International Journal of Science and Research (IJSR)

International Journal of Science and Research (IJSR)
Call for Papers | Fully Refereed | Open Access | Double Blind Peer Reviewed

ISSN: 2319-7064

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Analysis Study Research Paper | Business and Finance | Bangladesh | Volume 13 Issue 3, March 2024

Trend analysis of Capital Adequacy Ratio of State Owned Commercial Banks (SOCBs) of Bangladesh from 2018 to 2022

Md. Fokhrul Hasan

Abstract: This study is to identify the trend of capital adequacy ratio of four state - owned commercial banks i. e. Agrani Bank PLC, Janata Bank PLC, Rupali Bank PLC and Sonali Bank PLC of Bangladesh for the period of 2018 to 2022. Capital Adequacy ratio (CAR) or Capital to Risk - weighted Asset Ratio (CRAR) determines a bank?s ratio of capital to its Risk Weighted assets both of on balance sheet and off balance sheet items. The core capital of banks which is being called going concern capital is supposed to absorb the potential losses due to risk of banking activities. Internationally the capital to risk - weighted asset ratio has been specified as the value of the ratio cannot be lower than 8% of risk weighted assets of banks. In Bangladesh, central bank has been given some steps to achieve the regulatory requirement of not less than 10 percent without capital conservation buffer of 2.5 percent from 2015 to 2020. In this article some other indicators have also been analyzed from the point of view of the capital to risk weighted asset for the year from 2018 to 2022. This paper identify that all the four SOCBs had been able to keep CRAR ratio at 10 percent for the year 2018 to 2020 followed by the deteriorating rate of the coefficient for later years except Sonali Bank.

Keywords: Capital Adequacy Ratio, Tier - 1, Tier 2, NPL, BASEL III, BASEL II, Balance sheet

Edition: Volume 13 Issue 3, March 2024,

Pages: 31 - 36

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