data of the banks that are listed in the
Dhaka stock Exchange (DSE) from the year of 2017 to 2021. I have taken the data of
different types of ownership structure which includes directors’ and sponsors ownership,
foreign ownership, domestic shareholder’s ownership, institutional ownership &
government ownership. The data of performance is also collected from the annual
reports of those banks which are listed in DSE.

Secondly, I have selected my data and methodology with the analytical model. In my
analytical model I have taken the Return on Assets (ROA) as the dependent variables
and there are five independent variables in my model that are directors’ and sponsors
ownership, foreign ownership, domestic shareholders ownership, institutional ownership
& government ownership.

Thirdly, I have completed the data analysis of last five years’ dependent and
independent variables data with the help of STATA software. My analysis includes the
regression analysis, fixed effect, random effect, finding the value of coefficient,
correlation of determination, correlation among the variables. These models are
appropriate to check the validity of the research and help to prove the hypothesis either
it is correct with the statement or wrong.

v
 2
Finally, I have found value overall R is 0.5427which indicates that about 54.27% of total
variability in the Return on Asset is explained by the independent variables – director &
sponsor ownership, institutional ownership, foreign ownership and public ownership.

Project at a glance

Ownership structure can be defined as distribution of equity among different group of

shareholder. Ownership structure is an important variable among the variables that
effect the financial performance of commercial banks in Bangladesh. The objective of
this report is to find the ownership structure and its impact on the performance of
commercial bank in Bangladesh.

To complete this research, I have collected ownership structure and performance

related data from the annual report of commercial banks in Bangladesh from the year of
2017 to 2021.This report is based on sample data because I have collected data of 30
commercial banks among the 60 commercial bank in Bangladesh .I have taken Return
on Asset (ROA) as dependent variable and there are five types of ownership – director
& sponsor ownership ,institutional ownership ,government ownership , foreign
ownership and public ownership.

I have completed the data analysis of last five years’ dependent and independent
variables data with the help of STATA software. My analysis includes the regression
analysis, fixed effect, random effect, finding the value of coefficient, correlation of
determination, correlation among the variables.

Correlation of regression shows that director & sponsor ownership, institutional

ownership and public ownership have positive coefficient with the dependent variable
on the other hand foreign ownership has negative coefficient with the dependent
variable. T test analysis shows that director &sponsor ownership, foreign ownership and
public ownership have lower level of significance (less than 5%). So director &sponsor
ownership, foreign ownership and public ownership reject the null hypothesis. That
means there is a linear relationship between return on asset (independent variable) and
three independent variables - director &sponsor ownership, foreign ownership and
public ownership. That also indicates that director &sponsor ownership, foreign

vi
ownership and public ownership are the significant variables in the model. On the other
hand, institutional ownership has higher level of significance. so it accepts null
hypothesis that means there is a non-linier relationship between return on asset (ROA)
2
and institutional ownership. Correlation of determination shows that overall value of R
is 0.5427 that means 54.27% variation in the dependent variable can be explained by
the independent variables.

Based on my analysis, it can be said that director & sponsor ownership and public
ownership have positive effect on the performance of commercial banks in Bangladesh
on the hand foreign ownership has negative effect on the performance of commercial
banks in Bangladesh.

vii
 Table of Contents

Contents Page No

List of Tables--------------------------------------------------------------------------------------------------x

List of Figures-------------------------------------------------------------------------------------------------xi

List of Acronyms--------------------------------------------------------------------------------------------xii

Chapter 1: Introduction

1.00. Introduction ----------------------------------------------------------------------------------02

1.01. Origin of the study---------------------------------------------------------------------------02

1.02. Objective of the study-----------------------------------------------------------------------02

1.03. Problem statement---------------------------------------------------------------------------03

1.04. Rational of the study-------------------------------------------------------------------------03

Chapter 2: Data and Methodology

2.00. Data and Methodology ---------------------------------------------------------------------05

2.01. Data ------------------------------------------------------------------------------------------- 05

2.02. Variables --------------------------------------------------------------------------------------05

2.02.1. Dependent variable. --------------------------------------------------------------05

2.02.2. Independent variables -----------------------------------------------------------06

2.02, Data collection -------------------------------------------------------------------------------07

2.04. Analytical model ----------------------------------------------------------------------------08

Chapter 3: Literature Review

3.00. Literature Review ------------------------------------------------------------------------10

viii
Chapter 4: Descriptive Statistical Analysis

4.01. Financial performance ------------------------------------------------------------------16

4.02. Average Director & Sponsor Ownership --------------------------------------------17

4.03. Average Institutional Ownership ------------------------------------------------------18

4.04. Average Foreign Ownership -----------------------------------------------------------19

4.05. Average Public Ownership ------------------------------------------------------------20

Chapter 5: Data Analysis and Interpretation-

5.01. Coefficient of Correlation --------------------------------------------------------------22

5.02. Analysis of T- test-----------------------------------------------------------------------23

5.03. Correlation of determination ----------------------------------------------------------24

Chapter 6: Conclusion

6.00. Conclusion--------------------------------------------------------------------------------26

References ---------------------------------------------------------------------------------------------------28

Appendices

Appendix -1. Commercial banks -----------------------------------------------------------------29

Appendix -2. Summary of data -------------------------------------------------------------------30

Appendix -3. Regression results ------------------------------------------------------------------ 35

ix
 List of Tables

Table01. Average Return on Asset ------------------------------------------------------------------------ 16

Table 02. Average director &sponsor ownership -------------------------------------------------------- 17

Table 03. Average institutional ownership --------------------------------------------------------------- 18

Table 04. Average foreign ownership --------------------------------------------------------------------- 19

Table 05. Average public ownership ---------------------------------------------------------------------- 20

Table 06. Impact of ownership structure on Return on Asset (ROA)--------------------------------

22

2
Table 07. Correlation of determination R ---------------------------------------------------------------- 24

x
 List of Figures

Figure 01. Average Return on Asset ----------------------------------------------------------------------16

Figure 02. Average director &sponsor ownership -------------------------------------------------------17

Figure 03. Average institutional ownership --------------------------------------------------------------18

Figure04. Average foreign ownership --------------------------------------------------------------------19

Figure 05. Average public ownership ---------------------------------------------------------------------20

xi
 List of Acronyms

NPM- Net Profit Margin

ROA-Return On Asset

ROE –Return On Equity

DIR –Directors & Sponsors ownership

INS – Institutional ownership

GOV – Government ownership

FOR- Foreign Ownership

PUB – Public ownership

DSE- Dhaka Stock Exchange

PRM – Performance

HR- Human Resources

BBA – Bachelor of Business Admiration

xii
Chapter –1

Introduction

1
1.00. Introduction

Ownership structure can be defined as distribution of equity of a firm among different

types of group. Ownership structure is considered as one of the most influential factor
on the performance of commercial banks in Bangladesh. There are different types of
ownership structure in commercial banks in Bangladesh. Most of banks in Bangladesh
can be found as a mixture of ownership structure including director & sponsors,
institutional, general investors, foreign investors, government of the country and other
investors.

