Data Analysis and Findings

4.0 Introduction
This paper is focused on examining the changes in the profitability of Four selected banks of
Bangladesh amid the pandemic period. Literature relevant to the topic has found out that almost
all the banks and the other firms in the economy have experienced the negative consequences of
Covid 19. It has created a hazardous situation for life and the economy. Business and office
hours were reduced and this thing disturbed the full-fledged operation of the firms. In this
chapter, this report looks into the bank profitability. To do this, several financial ratios of the two
banks will be calculated. The ratios indicate the profitability of banks. After that, the ratio of the
pandemic period will be compared to that of previous years.

This chapter is split up into two parts. In the first part, relevant data is collected and analyzed.
Once the analysis part is done, this report provides a detailed insight into the findings based on
the analysis of collected data. In the analysis portion of this chapter, the change in profitability is
presented. In the findings part, the comments on the analysis are given. So, the first part of the
chapter is data analysis and the second part of the chapter is findings. Though the relevant
articles have pointed to a negative change, in this paper the actual changes in the profitability
indicators of the four selected banks is shown.

4.1 Theoretical framework

Profitability reflects the extent to which a business generates profit or makes a financial gain. It
is a surplus amount above all the costs incurred by a business firm. It is the prime goal of all for-
profit business corporations to create profit. Without making a profit, a firm cannot attain
sustainability. But the recent economic condition is shaken by the deadly pandemic called Covid
19. This thing threatened the overall performances of different business firms within the global
economy. Profitability is an important measure of the overall performance of a bank.

All the for-profit business organizations aim at making a profit as without profit, no business can
survive in the long run. Besides, forecasting profitability is also required for projecting the future
profitability of a business. Analysis of profitability is important, especially in such crisis times.
By analyzing the profitability of a firm, it can be known that how stable that firm could be amid
the crisis. Besides, profitability analysis is relevant to budget allocation regarding a firm’s
operational expenses.

Analyzing the profitability of a bank is important as it could be an important indicator of the

future profitability of the bank. Currently, the global economy is passing through rough patches.
It affects the banking sector performance as well. Analyzing the changes in banks’ profitability
amid the crisis period might help the banks to project the future more accurately. Besides,
profitability analysis might be helpful to set future-oriented strategies to overcome the crisis. To
sum up, it can be said that keeping the right track of profitability might enable banks to keep the
right track of the overall performance. Profitability analysis can be done with the help of a few
financial ratios. These are known as profitability indicators. These ratios are Net Interest Margin
(NIM), Return on Asset (ROA) and Return on Equity (ROE). Using these financial ratios, year
by year profitability of the two selected banks can be calculated and therefore it can be seen how
the ratios have been changed in the pandemic period.

Net Interest Margin (NIM)

Net interest margin measures the differences between interest income of banks and interest
expenses of banks relative to the banks’ interest-earning assets. This ratio can be compared to the
gross margin ratio of non-financial business corporations. Interest is the major source of income
for banks and other financial institutions. Net profit margin indicates the percentage of net
interest income relative to interest-earning assets. So, it is a good indicator of profitability.

Return on Asset (ROA)

Return on assets as the name implies measures the percentage of profit generated by the assets of
a company. It is a very important measure of profitability. Return on assets indicates the
profitability of a company relative to its total assets. It is important from the perspective of a
bank too. It is useful to the managers, investors and analysts as well. It also indicates the
efficiency of a company’s management in generating profit from its assets. The ratio also
indicates the effectiveness of a company’s management in using its assets. Business
organizations tend to seek efficiency. Banks are no exception in this case. In this crisis period, it
is useful to see how effective a bank’s management is in utilizing the bank’s assets to generate
profit. Because profitability is the prime motive of every for-profit organization. A higher value
of the return on asset indicates greater efficiency of a bank to generate profit utilizing assets and
a lower value of the return on asset indicates the poor capacity of a bank to generate profit
utilizing assets.

