Probashi Kallyan Bank

Himalayan Economics and Business Management

Open Access Research Article

Specialized Banks’ Performance Analysis and Impact of Bank Size: A study on Bangladesh Krishi Bank (BKB) & Probashi Kallyan Bank

Md. Monzur Hossain*¹ Mst. Rinu Fatema² and Md Shafiul Hossain³ 1Lecturer, Department of Finance and Banking, Comilla University, Cumilla, Bangladesh 2Assistant Professor, Department of Tourism and Hospitality Management, Noakhali Science and Technology University, Noakhali, Bangladesh 3BBA, Department of Accounting & Information Systems, University of Dhaka, Bangladesh Abstract: The inspiration steers behind this workout is to weigh up the financial *Corresponding Author performance of Specialized Banks of Bangladesh based on their financial attributes Md. Monzur Hossain especially prioritizing the financial proportions as specialized banks are playing pivotal in financial advancement of Bangladesh. Two particular banks out of three are picked for this Article History research. This paper presents the through scrutinization of financial performance for the Received: 25.12.2020 period 2015–2019 by enacting financial proportions (ratio). The proportions which have Accepted: 12.01.2021 been taken into consideration are the bank's deposit, credits, total assets, shareholders’ Published: 20.01.2021 equity, ROE, ROD, ROA, ROI, profit margin ratio and interest income. Simple linear regression is taken to test the effect of bank size on the financial execution of these Citations: aforesaid Financial Institutions. The investigation unleashed that the banks maintaining higher deposit, credits, or assets don't generally imply that has better benefit execution. The Md. Monzur Hossain Mst. Rinu Fatema and Md Shafiul Hossain (2021); examination additionally acknowledged the two hypotheses and found that the financial Specialized Banks’ Performance performance of these banks is emphatically affected by the bank size. Analysis and Impact of Bank Size: A study on Bangladesh Krishi Bank Keywords: Specialized Banks, Total Assets, Interest Income, Financial Performance, Size. (BKB) & Probashi Kallyan Bank. Hmlyan Jr Eco Bus Mgn; 2(1) 1-13.

development in future. In this case, the financial NTRODUCTION I indicators are determined from the financial statements In the case of business organizations, it is of the banks at the year-end. ROD, ROA, ROE are the considered that the banking sector is one of the main common financial indicators used by most of the sources of finance. The most common assumption in financial institutions where the banks’ assets and financial performance researches is that when financial income are considered. It is assumed here that there is a performances increase, it comes up with improved positive correlation between the size of the bank and the financial functions and activities in the organization. size of income from interest. That’s why it is concluded The subject of the research mainly goes upon the fields that the institutional size has a significant impact on of finance and management. It is argued that ‘institution organizational performance. Thus, the study is done by size’ is a principal factor that performs a vital role in the introducing the banking sector and developing the study case of improving the financial performances of the objectives. Afterwards, some relevant literature is institutions. There has been few research papers reviewed and the research hypothesis is determined published on the impact of this principal factor on thereon. Along with this, the section on the limitations financial performance where it is rarely done on the of the study is also added with relevant points. Research specialized banks in Bangladesh. methodologies are also determined later on and using those methodologies, data collection and analytical The study hypothesizes that the linkage between the discussion on the findings and results are included factor ‘bank size’ and financial performance is afterwards. Finally, the study is concluded with a brief determinable. This study has the objective of analyzing discussion of the study and its results. the financial data from 2015-2019 of different commercial banks in Bangladesh and concluding the Banking Industry in Bangladesh ultimate impact of the size of the banks on their interest After independence, banking industry of Bangladesh income. In this study, a comparison made among the started its excursion with six popular nationalized performances of the banks and they are ranked in terms banks, three specialized banks claimed by the State, and of it. nine foreign banks. With the passage of private banks, the banking sector achieved enormous growth in the That’s why the study goes intending to classify the 1980s. At present, Bangladeshi banks are basically of specialized banks in Bangladesh in terms of their two kinds: financial indicators’ indications. These can also be used in further financial analysis as a guideline for

Md. Monzur Hossain, et al., Hmlyan Jr Eco Bus Mgn; Vol-2, Iss- 1 (Jan-Feb, 2021): 14-22