Most of the private banks are found increased amount of directors and sponsors
ownership. On the other hand, public banks are found with government ownership with
little percentage of public ownership. So, the performance of those banks is different
due the ownership structure because the board of directors and governing body are
selected by owners of the banks.

In this research paper, I shall try to find out the impact of ownership structure on the
performance of listed commercial banks in Bangladesh. For that purpose, I have taken
data of 30 banks that are listed in Dhaka Stock Exchange (DSE) and their last five
years’ ownership structure data and performance data from the year 2017 to 2021.

1.01. Origin of the study

As per the requirement after competition of BBA program this report is prepared as an
internship report. My topic is “impact of ownership structure on the performance of
listed commercial banks in Bangladesh.” This topic was assigned by my Honorable
supervisor SHAHDAT HOSSAIN, Lecturer , Department of Accounting & Information
System, faculty of Business Studies, University of Barishal.

1.02. Objective of the study

The objective of the research paper is to find the impact of ownership structure on the
performance of the listed commercial banks in Bangladesh. There is a strong

2
relationship between ownership structure and the performance of the commercial banks
in Bangladesh.

In this research paper the main objective is to find the effect of various types of
ownership structure on the performance of listed commercial banks in Bangladesh and
also find out which ownership has greater impact on the performance of listed
commercial banks in Bangladesh.

This research paper will help the investors to select the banks with better ownership that
provides them higher return and predict future performance of the banks on the basis of
observing the ownership structure of the banks. This research paper will also provide a
general overview of ownership structure of the commercial banks in Bangladesh

1.03. Problem statement

This research is based on ownership structure and its impact on the performance of
listed commercial banks in Bangladesh. The research paper mainly focused on the
ownership structure and the performance of listed commercial banks in Bangladesh.

The problem is that; this research paper is done on the basis of sample data so it
cannot be said that the result which is found in this research paper after the analysis is
100% accurate. All of the banks in Bangladesh are not listed in the Dhaka Stock
Exchange (DSE), so it not possible to collect the data of all the banks in Bangladesh. At
last we can say that ownership structure is not only factor that affect performance of
listed commercial banks, it can be affected by other internal and external factors

1.04. Rational of study

My topic is impact of ownership structure on performance of listed commercial banks in

Bangladesh. The rationale of the study is to find the relationship between ownership
structure and the performance of listed commercial banks in Bangladesh and also find
the ownership structure which has higher impact on the performance of the

3
commercial banks in Bangladesh. This study will helpful to the shareholders’, managers,
government and academicians. This study is expected to benefit the listed commercial
banks in Bangladesh as they would be able to understand the relationship between
financial performance and ownership structure. This study will help the shareholders in
Bangladesh weather their wealth is influenced by the performance of listed commercial
banks in Bangladesh.

4
 Chapter – 2

Data and Methodology

2.00. Data and Methodology

This chapter includes the tools and techniques of the research that are required to find
the impact of ownership on the performance of listed commercial banks in Bangladesh.
In this chapter data, dependent variable, independent variables, data collection, the
sources of data collection, the analytical model would be given clearly.

2.01. Data

The main objective of this research paper is to find out the impact of ownership
structure on the performance of listed commercial banks of Bangladesh. For that
reason, I have taken last five years’ data of ownership structure and performance of 30
listed commercial banks in Bangladesh, which is measured by the percentage of
ownership such as directors’ & sponsors ownership, foreign ownership, public
ownership, institutional ownership and government ownership. The performance of
commercial banks can be measured by the Return on Assets (ROA) and Return on
Equity (ROE). The main focus of the research is to find the impact of changing
ownership structure on the performance of 30 listed commercial banks in Bangladesh.

2.02. Variables

To find out the impact of ownership structure on the performance of listed commercial

banks in Bangladesh, an appropriate model is linear regression model or linear equation.

There are mainly two types of variables which makes the linear regression model. The
first one is dependent variable and the second one is independent variable. The result
of dependent variable always depends on the variation on the independent variables.

2.02.1. Dependent variables: In this research I have taken Return on Assets (ROA)

of the selected commercial banks of Bangladesh as dependent variable. The

5
 reason is that the research is based on the impact of ownership structure on
performance which is measured by the Return on Assets (ROA). So, ROA will
changes due to the changes of ownership structure.

The main goal of commercial banks is to earn profit. Shareholders invest in the
firm to earn profit. But profit is not the only indicator of performance of the
commercial banks; there are also some indicators of performance of commercial
banks such as Return on Assets (ROA). We can measure the performance of the
commercial banks on the basis of the indicator.

Return on Assets (ROA): Return on Assets (ROA) is the major indicator of

profitability of the commercial banks. It measures how efficiently the firm uses its
assets to earn profit. Shareholders considers ROA as a major indicator of
financial performance of commercial banks in Bangladesh, they also take
investment decision on the basis of the ratio of return on asset.

2.02.2. Independent variables: In this research the independent variables are the
different types of ownership structure such as directors’ & sponsors ownership,
foreign ownership, public ownership, institutional ownership & government
ownership. The reason is that the changes of ownership structure changes the ROA
of those selected commercial banks.

Independent variables affect the performance of commercial banks in

Bangladesh in several ways. The effect of independent variable on the
performance of the banks is given below:

Director & sponsors ownership: We found higher percentage of director &

sponsor ownership in private banks in our country. There is a huge influence of
directors’ & sponsors ownership on the decision making on the banks. They are
related to the activities of the firm. Sometimes the directors’ & sponsors take
decision on their favorable way. For that reason, the proportion of directors’ &
sponsors ownership has strong impact on the performance of commercial banks.

6
Foreign ownership: The term foreign ownership means the ownership holds by
the foreign individuals or any institutions. Foreign ownership also has strong
influence of the performance. Foreigners take the best decisions for the firm and
they are also very concern about the performance about the commercial banks.
So, it can be said that the proportion of foreign ownership can change the
performance of commercial banks.

Institutional ownership: Institutions are concern about the investment of their

surplus money and they want to make profit by investing in the best shares. The
institutional owners will take the best decision for the banks. There is a huge
influence of institutional ownership on the decision making on the banks. They
are also strongly related to the activities of the firm. So, it can be said that the
proportion of institutional ownership also influence the performance of the
commercial banks.

Government ownership: All the public commercial banks in our country are
regulated by the government. And most of the public commercial banks in
Bangladesh owned by the government. The government also invests in other
commercial banks in Bangladesh. So government ownership structure also can
influence the performance by various decision making activities.

