Determining the Internal Factors of Bank Profitability: Empirical Insights from an Emerging Economy

Objective - The primary aim of this research is to examine the bank-specific variables that impact the profitability of banks in Bangladesh. Methodology/Technique – The present study demonstrates the ways in which bank-specific variables have affected the profitability of Bangladeshi banks. Only state-owned commercial banks (SCBs) were considered for this purpose. The study selected six operational SCBs as the sample size, using panel data from 2015 to 2024 to conduct a random effects regression model. Findings – The research examined internal characteristics like size, liquidity risk, operational efficiency, credit risk, financial risk, and capital sufficiency. According to the empirical inquiry, operating efficiency, financial risk, and liquidity risk are the most important bank-specific features that bank managers may use to formulate future strategies. Novelty – Numerous previous investigations have offered diverse insights for the variables affecting bank profitability, including both external and internal factors. This research examined the bank-specific variables that contribute to the profitability of the Bangladeshi banking system, a rising country in South Asia. Furthermore, in this paper, the factors affecting only the SCBs' profitability are clarified, which provides some useful empirical insights in this field. Type of Paper - Empirical Keywords: State-Owned Commercial Banks, Profitability, Panel Regression, Internal Factors, Bangladesh JEL Classification: C23, G21 URI: http://gatrenterprise.com/GATRJournals/JFBR/vol10.1_2.html DOI: https://doi.org/10.35609/jfbr.2025.10.1(2)