The impact of banking sector financial performance on the economic growth in Bangladesh
SM Nahidul Islam, Dr. Md. Ruhul Amin, Md Sazib Molla
This study mainly examines the impact of banking sector financial performance on the economic growth in Bangladesh. Here, 16 commercial banks that are operating in the country have been considered. These companies are observed over the period of 10 years (2008-2017) giving rise to 160 panel observations. In this study, Gross Domestic Product Growth Rate as a measure of economic growth has been used as a dependent variable. Whereas, Bank Size, Return on Equity, Return on Investment and Operating Profit Growth Rate taken as a representative of banking sector financial performance have been used as explanatory variables. The result of our study provide evidence that all the explanatory variables have statistically significant influence on the Gross Domestic Product Growth Rate meaning that the banking sector financial performance has significant impact on the economic growth in Bangladesh. This study suggests that the concerned authority should give emphasis on the development of the banking sector thereby accelerating the economic growth. This study obviously provides some noteworthy information to researchers, governments, financial analysts, banking policy makers and supervisory authorities.