Return on equity (ROE)

Return on equity as the name implies measures the net profit of a business concern relative to its
total shareholders’ equity. Like the previous one, it is also an important measure of profitability
analysis. At the same time, this ratio is popular and one of the most widely used ratios of
profitability indicators. The ratio can be calculated for any company given that the company has
a positive after-tax net income and a positive shareholders’ equity. This ratio has many uses. It is
important for the investors. By looking at the historical data regarding return on equity, the
investors can estimate the future return on equity. Using the projection, investors can decide
whether to or not to invest in a firm. Besides, analyzing this ratio can be helpful for companies as
well. ROE analysis in crisis time can guide business corporations. Banks can benefit from this as
well. Now is a time of crisis due to the recent pandemic Covid 19. Banks are exposed to shock
as the global economy is passing through tough times. In this time of crisis, banks can use this
tool to analyze their profitability.

4.2 Data Analysis

In this section, required data will be presented and analyzed. As the report aims at examining the
changes in profitability of the selected banks amid the Covid 19 period, this section will collect
bank-specific data that is required to calculate and analyze the ratios. Three ratios will be
calculated for the period from 2016 to 2020. The ratios are Net Interest Margin (NIM), Return on
Asset (ROA) and Return on Equity (ROE). The relevant data and analysis are presented below.

4.2.1 Changes in the profitability of Sonali Bank Limited

Sonali Bank Limited is the largest state-owned commercial bank in the country. In this section of
the chapter, the profitability ratios of this bank will be calculated and will be compared to the
pre-pandemic data to find out the changes.

Net Interest Margin (NIM)

Relevant data has been collected from the annual report of Sonali Bank Limited. Data is
collected from the year 2016 to 2020. The year from 2016 to 2019 is considered a pre-pandemic
period. The year 2020 is expected to have experienced the shock of the pandemic. Relevant data
and ratios are presented below in the table.

Year Net Interest Income Total Earning Formula Calculated

BDT Asset BDT Ratio
2016 -16333409647 377392473205 Net interest income/ -0.043
Total earning asset
2017 -15140616967 413854566578 Net interest income/ -0.036
Total earning asset
2018 -6209544712 451925719263 Net interest income/ -0.013
Total earning asset
2019 -4059894340 540146606603 Net interest income/ -0.008
Total earning asset
2020 -10202426226 574511908573 Net interest income/ -0.018
Total earning asset

Table 1: NIM of Sonali Bank Limited

Table 1 holds the net interest margin of Sonali Bank limited from 2016 to 2020. For better
analysis and better understanding, the results of the table are presented in a graph. The graph is
given below.
 NIM
0
2016 2017 2018 2019 2020
-0.005 -0.008
-0.01 -0.013
-0.015 -0.018
-0.02

-0.025

-0.03

-0.035 -0.036

-0.04 -0.043
-0.045

-0.05

NIM

Figure 1: NIM Sonali Bank Limited

Net interest margin indicates the earning generated from interest earnings assets of a bank. It is
an important measure of profitability. The higher value of this ratio indicates the higher
efficiency of interest-earning assets to earn interest over the period. The data presented above
shows that Sonali Bank Limited hasn’t managed to have a positive net interest margin. This is
not a good indicator. Besides, the situation seemed to improve in recent years but the pandemic
worsened the condition.

Return on Asset (ROA)

Relevant data has been collected from the annual report of Sonali Bank Limited. Data is
collected from the year 2016 to 2020. The year from 2016 to 2019 is considered a pre-pandemic
period. The year 2020 is expected to have experienced the shock of the pandemic. Relevant data
and ratios are presented below in the table.

Year After-tax net Total asset Formula Calculated

profit BDT ratio
BDT
2016 1493265927 1201563310343 After tax net profit/ 0.001
 Total asset
2017 7161158032 1241185937350 After tax net profit/ 0.006
Total asset
2018 2321338777 1306842319895 After tax net profit/ 0.002
Total asset
2019 2744011931 1473483948655 After tax net profit/ 0.002
Total asset
2020 3320834677 1592408870500 After tax net profit/ 0.002
Total asset

Table 2: ROA of Sonali Bank Limited

Table 2 represents the five-year return on assets of Sonali Bank Limited. The time frame for the
ratio is from 2016 to 2020. For a better understanding and a clear analysis, the collected data is
presented in a graph. The graph is given below.