Public ownership: It is the proportion of shares hold by the common public in

the commercial banks in Bangladesh. The common people are the main open
market investors of a country. A large portion of investment in commercial banks
is made by the common people. The public ownership has major impact on
performance because they take part in annual meeting and involve in decision
making activities.

7
2.03. Data collection
Primary source: The research is based on the data of banks of Bangladesh that
are listed in Dhaka Stock Exchange (DSE). So, data is collected from the website
of the banks for the last five years’ annual reports. I have taken the data of
different types of ownership structure such as directors’ and sponsors ownership,
foreign ownership, domestic shareholders ownership, institutional ownership &
government ownership.

The data of performance will be collected from the annual reports of those banks
which are measured by the Return on Assets (ROA). The research contains data
of banks that are listed in Dhaka Stock Exchange (DSE) from the year 2017 to
2021.

Secondary source: The secondary source of data collection is the Dhaka Stock
Exchange library where I have found the annual reports of my selected banks for
this research. I have collected few annual reports from DSE library which are not
available in the websites of those banks.

2.04. Analytical model

With the help of dependent and in dependent variables, the regression equation can be
found in the following form:

PRM = α+ β1*DIR + β2*GOV + β3*INS + β4*FOR + β5*PUB

Where,

PRM = The measure of the financial performance of the selected commercial

banks of Bangladesh which is measured by either ROA.

α = The alpha is a constant term which is the intercept of the regression

8
equation.

β = It is the coefficient of variables which represents the sensitivity of the bank’s

performance to changes in the movement of the various variables.

DIR = It indicates the percentage of shares holding by the directors and

sponsors of those commercial banks.

GOV = It is the percentage of shares holding by the government of Bangladesh.

INS = It reflects the percentage of share holdings by the different types of

financial institutions.

FOR = It indicates the percentage of share holdings by the foreign investors.

PUB = It indicates the percentage of share holdings by the general public of the
country or common stockholders.

9
 Chapter -3
Literature Review

3.00. Literature Review Performance of listed commercial banks in Bangladesh

depends on different variables. Ownership structure is most important variable that
affects the performance of listed commercial banks in Bangladesh. Changes in
ownership structure affect the performance of commercial banks in Bangladesh. The
impact of changing ownership structure can be negative or positive that depends on the
proportion of changes in the ownership structure of banks in Bangladesh.
The research is based on the “Impact on Ownership structure on the performance
of listed commercial banks in Bangladesh’’. The main objective of this research is to
find out the impact of ownership structure on the performance of listed 30 commercial
banks in Bangladesh. There is a strong relationship between ownership structure and
the performance of listed commercial banks in Bangladesh. Ownership can be defined
as the distribution of equity of entity among the different groups. In general share of
company can be purchased by different types groups such as directors &sponsors,
institutions, government of the country, foreign investor and general public.

Performance of a bank can be measured by return on asset (ROA), return on equity

(ROE), profit margin and net profit margin. Shareholders of a bank evaluate a bank by
the performance of the bank in recent and previous period. In this research paper I shall
try to find out the impact of the ownership structure on the performance of the listed
commercial banks in Bangladesh.

In Bangladesh stated-owned commercial banks are built up to promote the financial

condition of the country and public welfare. In our country most of the ownership of the
state owned commercial banks hold by government of our country. The controller of the
bank does take any decision that would be harmful for the country. In our country state
owned bank increase its lending during election time. Most of the loans with big amount
are controlled by political power, due to this reason state owned commercial bank face

10
higher amount of Non-Performing Loan. Most of the year state owned bank shows loss
amount. In Bangladesh the relationship between government ownership and
performance of commercial banks should be negative or neutral.

In Bangladesh different financial and non-financial institutions invest their surplus

money to earn profit. All of the institutions invest their surplus money in the bank on the
based on financial performance of the bank. So the relationship between institutional
ownership and performance of commercial bank should be positive in Bangladesh.

Establishment of foreign commercial banks in a country upgrades investment in

capitalization and competitiveness of financial establishments which find out better
expertise which is followed by our domestic commercial banks to improve the structure
of financial market in our country. In Bangladesh foreign owned commercial bank less
NPL than domestic commercial bank. Foreign owned commercial bank maintain lower
interest margin the domestic commercial bank and also foreign owned commercial bank
earn more revenue than domestic commercial bank in Bangladesh. So the relationship
between foreign ownership and performance of commercial bank should be positive.

In Bangladesh majority portion of ownership of commercial bank hold by the directors

and sponsors of the bank. As far as we know that the owners of the firm take the
financial and policy making decision that would be better for their investment .so the
relationship between director & sponsor ownership and financial performance of
commercial bank should be positive.

In Bangladesh general public invest their surplus money in different institutions with the
object to earn profit. General public invest in the firm that shows better performance
than other firms. So the relationship between general public ownership and financial
performance of commercial bank should be positive.

There are many research analysts who conducted research on the relationship between
ownership structure and the performance of commercial banks, many of them found
positive relationship between ownership structure and commercial banks and others

11
found moderate and negative relationship between ownership structure and the
performance of commercial banks of a country.

Ataur Rahman& Nabila Maruf (2013), Studied on ownership structure and performance
of commercial bank in Bangladesh. They divided banks into three groups according to
their ownership structure. If a certain bank has more than 50% of its ownership trusted
to particular class of owner, then they categorized that bank according to that class.
They found two types of ownership such as director &sponsor and public ownership that
dominate the performance of the banks in Bangladesh. The study contained data of 28
banks in Bangladesh. The study found seven banks with director & sponsor ownership
domination and eleven banks with public ownership domination. Rest of banks did not
show any kind of domination and that banks can be categorized as mixed banks. There
was no bank with institutional ownership domination. Their study addressed the effect of
ownership structure and concentration on efficiency of Bangladeshi private commercial
banks. They calculated efficiency considering banks as production units and using input
oriented radial DEA technology. Then regressed those scores with ownership
concentration data controlling firm level attributes, they found that increasing ownership
shares have a diminishing effect on firm level efficiency. Such results were in the spirit
of market economy and had been found on other studies done on comparable
economies as well. Cull and Martinez Peria (2001) and Robert Lensink et. al. (2008),
argued that the existence of foreign bank or ownership of domestic banks declines
availability access to smaller lender and also concluded that foreign ownership inversely
affects the financial performance and cost efficiency of banks in Central & Eastern
Europe and central. Rahman &Reja (2015), studied on ownership structure and bank
performance of banks in Malaysia. The study covered the data of commercial banks in
Malaysia over the 2000–2011 period. The study concluded that different types of
ownership structure present different impact to the bank performance. The results
showed that insider ownership and government ownership had significant impact to
changes in bank performance. However, the inconsistent results of insider ownership
with the hypothesis implies that the existing shares hold by insider was not sufficient to
align the interest of the insider with those of the managers and thus, deter them to work
towards maximizing the shareholders' interests or

12
increase the banks ‘performance. The effects of institutional ownership to bank
performance could not be concluded as the results showed that institutional ownership
was only significant to ROE but insignificant to ROA. Meanwhile, the insignificant results
of family ownership and foreign ownership suggested that both types of ownership
structure did not have significant impacts to the bank performance.

