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Special Problems

Cost and Profit Efficiency of Bangladeshi Commercial Banks: A Stochastic Frontier Approach

International Journal of Economic Behavior and Organization
Volume 5, Issue 6, December 2017, Pages: 131-142
Received: May ix, 2017; Accepted: May 25, 2017; Published: Dec. nineteen, 2017

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Author

Bellal Hossain Raju Medico., Department of Finance, University of Dhaka, Dhaka, Bangladesh

Abstract

This paper assesses the cost and profit efficiency levels of banks consist of conventional, Islamic Shariah based and state-endemic commercial banks in Bangladesh over the period of 2011 to 2015. Basic accounting ratios and stochastic cost and profit approaches originated by stochastic frontier analysis have been used in this study. From the results of bookkeeping-based ratios used in this study, conventional private commercial banks are more efficient compared to Islamic Shariah based private commercial banks and state-owned commercial banks in the both cases of cost and profit. According to the stochastic cost frontier approach, the commercial banks in Bangladesh are not institute considerable cost inefficient. The cost efficiency level of 35 commercial banks in Bangladesh is 91.4 pct. The results of this written report indicate that traditional individual commercial banks are more toll efficient compared to Islamic Shariah based and state-owned commercial banks. From the results of stochastic profit efficiency frontier, the conventional private commercial banks take the higher values of culling profit efficiency levels than the state-owned and Islamic Shariah based commercial banks. It can besides be drawn that around one-fourth of profits of banks are lost because of inefficiency over the catamenia covered by this study.

Keywords

Toll Efficiency, Turn a profit Efficiency, Accounting Ratios, Stochastic Cost Frontier Approach, Stochastic Profit Frontier Arroyo, Commercial Banks, Bangladesh

To cite this article

Bellal Hossain Raju Doctor., Cost and Turn a profit Efficiency of Bangladeshi Commercial Banks: A Stochastic Frontier Arroyo, International Journal of Economic Beliefs and Organization. Book 5, Event six, Dec 2017 , pp. 131-142. doi: 10.11648/j.ijebo.20170506.13

Copyright

Copyright © 2017 Authors retain the copyright of this article.
This commodity is an open up access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/past/4.0/) which permits unrestricted use, distribution, and reproduction in whatsoever medium, provided the original work is properly cited.

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