A Tale of Three Periods: Exploring the Transformative Influence of the Covid-19 Pandemic on the Banking Sector in Bangladesh

Shoun Sarker¹

Section:Research Paper, Product Type: Journal-Paper
Vol.9 , Issue.6 , pp.1-12, Jun-2023

Online published on Jun 30, 2023

Copyright © Shoun Sarker . This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
 

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Abstract :
This paper tries to explore the impact of Covid-19 on the profitability of the banking sector on the economy of Bangladesh. To explore the impact this paper using several econometric techniques like Panel Least Squares (PLS) model, Descriptive statistics correlation analysis, VAR model, and impulse response function using annual data for the timeframe of 2015-2021. By using PLS model, this study explores positive relationship among EPS and ROE, NIM and stock price of some blue-chip banks of the banking sector. On the contrary, this study explores inverse relationship among EPS and ROA, P/E and CI. VAR estimation table depicts, EPS is significant to predict EPS, ROA, ROE, NIM, P/E in long run at one period lag. Impulse Response Function indicates that an innovation to any of the independent variable would have an impact on the EPS of the banking sector. In addition, this is the first triumph to analyze the pre, during and post impact of Covid-19 on the profitability of the banking sector on the economy of Bangladesh which will help the policy makers of the banking sector of Bangladesh to use this research in crisis moment.

Key-Words / Index Term :
Covid-19, Profitability of the banking sector, Panel Least Squares, VAR model, Impulse Response Function, Correlation analysis.

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