Hong son & khanh (2015), Studied on Impact of Ownership Structure and Bank
Performance. They used the data of 44 banks in the banking system in Vietnam from
2010-2012The study found that Return on Asset (ROA) of banks was strongly affected
by ownership concentration and they move in the same direction. This could be
explained by the fact that all five biggest shareholders of banks participated in the Board
of Directors, as a result, according the theory of agency, the interest conflict between
owners and managers might not exist. Thus, the boards of directors had great influence
on business decisions of banks, ensuring the goal of maximizing profit. In commercial
banks in Vietnam, encouraged shareholders whether private or state ones, to join the
Board of Directors will increase Return on Asset (ROA). Similar to ROA, Return on
Equity (ROE) of Vietnamese commercial banks was also strongly affected by the
ownership concentration. Especially, the regression model used three independent
variables including percentage of private ownership, NPL and corporate governance of
banks was able to explain 70% of ROE change. That suggested that the context of
restructuring commercial banks of Vietnam, corporate governance capacity including
the role of the Board of Directors, the role of shareholders and transparency might
positively affect the ROE of Vietnamese commercial banks. IN both models measured
dependent variables ROA and ROE, NPL had statistical implication as well as negative
effect on profitability of banks. It can be seen that, in the period of restructuring, tackling
bad debts plays an important part in improving the profitability of commercial banks in
Vietnam. The percentage of private ownership in both models measured dependent
variables ROA and ROE presents a positive relationship with profitability. This result
showed that the increase in privatization through privatization of Vietnamese
commercial banks would facilitate the profitability of banks. When privatization was
encouraged, transparency and disclosure of information would be more tightly
13
controlled and monitored as more shareholders are engaged in, and therefore, will
pressure banks to operate in a healthier manner and more effectively. Davis Ombati
Ogega (2014), Studied on the effect of ownership structure on the financial
Performance of commercial banks in kenya. Using data from the period between 2009
and 2013.The study concluded that ownership structure positively affects the financial
performance of commercial banks in Kenya. They also concluded that there was strong
positive relationship between ownership structure and financial performance of
commercial banks in Kenya. The study concludes that foreign ownership, domestic
ownership, government ownership and ownership concentration positively affect the
performance of commercial banks in Kenya. The study also concludes that foreign
ownership, domestic ownership, government ownership and ownership concentration
significantly affect the performance of commercial bank in Kenya. Alejandro Micco
(2007), Studied on Bank ownership and performance. Using data from the period
between 1995 and 2002. This paper found that State-owned banks located in
developing countries are less profitable than their private commercial bank and that the
difference between the performance of public and private banks increases during
elections years. The study found that bank lending increased during election years due
to expansion in the supply of loans by state-owned banks. It is important to notice that
the outcome of the study did not really infer that state-owned banks play no role in
development. Indeed, the development and political perspective should not be viewed
as corner solutions without any intermediate possibility; it is possible that a development
mandate co-exists with some political lending. The key challenge for future research is
to understand under what circumstances, the potential advancements of the
development can exceed the inefficiencies and the corruption generated by the
expansion of political loan.

14
 Chapter -4

Descriptive Statistical Analysis

4.01. Financial performance

Table 01: Average Return on Asset

Average Return on Asset

Year 2017 2018 2019 2020 2021
ROA 0.83% 1.00% 0.96% 0.89% 0.73%

Figure 01. Average Return on Asset

Average Rrturn on Asset

1.20%

1.00% 1.00% 0.96%

0.89%
0.80% 0.83%
0.73%
0.60%

0.40%

0.20%

0.00%
2013 2014 2015 2016 2017

In this section shows trend analysis of financial performance of 30 commercial bank in

Bangladesh that are listed in Dhaka Stock Exchange (DSE). Results in figure.1
represents that average return on asset of commercial bank in Bangladesh for the year

15
2017 was 0.83%. In the year 2018 average return on asset rose to 1.00%. In the year
for 2019 average return on asset reduced to 0.96%, in the year for 2020 average return
on asset also reduced to 0.89% and finally in the year for 2021 average return on asset
of commercial bank in Bangladesh also reduced to 0.73 %. Overall average return on
asset of 30 commercial bank in Bangladesh has been reduced at the rate of 11.91%
over the previous five years.

4.02. Average director and sponsor ownership

Table .2: Average director & sponsor ownership

Average director & sponsor ownership

Year 2017 2018 2019 2020 2021

DIR 36.38% 36.71% 35.99% 35.71% 34.55%

Figure 02. Average director & sponsor ownership

Average director & sponsor ownership

37.00%
36.71%
36.50% 36.38%
36.00% 35.99%
35.71%
35.50%
35.00%
34.50% 34.55%
34.00%
33.50%
33.00%
2013 2014 2015 2016 2017

In this section shows trend analysis of average director& sponsor ownership of 30

16
commercial bank in Bangladesh that are listed in Dhaka Stock Exchange (DSE).
Results in figure.2 indicates that average director and sponsor ownership of commercial
bank in Bangladesh for the year 2013 was 36.38%. In the year 2017 average director &
sponsor ownership increased to 36.71%. In the year for 2018 average director &
sponsor ownership declined to 35.99%, in the year for 2019 average director & sponsor
ownership also declined to 35.71% and finally in the year for 2020 average director &
sponsor ownership of commercial bank in Bangladesh also declined to 34.55 %. Overall
average director & sponsor ownership of 30 commercial bank in Bangladesh has been
declined at the rate of 5.03% over the year from 2017 to 2021.

5.03. Average Institutional Ownership

Table. 3: Average institution ownership

Average institutional ownership

Year 2017 2018 2019 2020 2021
INS 13.69% 15.62% 16.45% 17.52% 15.99%

Figure 03. Average institutional ownership

Average institutional ownership

18.00% 17.52%
16.45%
16.00% 15.62% 15.99%
14.00% 13.69%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2013 2014 2015 2016 2017

17
In this section shows trend analysis of average institutional ownership of 30 commercial
bank in Bangladesh that are listed in Dhaka Stock Exchange (DSE). Results in figure.2
indicates that average institutional ownership of commercial bank in Bangladesh for the
year 2013 was 13.69%. In the year 2017 average institutional ownership increased to
15.62%, In the year for 2018 average institutional ownership increased to 16.45%, in
the year for 2019 average institutional ownership also increased to 17.52% and finally in
the year for 2020 average institutional ownership of commercial bank in Bangladesh
declined to 15.99%. Overall average institutional ownership of 30 commercial bank in
Bangladesh that are listed in Dhaka Stock Exchange (DSE) has been increased at the
rate of 16.79% over the year from 2017 to 2021.