A.Scheduled Banks: The banks remaining in the  The financial output is considered in inspecting the rundown of banks held under the 1972 Bangladesh relationship between the size of specialized banks Bank Order. determined by the size of total assets and the size b.Non-Scheduled Banks: However, the banks that are of interest income. set up with a clear and constructive purpose and run under any demonstration are not the Scheduled Banks. LITERATURE REVIEW All the elements of expected banks can't be played out Financial performance s of the financial institutions by those banks. including commercial banks is done through different ratio analysis, budget versus performance analysis, There are 59 scheduled banks in Bangladesh benchmarking and mix of all of these techniques. In the functioning under the full supervision and oversight of case of financial institutions in Bangladesh, they use to Bangladesh Bank which is devoted to doing so because publish various financial ratios which indicate the of the 1972 Bangladesh Bank Order and the 1991 Bank performance efficiency of the financial institutions. Company Act. Anticipated Banks present the following types: There are some limitations of the financial i. State-Owned Commercial Banks (SOCBs): indicators discussed in various accounting literature There are 6 SOCBs which become entirely or although those financial ratios like the return of assets substantially claimed by the Government of (ROA), the return of deposit (ROD), return on equity Bangladesh. (ROE), etc. rank the commercial banks in a relevant ii. Specialized banks (SDBs): 3 separate banks way. Bank performance reflects on the interest income that have been set up for specific purposes such and bank size reflects on the total assets. These two are as the agrarian or modern turn of events are studied here to identify the relation between them. currently operating. Likewise, these banks are entirely or substantially claimed by the The monetary presentation of banks and other Government of Bangladesh. monetary pillars has, for the most part, been calculated iii. Private Commercial Banks (PCBs): There is using a combination of inquiry of monetary dimensions, mainly 41 private business banking that tells benchmarking, calculating execution against considerably about people/private substances. It expenditure schedule or a mixture of these techniques is feasible to organize PCBs into two sessions: (Avkiran, 1995). The fiscal accounts of the frequently  Conventional PCBs: 33 ordinary PCBs are circulated banks in Bangladesh contain an array of currently involved in the business. In customary monetary proportions meant to be a symbol of the architecture i.e., interest-based operations, we company's show. play out the financial capabilities.  Islami Shariah-based PCBs: In Bangladesh, There are impediments relating to the use of such there are 8 Islami Shariah-based PCBs and they monetary proportions, as is understood in accounting. conduct banking exercises, such as Profit Loss Nevertheless, in this study, the ROA proportion of the Sharing (PLS) mode, as per Islami Shariah- interest pay size is used to quantify the execution of based standards. commercial banks in Bangladesh. To explore the iv. Financial Commercial Banks (FCBs): In relations between them and the monetary introduction, Bangladesh, 9 FCBs act as components of the tools of the board, the bank scale, and banks which are consolidated abroad. organizational effectiveness are used together.

Bangladesh now has five non-scheduled banks, In essence, much of the latest writing on bank which are: execution presents the purpose of monetary associations  Ansar VDP Unnayan Bank, as that of achieving acceptable returns and minimizing  Karmashangosthan Bank, the risks required to achieve this return (Hempel G.  Grameen Bank, Coleman, 1986). The relation between danger and  Jubilee Bank, return is mostly understood, i.e. the higher the risk, the  Palli Sanchay Bank higher the usual return. Therefore, traditional bank execution ratios have calculated all costs and returns. Objectives of the study The major objective of this study is to know about Thabet (1997) completed a study in Kuwait taking the operational efficiency and asset utilization on the the banking customers as a research sample. In the financial performance of the specialized banks in study, he tried to find out the selection factors that the Bangladesh. The specific objectives of the study customers or clients consider while taking a bank-based include: investment decision. The findings of the study show  Some financial metrics are used to measure the that the customers usually consider the bank size or its existence of specialized banks. asset size there in terms of choosing a bank whether to invest or not. 15

