First and second-generation commercial banks in Bangladesh: A comparative financial analysis

https://doi.org/10.35912/amor.v5i4.1868
Published: May 2, 2024

Abstract:

Purpose: This study assesses the overall performance of commercial banks in Bangladesh by classifying them into first- and second-generation groups.

Research Methodology: The investigation encompassed secondary data from 2016 to 2020, along with a meticulous examination of the ratios of ten banks during that timeframe. Standard software such as the Microsoft Office package was utilized for conducting horizontal, vertical, and rational analyses. Return on assets (ROA), return on equity (ROE), and net profit margins are the primary metrics used to assess overall performance.

Results: Research indicates that the first generation excels in certain instances, while the second generation performs at its peak capacity in other cases. Therefore, a comprehensive outcome exists.

Implications: These indicators offer a concise and influential message to all stakeholders that may shape their decision-making process.

Limitations: It may be beneficial to consider a longer timeframe and gather insights from interviews with industry professionals for subsequent studies. Other factors to consider include customer insights, industry conditions, the nation's economy, monetary policy, and the global trade situation.

Novelty: This study focuses on the influence of employee retention on organizational performance in a service-oriented government institution.

Keywords:
1. First-generation
2. Second-generation
3. Return on equity
4. Economies of scale
5. Opportunity cost
Authors:
1 . S. M. Akber
R. P. Shaha University, Bangladesh
https://orcid.org/0000-0002-0267-3626
2 . Meherun Nesa Mahjabeen
Bangladesh Islami University, Bangladesh
https://orcid.org/0009-0009-7471-0287
3 . Oporbo Hossain Jumman
R. P. Shaha University, Bangladesh
https://orcid.org/0009-0009-3104-3402
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How to Cite
Akber, S. M., Mahjabeen, M. N., & Jumman, O. H. (2024). First and second-generation commercial banks in Bangladesh: A comparative financial analysis. Annals of Management and Organization Research, 5(4), 231–240. https://doi.org/10.35912/amor.v5i4.1868
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Issue & Section
Vol. 5 No. 4 (2024): May
Articles
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References

    Ahmeti, S., Hoti, A., & Alshiqi, S. (2014). Analysis of Financial Performance in the Banking System in Kosovo-the Period 2006-2012. Journal of Knowledge Management, Economics and Information Technology, IV, 2(2).

    Akber, S., & Barua, D. (2021). a Comparative Analysis of Financial Performance of Non-Bank Financial Institutions in Bangladesh. American Finance & Banking Review, 6(1), 1-13.

    Akber, S., & Jumman, O. H. (2023). Influential Economic Factors on the GDP of Bangladesh. RPSU Research Journal.

    Alsamaree, A. H. (2013). Financial ratios and the performance of banks. Journal of Research in International Business and Management, 3(1), 17-19.

    Besley, S., & Brigham, E. F. (2008). Essentials of managerial finance, 14e. Thomson Higher Education.

    Duncan, E., & Elliott, G. (2004). Efficiency, customer service and financial performance among Australian financial institutions. International Journal of Bank Marketing, 22(5), 319-342.

    Efendi, A., Putri, L. P., & Dungga, S. (2019). The effect of debt to equity ratio and total asset turnover on return on equity in automotive companies and components in Indonesia. Paper presented at the 3rd International Conference on Accounting, Management and Economics 2018 (ICAME 2018).

    Emmanuel, O. O. (2021). The dynamics of work environment and its impact on organizational objectives. Annals of Human Resource Management Research, 1(2), 145-158.

    Forozandeh, M. (2022). Optimizing the Banking Service System Using Queue Theory, Fuzzy DEMATEL and TOPSIS Approach: Case Study. Annals of Human Resource Management Research, 2(2), 87-104.

    Fukuyama, H. (1995). Measuring efficiency and productivity growth in Japanese banking: a nonparametrie frontier approach. Applied Financial Economics, 5(2), 95-107.

    Harahap, S. S. (2013). Analisis Kritis atas Laporan Keuangan: PT. RajaGrafindo Persada.

    Madura, J. (2012). Financial institutions and markets: South-Western.

    Nurullah, A., Gozali, E. O. D., Hamzah, R. S., Bakti, H., Khasman, R., & Maharani, M. A. (2024). An assessment of banking sector performance in Indonesia. International Journal of Financial, Accounting, and Management, 5(4), 407-417.

    Phina, O. N., Ogechukwuand, N. N., & Shallom, A. A. (2021). Organizational climate and employee engagement: A commercial bank perspective in Southeast Nigeria. Annals of Management and Organization Research, 2(3), 161-173.