4.04. Average Foreign Ownership

Table.4: Average foreign ownership

Average foreign ownership

Year 2017 2018 2019 2020 2021
FOR 2.84% 3.42% 2.92% 3.07% 4.40%

Figure 04. Average foreign ownership

Avearge foreign ownership

4.50% 4.40%
4.00%
3.50% 3.42%
3.00% 2.84% 2.92% 3.07%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
2013 2014 2015 2016 2017

18
 In this section shows trend analysis of average foreign ownership of 30 commercial
bank in Bangladesh that are listed in Dhaka Stock Exchange (DSE). Results in figure.2
indicates that average foreign ownership of commercial bank in Bangladesh for the year
2017 was 2.84%. In the year 2018 average foreign ownership rose to 3.42%. In the year
for 2015 average foreign ownership reduced to 2.92%, in the year for 2019 average
foreign ownership increase to 3.07% and finally in the year for 2020 average foreign
ownership of commercial bank in Bangladesh also increased to 4.40 %. Overall average
foreign ownership of 30 commercial bank in Bangladesh that are listed in Dhaka Stock
Exchange (DSE) has been increased at the rate of 55.37% over the year from 2017 to
2021.

4.05. Average Public Ownership

Table.5: Average public ownership

Average public ownership

Year 2017 2018 2019 2020 2021
PUB 42.47% 39.56% 39.91% 38.62% 36.40%

19
 Figure 05. Average public ownership

Average public ownership

43.00%
42.47%
42.00%
41.00%
40.00% 39.91%
39.56%
39.00%
38.62%
38.00%
37.00%
36.40%
36.00%
35.00%
34.00%
33.00%
2013 2014 2015 2016 2017

In this section shows trend analysis of average public ownership of 30 commercial bank
in Bangladesh that are listed in Dhaka Stock Exchange (DSE). Results in figure.2
indicates that average public ownership of commercial bank in Bangladesh for the year
2017 was 42.47%. In the year 2018 average public ownership decline to 39.56%. In the
year for 2019 average public ownership rose to 39.51%. In the year for 2020 average
public ownership declined to 38.62% and finally in the year for 2021 average public
ownership of commercial bank in Bangladesh also declined to 36.40%. Overall average
public ownership of 30 commercial bank in Bangladesh that are listed in Dhaka Stock
Exchange (DSE) has been declined at the rate of 14.29% over the year from 2017 to
2021.

20
 Chapter -5

Data Analysis and Interpretation

This chapter shows the research findings on the effect of ownership structure on the
performance of commercial banks in Bangladesh. For this purpose, I have taken
ownership structure data of 30 commercial banks of last 5 years’ data from 2017 to
2021 to find the impact of ownership structure on the performance of listed commercial
banks in Bangladesh.

5.01Coefficient of correlation

Coefficient of correlation is a statistic which represents a relation between the

independent variable and dependent variable. Coefficient of correlation can be also
defined as a rate at which dependent variable changes due to one unit change in
independent variable. The rate can be either positive or negative. I have found the
following results -

Table 06. Impact of ownership structure on Return on Asset (ROA)

Variables Coefficient t value p value

Director and sponsor ownership 0.0106 3.46 0.001

Institutional ownership 0.0004 0.10 0.921

Government ownership Omitted
Foreigner ownership -0.0459 -9.41 0.000
Public ownership 0.0100 3.01 0.003
_cons 0.0025 1.05 0.295

Note. In this analysis Return on Asset (ROA) is my dependent variable

In case of fixed effect model in Stata, coefficients analysis predicts that for one percent
increase of director and sponsor ownership return on asset (ROA) will increase by
0.0106. In case of intuitional ownership for one percent increase in institutional

21
ownership, return on asset (ROA) will increase by 0. 0004.In case of foreign ownership
for one percent increase in foreign ownership, return on asset (ROA) will decline by
0.0459 and in case of public ownership one percent increase in public ownership, return
on asset (ROA) will increase by 0.0100, if all other independent variable remains
constant. Government ownership is omitted because of collinearity problem.

5.02. Analysis of p– value

P value is used to measure whether there is a linier relationship between dependent

variable and single independent variable. Null hypothesis represents there is a non-
linier relationship between dependent variable and single independent variable. Lower p
value reject the null hypothesis and higher p value accepts the null hypothesis that
means lower P value represents there is linier relationship between dependent variable
and single independent variable, higher p value represents there is a non-linier
relationship between dependent variable and single independent variable.

P- value shows that director &sponsor ownership, foreign ownership and public
ownership show lower level of significance (less than 5%) so null hypothesis is rejected
that means there is a linier relationship between return on asset(ROA) and 3
independent variables director and sponsor ownership, foreign ownership and public
ownership. So director &sponsor ownership, foreign ownership and public ownership
are the significant variable of this model. They can be explained by 95% level of
confidence.

On the other hand, institutional ownership shows higher level of significance so it

accepts null hypothesis that means there is a non-linier relationship between return on
asset (ROA) and institutional ownership. so it can be said that except institutional
ownership other three independent variables director ownership, foreign ownership and
public ownership are significant to explain dependent variable (ROA).

22
 2
5.03. Correlation of determination R
2
Correlation of determination renowned as R is widely used to determine the proportion
of variability in dependent variable is explained by the independent variables. The range
of correlation of determination is from 0 to 1. The higher correlation of determination
indicates better model. I have found the following results –

Table 07. Correlation of Determination

R Within =0.5459 Observations Minimum =30 Number of observations

squared Between per group Average =30.0 =150
=0.3197 Maximum =30 Number of group=5
Overall =0.5427

2
In the above table we see that the value overall R is 0.5427which indicates that about
54.27% of total variability in the Return on Asset is explained by the independent
variables – director & sponsor ownership, institutional ownership, foreign ownership and
public ownership. The reaming proportion 45.73% is the standard error of the model
which may be affected by other variables outside of the model.

23
 Chapter -6

Conclusion
6.01. Conclusion

Ownership structure of a bank can be defined as distribution of equity of the bank

among different shareholder groups. Ownership structure is an important variable
among others variable that effect the financial performance of commercial bank. The
objective of this research is to find the impact of ownership structure on the
performance of listed commercial banks in Bangladesh. Previous various research
evidence showed that there is strong relationship between ownership structure and
performance of commercial banks. This research report shows the different types of
ownership and those affect the performance of commercial banks in Bangladesh.

For this research purpose data is collected from the annual report of commercial banks
in Bangladesh. This research report contains data of 30 commercial banks in
Bangladesh from the year 2017 to 2021 that are listed in Dhaka Stock Exchange(DSE).
I have taken Return on Asset (ROA) as dependent variable and there are five types of
ownership that are director &sponsor ownership, institutional ownership, government
ownership, foreign ownership and public ownership.