Md. Monzur Hossain, et al., Hmlyan Jr Eco Bus Mgn; Vol-2, Iss- 1 (Jan-Feb, 2021): 14-22

performance was undertaken by Harasheh, M. (2012). The increasing competition in the public and global In order to measure the financial performance of these financial market sectors, the transition to financial banks, the analysis used three indicators; Return on alliances and the latest mechanical technologies are Investment, Tobin's Q model and Economic to Value bringing about dramatic changes in the banking system add. They used a correlation and regression model to and calling for all banks to make convenient plans for a catch the implications of bank size, credit risk, new, severe monetary environment. The adequacy of operating productivity and asset management in order Greek banks based on their capital size was investigated to predict potential financial results. The study showed (Spathis, and Doumpos, 2002). They used a multi- that bank size, credit risk, operating efficiency and asset standard philosophy in their research to classify Greek management had no statistically important impact on banks according to the factors of return and operation the financial performance of those banks. and to explain the disparities between small and big banks in the profit and competitiveness of banks. A research focused on the financial performance of private commercial banks in Bangladesh (Rashed & In their study (Chien Ho, and Song Zhu, 2004), it Tamima) found that an overview of bank size, credit appeared that most historical evaluations of risk, asset management and operating efficiency would organizational execution evaluation focus only on classify financial performance. They found that bank managerial competence and operational adequacy that size correlated negatively with the ratio of ROA and can have a significant effect on an organization's P/B (price to book value). They also noted that the risk endurance. The revolutionary outcome of this analysis of declining ROA is greater with the rise in the size of is that an institution with greater expertise does not the asset of the bank. normally mean that by using an innovative two-stage knowledge envelopment investigative model in their Gaddam L. et al., (2009) showed the impact of the examination. A paper titled Competitiveness, Customer bank size on banks’ profitability through a simple Service and Financing Execution among Australian regression where it is found that profitability positively Monetary Foundations (Elizabeth Duncan, and Elliott, reacts on increasing the bank size impacting on interest 2004) showed that all monetary execution metrics such income as well. Al-Obaidan (2008) claimed in his study as interest margin, asset return, and capital adequacy are that the banks having higher sizes are more closely linked to highest volume for customer care. operationally efficient in comparison with the small size banks. Tarawneh (2006) did a study where it is found Sufian and Chong (2008) discussed on the confusion that the bank size positive influences the performance between the bank size and the asset size. The study said of the banks. that asset size is a proxy variable of bank size where the asset value indicates its size. These are the independent Mohammad M Rahman, (2015) reveals the variable to analyze the bank performance where it is influence of bank size on bank regulatory capital levels assumed that the banks having higher assets, tend to and risk-taking and also acknowledges that the perform better and earn more profit in comparison with reciprocal relationship between capital and risk, where the banks having fewer assets. the capital is greater, the risk is less, but where the capital is less, the risk is more. Chiorazzo et al., (2008) also addressed the assets as the bank size where they stated that those banks having A research focused on Financial Performance a higher size, usually have greater resources through Analysis of Scheduled Commercial Banks in which they can efficiently utilize the technologies and Bangladesh, Mohammad Mizanur Rahman (2016) manages the arisen risks at a minimum level. Thus, the studied that the profitability ratio-a financial metrics- banks can maintain the economies of scale through and the demand ratio demonstrates the potential of the impacting on the revenue. business to make a profit. In this sense, when measuring efficiency, the profitability ratio, the demand ratio, and A research to analyze the financial success in value-added metrics were used. Pakistan across the capital system was conducted by Siddiqui & Shoaib, (2011). The analysis found that the Thus, analyzing the literature discussed above, the scale of the branch played an important role in the research hypothesizes can be developed as follows- H1: estimation of the bank's profitability as calculated by The bank performance and its asset size and interest ROE. The report also used Tobin's Q model to calculate income are in a positive correlation. H2: There is no the efficiency of banks. The study concluded that relation between the bank size and bank performance or Tobin's Q is impacted by the bank's size, leverage ratio there is no impact of bank size or asset size on the bank and the bank's follow-up investments. performance and interest income.