ROA
0.007

0.006 0.006

0.005

0.004

0.003

0.002 0.002 0.002 0.002

0.001 0.001

0
2016 2017 2018 2019 2020

ROA

Figure 2: ROA of Sonali Bank Limited

Return on asset is an important measure of profitability and this ratio is used widely. This ratio
comments on the efficiency of a bank’s management to utilize its assets. The bank has shown
greater efficiency in utilizing its assets to make a profit in 2017. It was the highest in that year.
After that, the ROA was almost the same every year up to 2020. It seems that the pandemic
couldn’t hit the profitability ratios of this bank to that extent though the overall value of ROA is
not that satisfactory.

Return on Equity (ROE)

To calculate return on equity, required data such as after-tax net income and total shareholders’
equity have been collected. The data is collected for the period from 2016 to 2020. To compare
the ROE during the pandemic and ROE before the pandemic the data of 2016 to 2019 will be
compared to that of 2020. Collected data and calculated ratio are summarized in the below table.

Year After-tax net Total Formula Calculated

profit BDT shareholders’ ratio
equity BDT
2016 1493265927 67119211636 After tax net profit/ 0.022
Total shareholders’
equity
2017 7161158032 65902263058 After tax net profit/ 0.109
Total shareholders’
equity
2018 2321338777 70136871180 After tax net profit/ 0.033
Total shareholders’
equity
2019 2744011931 68098544745 After tax net profit/ 0.040
Total shareholders’
equity
2020 3320834677 85607942774 After tax net profit/ 0.038
Total shareholders’
equity

Table 3: ROE of Sonali Bank Limited

Table 3 displays the return on equity of Sonali Bank Limited for five years. The selected
timeframe is from the year 2016 to the year 2020. For better convenience in the analysis process,
the collected data and calculated ratios are plotted on a graph. The graph is given below.

ROE
0.12

0.108
0.1

0.08

0.06

0.04 0.04 0.038

0.033

0.02 0.022

0
2016 2017 2018 2019 2020

ROE

Figure 3: ROE of Sonali Bank Limited

Among the profitability indicators, ROE is an important measure. It measures the percentage of
after-tax net profit relative to the total equity of the shareholders. From the analysis, it is seen
that Sonali Bank Limited has the highest return on equity in 2017 as it made a huge profit in that
year. But after that year the ROE began to increase but in 2020 the return on equity again
declined. The reason is pretty simple. Covid 19 disrupted the normal flow and full-fledged
operation of the bank. This thing also impacted the overall performance.
4.2.2 Changes in the profitability of Janata Bank Limited
Janata Bank Limited is one of the four state-owned commercial banks of Bangladesh. In this
subsection of the chapter, the report provides a comparative analysis of the profitability ratios of
the bank between pre-pandemic data and during pandemic data. The data is presented in the
following tables and figures. Data from 2016 to 2019 is considered the pre-pandemic period and
data for 2020 represent the pandemic period.

Net Interest Margin (NIM)

To calculate the net interest margin of Janata Bank Limited, net interest income and total earning
asset of the bank are required. Data has been collected from the financial statement of the bank.
Data is collected from the year 2016 to 2020. The year from 2016 to 2019 is considered a pre-
pandemic period. The year 2020 is expected to have experienced the shock of the pandemic.
Relevant data and ratios are presented below in the table.

