Paper title: Impact of COVID-19 on the Profitability of Listed Commercial Banks in Bangladesh
Abstract: The COVID-19 pandemic, originating in Wuhan, China, causes widespread socio-economic disruptions, including in Bangladesh, which enters a lockdown from March 23 to May 30, 2020, halting trade and manufacturing. This study examines the extent of COVID-19’s impact on the profitability of commercial banks listed in Bangladesh. Analyzing the trimestral financial statements of twenty-nine banks from Q1 2017 to Q4 2023, the study finds a significant decrease in profitability (ROA, ROE, and NIM) during the COVID-19 period (from Quarter 2, 2020 to Quarter 4, 2022), with partial recovery in the post-COVID period. The study finds that COVID-19 is inversely related to the profitability indicators ROA, ROE and NIM. This inverse relationship is also evident between the independent variables, including size, Loan to Deposit ratio, LLP, and Leverage, and the before-mentioned dependent variables. The findings contribute to understanding the pandemic’s impact on Bangladesh’s banking sector and suggest that banks strengthening capital buffers, enhancing risk management, and investing in digital transformation will be better positioned for long-term profitability. Keywords: COVID-19, banking sector, profitability, ROA, ROE, NIM, post-COVID recovery. DOI: https://www.doi.org/10.61607/JFB.V21N1-2.A9 Article Info: Submission Date: July 23, 2024; Acceptance Date: November 05, 2024.