Alkhatib, and A. A research to examine the financial performance of five Palestinian commercial banks at the three levels of internal, business and economic

Md. Monzur Hossain, et al., Hmlyan Jr Eco Bus Mgn; Vol-2, Iss- 1 (Jan-Feb, 2021): 14-22

Limitations of the study Bashir and Hassan (2004) stated that the ROE is an The main contribution of this study is to compare important ratio that indicates the firms’ profitability. specialized banks in Bangladesh based on certain key metrics including return on assets, return on equity, ROA: It means the return on assets that a bank return on the deposit, return on investment and other occupies. This is calculated through net income or net performing-determining financial banking activities profit divided by the total assets of the bank. Hassoune such as loans and deposits. The present analysis is (2002) stated that ROA is the ratio that is used to fundamentally evaluated in nature, drawing only identify the effectiveness of the bank’s performance in secondary data from sources of information. This paper terms of the level of assets it has. Bashir and Hassan aimed to look only at the main relationship between the (2004) also said in their paper that this ratio is the size of the assets and the financial results of specialized investment efficiency indicator in terms of the total banks operating in Bangladesh in order to consider a assets of the organization. feasible comparison. ROD: It means the return of deposit which are made by METHODOLOGY the customers of the banks. It is measured by dividing The data is obtained from the banks' financial the net income by the total deposit. Gaddam et al., statements of two selected specialized banks in (2009) stated that ROD is one of the important ratios of Bangladesh in order to achieve the study objectives. determining performance efficiency. It indicates the Data from 2015 to 2019 was used to measure the management efficiency in terms of utilizing the financial ratios for the purpose of obtaining the banks' depositors’ deposits properly. financial results. Data from books and associated papers and articles are also used. Profit margin: The profit margin is an extent of a company's To calculate, compare, define and classify the advantage (bargains less all costs) separated by its pay. financial performance of the specialist banks, we used a The net income extent dissects advantage to descriptive financial analysis. Two specialized banks arrangements and uncovers to you how well the are used as a sample, namely Bangladesh Krishi Bank company is dealing with its assets as a rule. It's and Probashi Kallyan Bank. continually conveyed as a rate. The general income condition just takes the formula for advantage and Analysis of variance (ANOVA) and Pearson segments it by the pay. correlation coefficient were used by the SPSS software package to evaluate the hypotheses and to investigate Interest income: the correlation between each variable at a 5 percent This is a dependent variable which depends on the confidence level respectively. independent variable bank size or its asset size. Interest income means the income of the banks from investing Interest is viewed as a predictor of financial money as loans to the clients or providing security of performance and is regarded as a dependent variable. the deposits of the depositors. Ben Naceur (2003) said Bank scale, on the other hand, is known as an in his study that interest income is the indicator of the independent variable. performance of banks’ operation.

We have considered main financial metrics such as Size of the Bank: total deposits, total assets, total credits, ROA, ROE, The size of the bank is associated with this total shareholder equity, etc. for the ranking of the examination as an autonomous variable. In most of the banks in order to understand the financial output of two composing like Sufian and Chong (2008) referred to selected specialized banks. that the entireties assets of the banks are used as a middle person for bank size. Hard and fast asset size is The effect of an independent variable on the used to get the way that greater banks are ideal spot dependent variable was evaluated and compared using over more unassuming banks in outfitting economies of correlations, simple regression and ratio analysis. scale in trades to the plain effect that they will all in all like a huger degree of advantages. Chiorazzo et al., Definition of Key Financial Ratios and Variables (2008) used the variable of the complete asset for ROE: It means the return on equity that determines the getting bank size. They referred to that greater banks profit returns against the invested amount of the have more resources to create specialized ability and shareholders. The calculation of this ratio is to divide headways for brilliant danger the executives. They also the net profit by the denominator shareholders’ equity. added that a greater size allows the bank to mishandle economies of scale and therefore to influence pay.

Md. Monzur Hossain, et al., Hmlyan Jr Eco Bus Mgn; Vol-2, Iss- 1 (Jan-Feb, 2021): 14-22

RESULTS AND ANALYSIS Comparisons of the bank’s deposits, credits, assets, owners’ equity, ROE, ROD, and ROA

Table 1: Total deposits of Two Bangladeshi Specialized Banks *in million Bank Name 2015 2016 2017 2018 2019 Growth Average Bangladesh 197428.40 210676.60 226249.60 2407047.00 256128.20 30% 659506 Krishi Bank Probashi 751.71 944.66 120.11 415.99 953.90 27% 637.27 Kallyan Bank Source: Calculated from the audit report (2015-2019) of Bangladesh Krishi Bank and Probashi Kallyan Bank.