Year Net Interest Income Total Earning Formula Calculated

BDT Asset BDT Ratio
2016 566599695 384016895494 Net interest income/ 0.001
Total earning asset
2017 4051939234 441506164972 Net interest income/ 0.009
Total earning asset
2018 7565177122 519483101537 Net interest income/ 0.015
Total earning asset
2019 4569979679 533439415149 Net interest income/ 0.009
Total earning asset
2020 1664038580 590322099756 Net interest income/ 0.002
Total earning asset

Table 4: NIM of Janata Bank Limited

Table 4 represents the data and ratio of net interest margin for Janata Bank Limited. For a better
understanding and clear analysis, the calculated ratio is presented in a graph. The graph is
presented below.
 NIM
0.016
0.015

0.014

0.012

0.01
0.009 0.009

0.008

0.006

0.004
0.002
0.002
0.001

0
2016 2017 2018 2019 2020

NIM

Figure 4: NIM of Janata Bank Limited

Figure 4 represents the changes in the net interest margin of Janata Bank limited from 2016 to
2020. Net interest margin is an important measure of profitability indicators. The bank had the
highest net interest margin in 2018. But it almost hit the ground in 2020.

Return on Asset (ROA)

To calculate return on assets, after-tax net income and total assets of Janata Bank Limited are
required. Data is collected from the financial statements of the bank. Data is collected from the
year 2016 to 2020. The collected data and the calculated ratios for the selected years is presented
below in a table.

Year After-tax net Total asset Formula Calculated

profit BDT ratio
BDT
2016 2605476014 778603909230 After tax net profit/ 0.0033
Total asset
2017 2686499082 805988407557 After tax net profit/ 0.0033
 Total asset
2018 180746782 867395057489 After tax net profit/ 0.0002
Total asset
2019 181703507 896782285015 After tax net profit/ 0.0002
Total asset
2020 186152441 1044553361240 After tax net profit/ 0.0001
Total asset

Table 5: ROA of Janata Bank Limited

Table 5 represents the return on assets for the five years of Janata Bank Limited. It also shows
the collected data required for calculating the ratio. For a better understanding and convenient
analysis, the calculated ratio is presented graphically. The graph is given below.

ROA
0.0035 0.0033 0.0033

0.003

0.0025

0.002

0.0015

0.001

0.0005
0.0002 0.0002
0.0001
0
2016 2017 2018 2019 2020

ROA

Figure 5: ROA of Janata Bank Limited

Figure 5 graphically represents the return on assets of Janata Bank Limited. ROA of the bank
maintained a declining trend since 2018 and it became the lowest in 2020.
Return on Equity (ROE)

Return on equity is an important indicator of profitability. It is widely used and popular. To

calculate the ratio, after-tax net income and total shareholders’ equity is required. This required
data is collected from the financial statements of Janata Bank Limited. The collected data and
calculated ratio are presented in the below table.

Year After-tax net Total Formula Calculated

profit shareholders’ ratio
BDT equity BDT
2016 2605476014 49889660263 After tax net profit/ Total 0.0522
shareholders’ equity
2017 2686499082 51363334031 After tax net profit/ Total 0.0523
shareholders’ equity
2018 180746782 54526958879 After tax net profit/ Total 0.0033
shareholders’ equity
2019 181703507 50219164503 After tax net profit/ Total 0.0036
shareholders’ equity
2020 186152441 51545638637 After tax net profit/ Total 0.0036
shareholders’ equity

Table 6: ROE of Janata bank Limited

Table 6 displays the return on equity of five years of Janata Bank Limited to present this thing in
a better way, graphical representation can help. The calculated ratio is presented below to better
understand the changes from year to year.
 ROE
0.06
0.0522 0.0523
0.05

0.04

0.03

0.02

0.01
0.0033 0.0036 0.0036

0
2016 2017 2018 2019 2020

ROE

Figure 6: ROE of Janata Bank Limited

Figure 6 graphically represents the ROE of the year from 2016 to 2020. Just like the return on
assets of Janata Bank Limited the returning equity of the bank followed a declining trend since
2018. Though in 2019 and 2020 the ratio increased a bit compared to that of 2018, it is very
insignificant. These values of ratio point at a greater level of inefficiency of the bank’s
management in generating profit against shareholders’ equity. Besides, the beginning of a slight
increase was impaired in 2020 as the pandemic hit the overall economy very hard.
4.2.3 Changes in the profitability of United Commercial Bank Limited
United Commercial Bank Limited is one of the leading private commercial banks of Bangladesh.
In this subsection of this chapter, the report provides a comparative analysis of the profitability
of this bank. Comparison is made between the pre-pandemic period and during the pandemic
period. To do this analysis, data is collected from the year 2016 to the year 2020. Data ranging
from the year 2016 to 2019 is considered pre-pandemic data and data of the year 2020 is
considered the data of the pandemic period.