Descriptive statistical analysis shows that average return on asset has been declined
over the previous five years except the year of 2018.In case of ownership structure,
average director & sponsor ownership has been declined over the previous five years
except in the year of 2018, average institutional ownership has been increased over the
previous five years except in the year of 2021,average foreign ownership has been
increased over the previous five years except in the year of 2019 and finally average
public ownership has been declined over the previous five years .

Correlation of regression shows that director & sponsor ownership, institutional

ownership and public ownership have positive coefficient with the dependent variable
on the other hand foreign ownership has negative coefficient with the dependent

24
variable. P value analysis shows that director &sponsor ownership, foreign ownership
and public ownership have lower level of significance (less than 5%). So director
&sponsor ownership, foreign ownership and public ownership reject the null hypothesis.
That means there is a linear relationship between return on asset (independent
variable) and three independent variables - director &sponsor ownership, foreign
ownership and public ownership. That also indicates that director &sponsor ownership,
foreign ownership and public ownership are the significant variables in the model. On
the other hand, institutional ownership has higher level of significance. so it accepts null
hypothesis that means there is a non-linier relationship between return on asset (ROA)
and institutional ownership.

In summary it can be said that director & sponsor ownership and public ownership have
positive effect on the performance of commercial banks in Bangladesh on the hand
foreign ownership has negative effect on the performance of commercial banks in
Bangladesh.

25
 References

Rahman, A. F. M. A., & Maruf, N. (2013). Ownership Structure and Performance:

A Study on Bangladeshi Private Commercial Banks.Journal of Business and
Policy Research ,8 (2), 69-82.

Cull, R., Peria, M., & Clarke, G. (2001). Does foreign bank penetration reduce
access to credit in developing countries? Evidence from asking borrowers . The
World Bank.

Lensink, R., Meesters, A., & Naaborg, I. (2008). Bank efficiency and foreign
ownership: Do good institutions matter?. Journal of Banking & Finance , 32 (5),
834-844.

Shabbir, M. K. (2018). Ownership concentration and firm performance: evidence

from the banking sector of Pakistan. Journal Homepage: http://www. ijmra. us , 8
(9).

Son, N. H., Tu, T. T. T., Cuong, D. X., Ngoc, L. A., & Khanh, P. B. (2015). Impact
of ownership structure and bank performance-an empirical test in Vietnamese
banks.International Journal of Financial Research ,6 (4), 123.

Ogega, D. O. (2014). The effect of ownership structure on the financial

performance of commercial banks in Kenya. Unpublished M. Sc. Dissertation),
Department of Finance and Accounting, University of Nairobi, Kenya .

Micco, A., Panizza, U., & Yanez, M. (2007). Bank ownership and performance.
Does politics matter?.Journal of Banking & Finance ,31 (1), 219-241.

26
 Appendices

Appendix -1: Commercial banks:

This research paper contains data of 30 commercial banks that are listed in Dhaka
Stock Exchange (DSE) among 60 commercial banks in Bangladesh. The list of 30
commercial banks is given below-

1 AB Bank Limited
2 Al-Arafah Islami Bank Limited
3 Bank Asia Limited
4 BRAC Bank Limited
5 Dhaka Bank Limited
6 Dutch-Bangla Bank Limited
7 Eastern Bank Limited
8 EXIM Bank Limited
9 First Security Islami Bank Limited
10 ICB Islamic Bank Ltd.
11 IFIC Bank Limited
12 Islami Bank Bangladesh Ltd
13 Jamuna Bank Ltd
14 Mercantile Bank Limited
15 Mutual Trust Bank Limited
16 National Bank Limited
17 National Credit & Commerce Bank Ltd
18 One Bank Limited
19 Premier Bank Limited
20 Prime Bank Ltd
21 Pubali Bank Limited
22 Rupali Bank Limited
23 Shahjalal Islami Bank Limited
24 Social Islami Bank Ltd.

27
 25 Southeast Bank Limited
26 Standard Bank Limited
27 The City Bank Ltd.
28 Trust Bank Limited
29 United Commercial Bank Limited
30 Uttara Bank Limited

Appendix -2: Summery of Date

Ownership structure and performance

From 2017 to 2021

Bank Year ROA DIR INS GOV FOR PUB

ABBL 2017 0.0053 0.1391 0.5486 0.0000 0.0065 0.2966
ABBL 2018 0.0054 0.1391 0.5286 0.0000 0.0219 0.2986
ABBL 2019 0.0048 0.1390 0.5706 0.0000 0.0184 0.2639
ABBL 2020 0.0044 0.3658 0.2978 0.0000 0.0163 0.3125
ABBL 2021 0.0001 0.3647 0.2636 0.0000 0.0197 0.3432
Al arafah islamic bank 2017 0.0131 0.4305 0.1007 0.0000 0.0000 0.4688
Al arafah islamic bank 2018 0.0110 0.4277 0.1223 0.0000 0.0000 0.4500
Al arafah islamic bank 2019 0.0108 0.4239 0.1345 0.0000 0.0000 0.4416
Al arafah islamic bank 2020 0.0123 0.4194 0.1752 0.0000 0.0000 0.4054
Al arafah islamic bank 2021 0.0099 0.4163 0.1710 0.0000 0.0000 0.4127
Bank Asia 2017 0.0096 0.4771 0.2612 0.0000 0.0032 0.2205
Bank Asia 2018 0.0128 0.4647 0.3024 0.0000 0.0032 0.1860
Bank Asia 2019 0.0126 0.4647 0.3089 0.0000 0.0032 0.1762
Bank Asia 2020 0.0065 0.4532 0.3267 0.0000 0.0039 0.1727
Bank Asia 2021 0.0076 0.5166 0.2426 0.0000 0.0065 0.1617
Brac Bank 2017 0.0078 0.5001 0.0441 0.0000 0.0000 0.4530
28
Brac Bank 2018 0.0109 0.5001 0.0637 0.0000 0.0000 0.4347
Brac Bank 2019 0.0113 0.5001 0.0261 0.0000 0.0000 0.4727
Brac Bank 2020 0.0189 0.4457 0.0226 0.0000 0.0000 0.5307
Brac Bank 2021 0.0195 0.4444 0.0164 0.0000 0.0000 0.5385
City Bank 2017 0.0130 0.3122 0.0989 0.0000 0.0000 0.5889
City Bank 2018 0.0140 0.3110 0.2190 0.0000 0.0000 0.4700
City Bank 2019 0.0190 0.2535 0.2361 0.0000 0.0000 0.5140
City Bank 2020 0.0170 0.2741 0.1800 0.0000 0.0000 0.5459
City Bank 2021 0.0140 0.3053 0.1862 0.0000 0.1516 0.3569
Dhaka Bank 2017 0.0139 0.4500 0.1500 0.0000 0.0000 0.3500
Dhaka Bank 2018 0.0134 0.4500 0.1950 0.0000 0.0000 0.3200
Dhaka Bank 2019 0.0086 0.3900 0.1700 0.0000 0.0000 0.3800
Dhaka Bank 2020 0.0077 0.3910 0.1773 0.0000 0.0015 0.3654
Dhaka Bank 2021 0.0069 0.3962 0.1809 0.0000 0.0013 0.3787
DBBL 2017 0.0120 0.6130 0.0410 0.0000 0.2570 0.0890
DBBL 2018 0.0110 0.6130 0.0280 0.0000 0.2570 0.1020
DBBL 2019 0.0130 0.6130 0.0640 0.0000 0.2570 0.0660
DBBL 2020 0.0070 0.6130 0.0700 0.0000 0.2570 0.0600
DBBL 2021 0.0090 0.6130 0.0470 0.0000 0.2570 0.0830
EBL 2017 0.0168 0.3157 0.1149 0.0000 0.0000 0.5694
EBL 2018 0.0128 0.3157 0.1149 0.0000 0.0000 0.5694
EBL 2019 0.0123 0.3157 0.1088 0.0000 0.0000 0.5755
EBL 2020 0.0133 0.3156 0.1041 0.0000 0.0000 0.5803
EBL 2021 0.0104 0.3156 0.1042 0.0000 0.0000 0.5802
EXIM Bank 2017 0.0104 0.4791 0.1651 0.0000 0.0029 0.3484
EXIM Bank 2018 0.0115 0.4775 0.1847 0.0000 0.0043 0.3294
EXIM Bank 2019 0.0084 0.4710 0.1943 0.0000 0.0092 0.3215
EXIM Bank 2020 0.0109 0.4283 0.2122 0.0000 0.0126 0.3374
EXIM Bank 2021 0.0106 0.4158 0.1736 0.0000 0.0410 0.3664
FSIB 2017 0.0042 0.5128 0.1316 0.0000 0.0000 0.3449