Furthermore, table-1 indicates that growth rates of their average total deposits, Bangladesh Krishi Bank is Bangladesh Krishi Bank, Probashi Kallyan Bank are considered to be number one. 30% and 27% respectively. To rank the banks based on

Table 2: Total credits of two selected specialized Banks in Bangladesh *in million Bank Name 2015 2016 2017 2018 2019 Growth Average Bangladesh Krishi Bank 179960.17 186419.99 193672.56 200246.95 219227.16 22% 195905.40 Probashi Kallyan Bank 435.50 860.40 1126.20 1337.11 1839.60 322% 1119.76 Source: Calculated from the audit report (2015-2019) of Bangladesh Krishi Bank and Probashi Kallyan Bank.

Table 2 shows total credits, average credit and lower than that of Probashi Kallyan Bank. But the growth of the total credits from the period 2015-2019 average credit of Bangladesh Krishi Bank is higher than for Bangladesh Krishi Bank and Probashi Kallyan that of Probashi Kallyan Bank. Bank. Credit growth of Bangladesh Krishi Bank is

Table 3: Total assets of two selected specialized Banks in Bangladesh*in million Bank Name 2015 2016 2017 2018 2019 Growth Average Bangladesh 229959 234448 241255 253501 268020 17% 245437 Krishi Bank Probashi 2159 2438 2627 5380 6288 191% 3778 Kallyan Bank Source: auditor's report (2015-2019) of Bangladesh Krishi Bank and Probashi Kallyan Bank

Table 3 illustrates the Total Assets for those two has the lowest growth rate (17%) than Probashi Kallyan specialized banks for the period 2015-2019 and also Bank (191%) in Total Assets. However, ranking based shows the growth rate in Assets and the Average of on the Average Total assets has shown that Krishi Bank Total Assets. It is clear from table 3 that Krishi Bank position is so much higher than Probashi Kallyan Bank.

Table 4: Shareholder's equity of Two selected specialized Banks in Bangladesh *in million Bank Name 2015 2016 2017 2018 2019 Growth Average Bangladesh Krishi Bank 45390 52177 57771 60024 65483 44% 56169 Probashi Kallyan Bank 1157 1178 1708 4272 4468 286% 2556.6 Source: auditor's report (2015-2019) of Bangladesh Krishi Bank and Probashi Kallyan Bank

According to the table (4), Probashi Kallyan Bank position between the two specialized banks in the table shows the highest growth rate in its total shareholders’ (4) based on their average of total shareholder’s equity. equity (286%) in the year 2019 comparing with its As mentioned in table (4) Bangladesh Krishi Bank is owners’ equity in the year 2015. But it is mentioned in ranked number one considering the total amount of table (4) Bangladesh Krishi Bank has a low growth rate equity even it does not have the highest growth rate in in its equity comparing with Probashi Kallyan Banks. its equity. The return on equity (ROE) is considered to Though Probashi Kallyan Bank is ranked in the second be one of the profitability performance ratios. 18

Md. Monzur Hossain, et al., Hmlyan Jr Eco Bus Mgn; Vol-2, Iss- 1 (Jan-Feb, 2021): 14-22

Table 5: Return on Equity (ROE) ratio at the Bangladeshi Specialized Banks *in million Bank Name 2015 2016 2017 2018 2019 Average Bangladesh Krishi Bank 4.74% 13.01% 9.80% 10.43% 10.37% 9.67% Probashi Kallyan Bank 12.25% 10.95% 9.98% 6.41% 9.61% 9.84% Source: Calculated from the audit report (2015-2019) of Bangladesh Krishi Bank and Probashi Kallyan Bank.