Net Interest Margin (NIM)

Net interest margin indicates the earning capacity of interest-earning assets. It is an important
measure of profitability. To calculate the value of net interest margin, net interest income and
total earning assets are required. This data is extracted from the financial statement of United
Commercial Bank Limited. To analyze and compare data, five years’ data has been collected.
The collected data and ratio calculation are given in the following table.

Year Net Interest Income Total Earning Formula Calculated

BDT Asset BDT Ratio
2016 8677862846 213729131102 Net interest income/ 0.041
Total earning asset
2017 9099240627 246380809499 Net interest income/ 0.037
Total earning asset
2018 9476633909 277089605625 Net interest income/ 0.034
Total earning asset
2019 11067762403 306814012807 Net interest income/ 0.036
Total earning asset
2020 9798914049 340985337566 Net interest income/ 0.029
Total earning asset

Table 7: NIM of United Commercial Bank Limited

Table 7 shows the net interest margin for five years of United Commercial Bank Limited. For a
better understanding, the results are presented in a graph.
 NIM
0.045
0.041
0.04
0.037 0.036
0.035 0.034

0.03 0.029

0.025

0.02

0.015

0.01

0.005

0
2016 2017 2018 2019 2020

NIM

Figure 7: NIM of United Commercial Bank Limited

Figure 7 shows the net interest margin of United Commercial bank Limited. The ratio is an
important profitability indicator. The graph shows that among the five years, the bank had the
highest net interest margin in 2016. After that, the NIM kept decreasing but in 2019 it again
increased. But in 2020, the bank experienced the lowest NIM in five years.

Return on Asset (ROA)

For calculating return on assets, after-tax net income and total assets of United Commercial Bank
Limited are required. Data is collected from the financial statements of the bank. Data is
collected from the year 2016 to 2020. The collected data and the calculated ratios for the selected
years is presented below in a table.

Year After-tax net Total asset Formula Calculated

profit BDT ratio
BDT
2016 2627958939 329443687909 After tax net profit/ 0.007
Total asset
2017 2722250831 365208516652 After tax net profit/ 0.007
 Total asset
2018 2502313738 404634467272 After tax net profit/ 0.006
Total asset
2019 2857798868 449513764514 After tax net profit/ 0.006
Total asset
2020 2948849869 498578729391 After tax net profit/ 0.005
Total asset

Table 8: ROA of United Commercial Bank Limited

Figure 8 shows the data collected for the net interest margin of United Commercial Bank
Limited and the table also shows the calculation of the ratio. Now, the results are presented in a
graph.

ROA
0.008
0.007 0.007
0.007
0.006 0.006
0.006
0.005
0.005

0.004

0.003

0.002

0.001

0
2016 2017 2018 2019 2020

ROA

Figure 8: Return on Asset of United Commercial Bank Limited

Figure 8 shows the return on assets of the United Commercial Bank Limited for five years. In the
earlier years, the ratio was higher comparatively and then it began to have a declining trend. The
ratio became the lowest in 2020.

Return on Equity (ROE)

Return on equity (ROE) is one of the most important profitability indicators and it is used
widely. For calculating the ratio, data has been collected from the year 2016 to the year 2020 of
United Commercial Bank Limited. The collected data and calculated ratio are presented in the
below table.