29
FSIB 2018 0.0038 0.4928 0.1407 0.0000 0.0122 0.3511
FSIB 2019 0.0031 0.4956 0.1969 0.0000 0.0117 0.2935
FSIB 2020 0.0051 0.4800 0.1827 0.0000 0.0277 0.3078
FSIB 2021 0.0041 0.3420 0.0496 0.0000 0.0017 0.4604
ICB 2017 - 0.0680 0.1780 0.0000 0.5298 0.2306
0.0476
ICB 2018 - 0.0680 0.1634 0.0000 0.5298 0.2381
0.0133
ICB 2019 - 0.0680 0.1634 0.0000 0.5298 0.2381
0.0111
ICB 2020 - 0.0680 0.1596 0.0000 0.5298 0.2419
0.0221
ICB 2021 - 0.0680 0.1551 0.0000 0.5298 0.2467
0.0344
IFIC bank 2017 0.0109 0.1131 0.1819 0.0000 0.0045 0.3730
IFIC bank 2018 0.0107 0.1131 0.1947 0.0000 0.0043 0.3604
IFIC bank 2019 0.0053 0.0848 0.2144 0.0000 0.0043 0.3690
IFIC bank 2020 0.0065 0.0848 0.2434 0.0000 0.0070 0.3373
IFIC bank 2021 0.0092 0.0592 0.2153 0.0000 0.0193 0.3787
Islami bank 2017 0.0074 0.5885 0.0000 0.0000 0.0000 0.4115
Islami bank 2018 0.0052 0.5837 0.0619 0.0000 0.1476 0.2067
Islami bank 2019 0.0044 0.5876 0.0000 0.0000 0.0000 0.4224
Islami bank 2020 0.0059 0.7169 0.0000 0.0000 0.0000 0.2831
Islami bank 2021 0.0055 0.7169 0.0000 0.0000 0.0000 0.2831
Jamuna Bank 2017 0.0101 0.5812 0.1055 0.0000 0.0010 0.3123
Jamuna Bank 2018 0.0106 0.6233 0.1082 0.0000 0.0013 0.2672
Jamuna Bank 2019 0.0116 0.6212 0.1111 0.0000 0.0007 0.2670
Jamuna Bank 2020 0.0121 0.4979 0.1133 0.0000 0.0000 0.3888
Jamuna Bank 2021 0.0121 0.4979 0.1133 0.0000 0.0000 0.3888
Mercentile bank 2017 0.0133 0.3962 0.0768 0.0000 0.0000 0.5269

30
Mercentile bank 2018 0.0076 0.3939 0.0672 0.0000 0.0000 0.5389
Mercentile bank 2019 0.0079 0.3679 0.0719 0.0000 0.0000 0.5602
Mercentile bank 2020 0.0115 0.3729 0.0780 0.0000 0.0000 0.5489
Mercentile bank 2021 0.0130 0.3746 0.1920 0.0000 0.0858 0.3475
MTB 2017 0.0059 0.4790 0.2247 0.0000 0.0000 0.2962
MTB 2018 0.0088 0.4448 0.2505 0.0000 0.0000 0.3047
MTB 2019 0.0104 0.4469 0.2549 0.0000 0.0000 0.2982
MTB 2020 0.0094 0.3718 0.2242 0.0000 0.0000 0.4040
MTB 2021 0.0108 0.3662 0.2226 0.0000 0.0000 0.4111
NBL 2017 0.0096 0.3004 0.1596 0.0000 0.0232 0.5120
NBL 2018 0.0108 0.3004 0.1596 0.0000 0.0232 0.5120
NBL 2019 0.0143 0.3004 0.2260 0.0000 0.0232 0.4458
NBL 2020 0.0190 0.2800 0.2100 0.0000 0.0290 0.4780
NBL 2021 0.0143 0.2800 0.1950 0.0000 0.0310 0.4900
NCC 2017 0.0091 0.2964 0.1059 0.0000 0.0022 0.5955
NCC 2018 0.0116 0.2966 0.1029 0.0000 0.0019 0.5986
NCC 2019 0.0097 0.2931 0.1175 0.0000 0.0018 0.5876
NCC 2020 0.0130 0.3751 0.1583 0.0000 0.0013 0.4653
NCC 2021 0.0094 0.3698 0.1801 0.0000 0.0016 0.4485
One bank 2017 0.0143 0.3106 0.0000 0.0000 0.0000 0.6894
One bank 2018 0.0187 0.3034 0.0000 0.0000 0.0000 0.6966
One bank 2019 0.0139 0.3036 0.0000 0.0000 0.0000 0.6964
One bank 2020 0.0120 0.3002 0.0000 0.0000 0.0000 0.6998
One bank 2021 0.0105 0.3004 0.1509 0.0000 0.0672 0.4815
Premier bank 2017 0.0088 0.4692 0.1167 0.0000 0.0035 0.4106
Premier bank 2018 0.0078 0.4836 0.1486 0.0000 0.0033 0.3644
Premier bank 2019 0.0079 0.4885 0.1837 0.0000 0.0025 0.3252
Premier bank 2020 0.0111 0.3392 0.2060 0.0000 0.0019 0.4528
Premier bank 2021 0.0113 0.3092 0.2060 0.0000 0.0300 0.4528
Prime bank 2017 0.0076 0.4053 0.2192 0.0000 0.0137 0.3579