The Return on Equity (ROE indicates the during the period 2015-2019. It identifies the bank profitability performance ratios. The lowest mean ROE management’s ability to yield net benefit from using ratio is 9.67% for Bangladesh Krishi Bank while equity. Probashi Kallyan Bank got an average ROE of 9.87%

Table 6: Return on deposit (ROD) ratio of two selected specialized Banks of Bangladesh. *in million Bank Name 2015 2016 2017 2018 2019 Average Bangladesh Krishi Bank -1.09% -3.22% -2.50% -2.60% -2.65% -2.41% Probashi Kallyan Bank 4.16% 3.41% 33.08% 19.87% 19.88% 16.08% Source: Calculated from the audit report (2015-2019) of Bangladesh Krishi Bank and Probashi Kallyan Bank.

Table 6 shows that all Return on deposit (ROD) banks. It is computed by dividing net profit by whole ratios in every year from 2015 to 2019 of Bangladesh deposits. Due to earn profits, this ratio mirrored the Krishi Bank (BKB) is opposite while the ROD ratios of bank management capability to exert the customers’ Probashi Kallyan Bank are positive. So, obliviously deposit. The table shows that the average of Bangladesh average ROD of Probashi Kallyan Bank is higher than Krishi Bank (BKB) is -2.41% and Probashi Kallyan those of Bangladesh Krishi Bank. It is shown that Bank average is 16.08% that is higher than Bangladesh overall ROD ratios fluttered through the duration of the Krishi Bank (BKB).

Table 7: Return on Assets (ROA) of selected 2 Specialized Banks of Bangladesh. Bank Name 2015 2016 2017 2018 2019 Average Bangladesh Krishi Bank -.94% -2.90% -2.35% -2.47% -2.53% -2.238% Probashi Kallyan Bank 1.69% 1.38% 1.60% 3.36% 5.03% 2.612% Source: Calculated from the audit report (2015-2019) of Bangladesh Krishi Bank and Probashi Kallyan Bank.

As shown above the table, the summery of ROA during Bangladesh. We can see that PKB’S average ratio is the period of 2015b to 2019 for the specialized bank 2.612 where BKB’S ratio is 2.238%. (Bangladesh Krishi Bank & Probashi Kallyan Bank) in

Table 8: Return on Investment (ROI) ratio at the Bangladeshi Specialized Banks *in million Bank Name 2015 2016 2017 2018 2019 Average Bangladesh Krishi Bank 8.16% 7.73% 8.11% 6.67% 6.14% 7.36% Probashi Kallyan Bank 2.11% 2.34% 3.10% 2.20% 4.74% 2.90% Source: Calculated from the audit report (2015-2019) of Bangladesh Krishi Bank and Probashi Kallyan Bank.

The Return on Investment (ROI) is not good at all. The lowest average ROI ratio is 2.90% for Probashi Kallyan Bank while Bangladesh Krishi Bank got an average ROE of 7.36% during the period 2015-2019. The ROI is net profit divided by the cost of investment. Return on Investment (ROI) is a performance measure used to appreciate the efficiency of an investment or compare the efficiency of a number of various investments.

Table 9: Profit margin ratio of two selected specialized Banks in Bangladesh Bank Name 2015 2016 2017 2018 2019 Average Bangladesh Krishi Bank -14.66% -47.07% -36.04% -46.89% -50.49% -0.3903 Probashi Kallyan Bank 14.90% 17.13% 21.79% 28.37% 39.21% 0.2428 Source: Calculated from the audit report (2015-2019) of Bangladesh Krishi Bank and Probashi Kallyan Bank.

Md. Monzur Hossain, et al., Hmlyan Jr Eco Bus Mgn; Vol-2, Iss- 1 (Jan-Feb, 2021): 14-22

The table shows a profit margin ratio from the Bank. The profit margin ratio is a performance measure duration 2015-2019 for Bangladesh Krishi Bank and that shows how well the company is controlling its Probashi Kallyan Bank. Profit margin ratio of overall finances. The ratio is computed by dividing a Bangladesh Krishi Bank is in negative figure than that company's profit, or sales minus all expenses, by its of Probashi Kallyan Bank. So, the average of Probashi revenue. Kallyan Bank is higher than that of Bangladesh Krishi