Year After-tax net Total Formula Calculated

profit shareholders’ ratio
BDT equity
BDT
2016 2627958939 25829486192 After tax net profit/ Total 0.101
shareholders’ equity
2017 2722250831 26871765362 After tax net profit/ Total 0.101
shareholders’ equity
2018 2502313738 30395125718 After tax net profit/ Total 0.082
shareholders’ equity
2019 2857798868 33363651769 After tax net profit/ Total 0.085
shareholders’ equity
2020 2948849869 35738514569 After tax net profit/ Total 0.082
shareholders’ equity

Table 9: ROE of United Commercial Bank Limited

Table 9 represents the required data for calculating the return on equity of United Commercial
Bank Limited. Calculated ratios are also given in the table. To draw a clearer picture of the
calculated ratios, a graph can help. A graphical representation of the ratios is presented below.
 ROE
0.12

0.101 0.101
0.1
0.085
0.082 0.082
0.08

0.06

0.04

0.02

0
2016 2017 2018 2019 2020

ROE

Figure 9: ROE of United Commercial Bank Limited

Figure 9 displays the return on equity of the United commercial bank for five years. Return on
equity is an important indicator of profitability. In 2016 and 2017, the bank had the highest
return on assets among five years. After that, the ratio declined. In 2018, the ratio increased
slightly but it dropped again n 2020. This ratio is used widely. Investors use this ratio to look into
the efficiency of a bank to generate income against shareholders equity. So, a higher value is
preferred over a lower one.
4.2.4 Changes in the profitability of Bank Asia
Bank Asia Limited is a third-generation private sector commercial bank of Bangladesh. It is one
of the leading commercial banks in the country. In this subsection of this chapter, the report aims
at looking into the changes in the profitability ratios of the bank. To do this thing, data is
collected from the year 2016 to the year 2020. Data of the year from 2016 to 2019 is considered
the data of the pre-pandemic period. And data of 2020 is considered during the pandemic.

Net Interest Margin (NIM)

Net interest margin examines the capability of earning assets to generate interest income. To
calculate this ratio, net interest income and total interest-earning assets are required. The data is
extracted from the balance sheet of Bank Asia Limited. Collected data and calculated ratios are
given in the following table.

Year Net Interest Income Total Earning Formula Calculated

BDT Asset BDT Ratio
2016 4187652594 157946507822 Net interest income/ 0.026
Total earning asset
2017 5683745995 184322321558 Net interest income/ 0.030
Total earning asset
2018 7998930236 196655897163 Net interest income/ 0.040
Total earning asset
2019 8509480966 210835675997 Net interest income/ 0.040
Total earning asset
2020 3190857150 231157148714 Net interest income/ 0.013
Total earning asset

Table 10: NIM of Bank Asia Limited

Table 10 displays the collected data required to calculate the net interest margin of Bank Asia
Limited. Besides, the table also displays the calculated ratio. Now, for a better understanding, the
calculated ratios are presented graphically.
 NIM
0.045
0.04 0.04
0.04

0.035
0.03
0.03
0.026
0.025

0.02

0.015 0.013

0.01

0.005

0
2016 2017 2018 2019 2020

NIM

Figure 10: NIM of Bank Asia Limited

Figure 10 shows the net interest margin of Bank Asia Limited. The graph shows that the bank
had the highest NIM in 2018 and 2019. But it became the lowest in 2020. In this year the
economy of the country slowed down to an extent as a result of the pandemic.

Return on Asset (ROA)

Return on asset is a ratio that examines the management efficiency to create after-tax net profit
using the assets of a business. It is an important indicator of profitability. To calculate the ratio,
after-tax net profit and total assets are required. This data is collected and presented in the below
table.

Year After-tax net Total asset Formula Calculated

profit BDT ratio
BDT
2016 1644066246 254866120198 After tax net profit/ 0.006
Total asset
2017 2112089343 290946272783 After tax net profit/ 0.007
 Total asset
2018 2233390509 309227870658 After tax net profit/ 0.007
Total asset
2019 1957811647 355720227278 After tax net profit/ 0.005
Total asset
2020 2024487409 410809370911 After tax net profit/ 0.004
Total asset

Table 11: ROA of Bank Asia Limited

Table 11 shows the collected data from the financial statements of Bank Asia Limited. The table
also shows the calculated ratio. The ratios now will be presented using a graph.

