Determinants of Financial Performance of Bank Asia Ltd.

Abstract

This paper mainly concentrates on evaluating the major factors that affect the Bank Asia’s performance. In order to show the Determinants of commercial banks performance, there are two categories, namely internal and external factors that effects on commercial banks performance. Internal determinants are of statement variables and non-financial statement variables. While financial statement variables relate to the profitability, which are within the control of bank management, can be broadly classified into two categories, i.e. financial decisions which directly involve items in the balance sheet and income statement; nonfinancial statement variables involve factors that have no direct relation to the financial statements. External factors are those factors that are considered to be beyond the control of the management of a bank. This study comes to examine and analyze the factors that might affect on the performance of Bank Asia’s during the period of 2005 through 2010. The analysis revealed that there are significant and positive relationship between ROA and Bank size, TL/TA, NIM, TE/TA and negative correlation between ROA and. Annual Growth Rate for GDP, Inflation rate, earning per share and Debt to equity. Also this study found that there are significant and positive relationship between ROE and Bank size, TL/TA, NIM, TE/TA and negative correlation between ROE and. Annual Growth Rate for GDP, Inflation rate, earning per share and Debt to equity. Keywords: Bank Asia’s performance, Return on Assets, Return on equity, Annual Growth Rate for Gross domestic product, Inflation rate and internal factors.