Table 10: Interest income of Two selected specializes Banks in Bangladesh *in million Bank Name 2015 2016 2017 2018 2019 Average Bangladesh Krishi Bank 14684.00 14418.08 15697.25 13347.89 12455.98 14320.65 Probashi Kallyan Bank 208.67 181.92 179.03 289.94 482.13 268.34 Source: Calculated from the audit report (2015-2019) of Bangladesh Krishi Bank and Probashi Kallyan Bank

The table shows Interest Income from the duration Income. The Probashi Kallyan Bank is ranked in the 2015-2019 for Bangladesh Krishi Bank and Probashi first position in the profitability performance i.e Return Kallyan Bank. The average of Bangladesh Krishi Bank on Asset (ROA), Return on Equity (ROE), Return on is higher than that of Probashi Kallyan Bank. The Deposit (ROD) and Profit Margin. Interest Income is the indicator of the performance of banks’ operation. Checking of hypotheses There are two hypotheses, as delineated in this In order to summarize the classification of the banks study: the primary one expressed that, based on rank of their activities and profitability ratios, H0: There's no relationship between the financial Table 11 contains ranks of the positions for these banks. output calculated by the size of interest income and the As it is shown in this Table, rank of Bangladesh Krishi size of the bank determined by total assets. Bank is good position in total deposits, total credits, total assets, Return on Investment (ROI) & Interest

It was claimed that the alternative hypothesis was, H1: There's a positive relationship between the financial output measured by the size of interest income and the size of the bank measured by total assets. Based on the analysis of the common knowledge for all study variables over the amount 2015-2019 as shown in Table (11), correlations and variance analysis were estimated to analyze the consequence of independent variables on dependent variables. Table: 11: Bangladesh Specialized Banks: main average data (2015-2019) Bank BKB PKB Variables Variant 1* 14320.65 268.3413 Interest Income Variant 2** 245437 3778 Asset Size

* The dependent V1.

**The Independent V2. Based on the analysis of the average data for the study variables over the period 2015-2019 as shown in Table 11, the correlations and variance analysis were calculable to judge the Table 12: Correlations Interest Income (V1) Total Asset(V2) Interest Income Pearson Correlation 1 .830** Sig. (2-tailed) .003 N 10 10 Total Asset Pearson Correlation .830** 1 Sig. (2-tailed) .003 N 10 10 consequence of certain variables on the measure.

**. Correlation is significant at the 0.05 level (2-tailed).

Md. Monzur Hossain, et al., Hmlyan Jr Eco Bus Mgn; Vol-2, Iss- 1 (Jan-Feb, 2021): 14-22