    Phina, O. N., Patrick, O. A., & Nwabuike, C. (2022). Emotional Resilience and Employee Performance of Commercial Banks in Southeast Nigeria. Annals of Human Resource Management Research, 2(2), 105-115.

    Raza, A., Farhan, M., & Akram, M. (2011). A comparison of financial performance in investment banking sector in Pakistan. International Journal of Business and Social Science, 2(9).

    Rose, P. S. (2002). Commercial bank management: McGraw-Hill/Irwin.

    Tandon, D., Chaturvedi, A., & Vidyarthi, H. (2017). Non-performing assets and profitability of Indian banks: an econometric study. International Journal of Business Competition and Growth, 6(1), 60-76.

    Tarawneh, M. (2006). A comparison of financial performance in the banking sector: Some evidence from Omani commercial banks. International Research Journal of Finance and Economics, 3(3), 101-112.

    Zahedy, M. R., Jafari, S. A., & Ramezan, M. (2021). Examining the quality of work life: empirical testing indicators in the public organisation. Annals of Human Resource Management Research, 1(2), 99-111.

  1. Ahmeti, S., Hoti, A., & Alshiqi, S. (2014). Analysis of Financial Performance in the Banking System in Kosovo-the Period 2006-2012. Journal of Knowledge Management, Economics and Information Technology, IV, 2(2).
  2. Akber, S., & Barua, D. (2021). a Comparative Analysis of Financial Performance of Non-Bank Financial Institutions in Bangladesh. American Finance & Banking Review, 6(1), 1-13.
  3. Akber, S., & Jumman, O. H. (2023). Influential Economic Factors on the GDP of Bangladesh. RPSU Research Journal.
  4. Alsamaree, A. H. (2013). Financial ratios and the performance of banks. Journal of Research in International Business and Management, 3(1), 17-19.
  5. Besley, S., & Brigham, E. F. (2008). Essentials of managerial finance, 14e. Thomson Higher Education.
  6. Duncan, E., & Elliott, G. (2004). Efficiency, customer service and financial performance among Australian financial institutions. International Journal of Bank Marketing, 22(5), 319-342.
  7. Efendi, A., Putri, L. P., & Dungga, S. (2019). The effect of debt to equity ratio and total asset turnover on return on equity in automotive companies and components in Indonesia. Paper presented at the 3rd International Conference on Accounting, Management and Economics 2018 (ICAME 2018).
  8. Emmanuel, O. O. (2021). The dynamics of work environment and its impact on organizational objectives. Annals of Human Resource Management Research, 1(2), 145-158.
  9. Forozandeh, M. (2022). Optimizing the Banking Service System Using Queue Theory, Fuzzy DEMATEL and TOPSIS Approach: Case Study. Annals of Human Resource Management Research, 2(2), 87-104.
  10. Fukuyama, H. (1995). Measuring efficiency and productivity growth in Japanese banking: a nonparametrie frontier approach. Applied Financial Economics, 5(2), 95-107.
  11. Harahap, S. S. (2013). Analisis Kritis atas Laporan Keuangan: PT. RajaGrafindo Persada.
  12. Madura, J. (2012). Financial institutions and markets: South-Western.
  13. Nurullah, A., Gozali, E. O. D., Hamzah, R. S., Bakti, H., Khasman, R., & Maharani, M. A. (2024). An assessment of banking sector performance in Indonesia. International Journal of Financial, Accounting, and Management, 5(4), 407-417.
  14. Phina, O. N., Ogechukwuand, N. N., & Shallom, A. A. (2021). Organizational climate and employee engagement: A commercial bank perspective in Southeast Nigeria. Annals of Management and Organization Research, 2(3), 161-173.
  15. Phina, O. N., Patrick, O. A., & Nwabuike, C. (2022). Emotional Resilience and Employee Performance of Commercial Banks in Southeast Nigeria. Annals of Human Resource Management Research, 2(2), 105-115.
  16. Raza, A., Farhan, M., & Akram, M. (2011). A comparison of financial performance in investment banking sector in Pakistan. International Journal of Business and Social Science, 2(9).
  17. Rose, P. S. (2002). Commercial bank management: McGraw-Hill/Irwin.
  18. Tandon, D., Chaturvedi, A., & Vidyarthi, H. (2017). Non-performing assets and profitability of Indian banks: an econometric study. International Journal of Business Competition and Growth, 6(1), 60-76.
  19. Tarawneh, M. (2006). A comparison of financial performance in the banking sector: Some evidence from Omani commercial banks. International Research Journal of Finance and Economics, 3(3), 101-112.
  20. Zahedy, M. R., Jafari, S. A., & Ramezan, M. (2021). Examining the quality of work life: empirical testing indicators in the public organisation. Annals of Human Resource Management Research, 1(2), 99-111.