ROA
0.008
0.007 0.007
0.007
0.006
0.006
0.005
0.005
0.004
0.004

0.003

0.002

0.001

0
2016 2017 2018 2019 2020

ROA

Figure 11: ROA of Bank Asia Limited

Figure 11 shows the return on assets of Bank Asia Limited from the year 2016 to the year 2020.
The graph shows both an up and downtrend in the ratio. The bank had the highest ratio for two
years: 2017 and 2018. But the bank had the lowest return on the asset in 2020 as the economy
has experienced a downturn in that year.
Return on Equity (ROE)
Return on equity is an important profitability ratio and therefore widely used. It has greater value
to the investors as well. To calculate this ratio, after-tax net profit and total stockholders’ equity
are required. Required data is extracted from the financial statements of Bank Asia Limited.

Year After-tax net Total shareholders’ Formula Calculated

profit equity ratio
BDT BDT
2016 1644066246 18863438836 After tax net profit/ 0.087
Total shareholders’
equity
2017 2112089343 20933679331 After tax net profit/ 0.100
Total shareholders’
equity
2018 2233390509 23189838689 After tax net profit/ 0.096
Total shareholders’
equity
2019 1957811647 24586578448 After tax net profit/ 0.080
Total shareholders’
equity
2020 2024487409 27208398627 After tax net profit/ 0.074
Total shareholders’
equity

Table 12: ROE of Bank Asia Limited

Table 12 shows the return on equity of Bank Asia Limited. The calculated ratios will be placed
on a graph for better understanding. The graph is given below.
 ROE
0.12

0.1
0.1 0.096
0.087
0.08
0.08 0.074

0.06

0.04

0.02

0
2016 2017 2018 2019 2020

ROE

Figure 12: ROE of Bank Asia Limited

Figure 12 shows the return on equity of Bank Asia Limited for five years. The bank had the
highest return on equity in 2017. After that year the ratio started to decline. In 2020 the ratio was
its lowest among the five years. The reason is so obvious. The global economy was hit hard by
the pandemic situation in that year.

4.3 Major Findings

This paper aimed to examine the changes in profitability of four selected banks during the
pandemic. The analysis portion of this chapter has much shown the changes. In this section, the
major findings are summed up. Almost all the indicators of profitability have been decreased or
remain unchanged in 2020.

To talk about the changes in the profitability of Sonali Bank Limited, it can be said that the net
interest margin of this bank has always been negative. This is not a good picture. But compared
to the past two years that are 2018 and 2019, the net interest margin of this bank has been lower
in 2020 which is -1.8%. Return on assets remains unchanged in 2018, 2019 and 2020. On the
other hand, return on equity was reduced in 2020 compared to 2019. So, it can be concluded that
the profitability ratio was declined in 2020.
The profitability of Janata Bank Limited has also been changed amid the pandemic period.
Unlike Sonali Bank Limited, Janata Bank Limited has managed to maintain a positive net
interest margin but the ratio has been very low in 2020. The other two profitability indicator
named return on asset and return on equity has also reduced significantly in 2020 compared to
the past four years.

United Commercial Bank Limited has also experienced the negative consequences of the
pandemic in terms of profitability. The net interest margin of the bank has been at its lowest in
2020 among the five years. Return on assets of the bank has also declined in this year compared
to past years. The same thing holds good for return on equity.

Bank Asia Limited has also suffered from the pandemic. The net interest margin of this bank has
declined severely in 2020. It shows the magnitude of the shock that the bank has experienced.
Besides, the return on assets of the bank for the year was lower compared to the previous four
years. At the same time, the return on equity of the bank has also declined significantly.

To sum up, this can be said that irrespective of the type of ownership of banks, all the banks have
suffered more or less during the pandemic. State-owned banks have experienced a downfall in
profitability before the pandemic too but the private commercial banks have experienced such
shock for the first time amid the pandemic. It is hoped that banks would overcome the downfall
in the years to come.

4.4 Conclusions
So far in this chapter, collected data has been presented and required ratios to examine the
profitability have been calculated. Besides, this chapter also shows that all the four selected
banks have experienced the negative impact of the pandemic in their profitability indicators. In
the next chapter, some recommendations are provided based on the situation and thus the paper
will be concluded.