The outcome of the independent variable and with a correlation coefficient indicator of 83.0% are dependent variable correlation test indicated that there substantially positive correlations. The first hypothesis was a strong positive association between financial is justified based on this correlation. The strong performance and bank size. The financial output relationship between interest income and the size of the (interest income size) and the independent variable bank is also positive. Table 13: ANOVA a Model df F Sig. Results Inference 1 Regression 1 17.784 .003b Sig Diff. Accept H1 Residual 8 Total 9 To test the second hypothesis, the overview result of the study of variance (ANOVA) is shown in table 13. If F is determined, the testing rule is to consider the 2. Al-Obaidan, A. M. (2008). Optimal bank size: The second hypothesis (H2) less than Sig 0.05. There is a case of the Gulf Cooperation Council positive effect of an independent variable, calculated by countries. European Journal of Economics, the size of interest income, on financial results. It is Finance and Administrative Sciences, 11(11), 31- evident from table 13 that the F. Sig value of 0.003 is 43. less than the amount of 0.05. The second hypothesis is 3. Avkiran, N. K. (1994). Developing an instrument therefore accepted, implying that the financial to measure customer service quality in branch performance of the Bangladesh Specialized Bank is banking. International journal of bank marketing. influenced by the size of the bank. 12 (6), pp.10-18. 4. Aysan, A. F., Disli, M., Ozturk, H., & Turhan, I. M. (2015). Are Islamic banks subject to depositor ONCLUSION C discipline?. The Singapore Economic The findings of this study revealed that based on Review, 60(01), 1550007. their total deposits, total credits, total assets and total 5. Chiorazzo, V., Milani, C., & Salvini, F. (2008). shareholder equity, Bangladesh Krishi Bank is Income diversification and bank performance: perceived to be the first. The study also found that Evidence from Italian banks. Journal of financial Probashi Kallyan Bank is in a higher position than services research, 33(3), 181-203. Bangladesh Krishi Bank based on its Return on Asset 6. Edris, T. A. (1997). Services considered important (ROA), Return on Equity (ROE) and Return on Deposit to business customers and determinants of bank (ROD), but Bangladesh Krishi Bank is in a higher selection in Kuwait: a segmentation position based on Return on Investment. Based on the analysis. International Journal of Bank Marketing. Probashi Kallyan Bank profit margin ratio, it is ranked 15 (4), pp. 126-133. first, but the first is considered to be Bangladesh Krishi 7. Gaddam, L., Al Khathlan, K., & Malik, S. (2009). Bank for interest income ratio. The results of the study Commercial banks in Saudi Arabia: A study of show that a bank with higher predictors of total assets, financial performance. Journal of International loans, deposits, or shareholder equity does not Finance & Economics, 9(1), 15-24. necessarily mean that it has better performance in terms 8. Hagel, J., Brown, J. S., Samoylova, T., Lui, M., of profitability. This study also explored the effect of Damani, A., & Grames, C. (2013). Success or these predictors on the financial performance of struggle: ROA as a true measure of business Bangladesh's specialized banks. The study's regression performance. Report 3 of the 2013 Shift Index analysis showed that these banks' financial output is series. Report 3. Deloitte University Press. positively affected by the size of the bank. The outcome 9. Hempel, G. H., & Simonson, D. G. (1999). Bank of this study's correlation analysis among variables that management: text and cases. Wiley. also revealed the existence of positive relationships. 10. Lassala, C., Apetrei, A., & Sapena, J. (2017). Finally, the study allows the management of banks to Sustainability matter and financial performance of recognize operations that would improve the financial companies. Sustainability, 9(9), 1498. efficiency of their banks. The outcome of this study 11. Rahman, M. M. (2016). Financial Performance revealed that it may be important for these bank Analysis of Scheduled Commercial Banks in management to take all the steps necessary to increase Bangladesh. Universal Journal of Accounting and the bank's financial positions. Finance, 4(5), 166-184. 12. Rahman, M. M., Zheng, C., & Ashraf, B. N. REFERENCES: (2015). Bank size, risk-taking and capital 1. Alkhatib, A., & Harasheh, M. (2012). Financial regulation in Bangladesh. Eurasian Journal of performance of Palestinian commercial Business and Economics, 8(15), 95-114. banks. International Journal of Business and Social 13. Rahman, M. Z., & Mia, R. (2018). Deconstruction Science, 3(3). of ROE: An Implementation of DuPont Model on Selected Bangladeshi Commercial

Md. Monzur Hossain, et al., Hmlyan Jr Eco Bus Mgn; Vol-2, Iss- 1 (Jan-Feb, 2021): 14-22

Banks. International Journal of Economics and system: A multicriteria methodology. International Financial Research, 4(6), 165-170. Transactions in operational research, 9(5), 517- 530. 14. Rashed, A.K., & Tamima, A. (2013). An 17. Sufian, F., & Chong, R. R. (2008). "Determinants Evaluation of Financial Performance of Private of Bank Profitability in A Developing Economy: Commercial Banks in Bangladesh. Journal of Empirical Evidence from the Philippines", Asian Business Studies Quarterly, 5 (2), 65-77 Academy of Management Journal of Accounting 15. Siddiqui, M. A., & Shoaib, A. (2011). Measuring and Finance, 4 (2), pp. 91112. performance through capital structure: Evidence 18. Tarawneh, M. (2006). A comparison of financial from banking sector of Pakistan. African Journal of performance in the banking sector: Some evidence Business Management, 5(5), 1871-1879. from Omani commercial banks. International 16. Spathis, C., Kosmidou, K., & Doumpos, M. (2002). Research Journal of Finance and Economics, 3(3), Assessing profitability factors in the Greek banking 101-112.