31
Prime bank 2018 0.0096 0.4053 0.2192 0.0000 0.0137 0.3579
Prime bank 2019 0.0084 0.3937 0.2529 0.0000 0.0037 0.3468
Prime bank 2020 0.0086 0.3882 0.2116 0.0000 0.0037 0.3341
Prime bank 2021 0.0038 0.3804 0.2432 0.0000 0.0375 0.3362
Pubali bank 2017 0.0101 0.2888 0.2516 0.0000 0.0000 0.4596
Pubali bank 2018 0.0124 0.2888 0.2516 0.0000 0.0000 0.4596
Pubali bank 2019 0.0101 0.2888 0.2516 0.0000 0.0000 0.4596
Pubali bank 2020 0.0042 0.2888 0.2516 0.0000 0.0000 0.4596
Pubali bank 2021 0.0040 0.3005 0.2433 0.0000 0.0000 0.4562
Rupali bank 2017 0.0021 0.0000 0.0000 0.0000 0.0000 0.0981
Rupali bank 2018 0.0018 0.0000 0.0000 0.0000 0.0000 0.0981
Rupali bank 2019 0.0008 0.0000 0.0000 0.0000 0.0000 0.0981
Rupali bank 2020 - 0.0000 0.0000 0.0000 0.0000 0.0981
0.0036
Rupali bank 2021 0.0016 0.0000 0.0000 0.0000 0.0000 0.0981
sahajalal islamic bank 2017 0.0100 0.4472 0.0000 0.0000 0.0000 0.5528
sahajalal islamic bank 2018 0.0059 0.4512 0.0000 0.0000 0.0000 0.5488
sahajalal islamic bank 2019 0.0098 0.4383 0.0000 0.0000 0.0000 0.5617
sahajalal islamic bank 2020 0.0102 0.4104 0.3388 0.0000 0.0000 0.2508
sahajalal islamic bank 2021 0.0064 0.4434 0.1937 0.0000 0.0000 0.3629
SIBL 2017 0.0167 0.2774 0.1451 0.0000 0.0004 0.5771
SIBL 2018 0.0236 0.3047 0.2185 0.0000 0.0004 0.4764
SIBL 2019 0.0208 0.3404 0.2102 0.0000 0.0049 0.4394
SIBL 2020 0.0206 0.3376 0.3258 0.0000 0.0000 0.3239
SIBL 2021 0.0140 0.0000 0.0000 0.0000 0.0000 0.0000
Southeast 2017 0.0164 0.1610 0.2819 0.0000 0.0000 0.5571
Southeast 2018 0.0167 0.1812 0.2313 0.0000 0.0000 0.5874
Southeast 2019 0.0123 0.1832 0.3067 0.0000 0.0000 0.5101
Southeast 2020 0.0088 0.1533 0.3597 0.0000 0.0000 0.4870
Southeast 2021 0.0037 0.3233 0.3585 0.0000 0.0000 0.3182

32
Standard Bank 2017 0.0099 0.4001 0.0522 0.0000 0.0000 0.5218
Standard Bank 2018 0.0106 0.4347 0.0522 0.0000 0.0000 0.4554
Standard Bank 2019 0.0127 0.4280 0.0263 0.0000 0.0000 0.4879
Standard Bank 2020 0.0076 0.4264 0.0248 0.0000 0.0000 0.4646
Standard Bank 2021 0.0076 0.3500 0.1100 0.0000 0.0000 0.4700
Trust bank 2017 0.0031 0.6000 0.2039 0.0000 0.0027 0.1897
Trust bank 2018 0.0099 0.6000 0.2150 0.0000 0.0019 0.1799
Trust bank 2019 0.0095 0.6000 0.2106 0.0000 0.0055 0.1811
Trust bank 2020 0.0103 0.6000 0.2111 0.0000 0.0151 0.1811
Trust bank 2021 0.0077 0.6000 0.1702 0.0000 0.0183 0.2084
United Commercial bank 2017 0.0141 0.3631 0.0494 0.0000 0.0000 0.5784
United Commercial bank 2018 0.0149 0.4202 0.1938 0.0000 0.0000 0.3779
United Commercial bank 2019 0.0142 0.3695 0.1415 0.0000 0.0000 0.4809
United Commercial bank 2020 0.0084 0.3902 0.1286 0.0000 0.0000 0.4737
United Commercial bank 2021 0.0070 0.3702 0.2093 0.0000 0.0000 0.4124
Uttara bank 2017 0.0099 0.1396 0.0988 0.0000 0.0000 0.7616
Uttara bank 2018 0.0099 0.1256 0.1472 0.0000 0.0000 0.7272
Uttara bank 2019 0.0099 0.1256 0.1820 0.0000 0.0000 0.6924
Uttara bank 2020 0.0094 0.1259 0.2639 0.0000 0.0147 0.5956
Uttara bank 2021 0.0087 0.1258 0.2035 0.0000 0.0222 0.6485

Appendix -3: Regression results

. xtreg roa dir ins gov for pub, fe

note: gov omitted because of collinearity

Fixed-effects (within) regression Number of obs = 150

Group variable: year Number of groups = 5

33
R-sq: within = 0.5459 Obs per group: min = 30
between = 0.3197 avg = 30.0
overall = 0.5427 max = 30

F(4,141) = 42.38
corr(u_i, Xb) = 0.0043 Prob > F = 0.0000

------------------------------------------------------------------------------
roa | Coef. Std. Err. t P>|t| [95% Conf. Interval]
------------- +----------------------------------------------------------------

dir | .0105969 .0030609 3.46 0.001 .0045457 .0166482

ins | .0004488 .0045422 0.10 0.921 -.0085307 .0094284
gov | 0 (omitted)
for | -.0459805 .0048888 -9.41 0.000 -.0556454 -.0363156
pub | .0100357 .0033386 3.01 0.003 .0034356 .0166358
_cons | .0025004 .00238 1.05 0.295 -.0022048 .0072056
------------- +----------------------------------------------------------------

sigma_u | .00089152
sigma_e | .00558955
rho | .02480811 (fraction of variance due to u_i)
------------------------------------------------------------------------------
F test that all u_i=0: F(4, 141) = 0.76 Prob > F = 0.5531

34