Comparative Analysis of Corporate Banking Service of Commercial Banks in Bangladesh

Abstract

The purpose of this study is to accomplish Comparative Analysis of Corporate Banking Service of Commercial Banks in Bangladesh: A Case Study. In terms of the banking industry, corporate banking plays a significant role in contributing to the economy more than retail banking. This paper is basically qualitative & quantitative in nature & from this paper it has been found that almost all private commercial banks ( 5 banks ) have been increasing the total amount of loan & advances following the increasing amount of deposit in every consecutive year to satisfy the need of their corporate clients, but in comparison to the amount of loan & deposit, the total amount of interest income isn’t satisfactory. According to the ideal loan to deposit ratio a bank shouldn’t keep the loan to deposit ratio above 80% - 90 %, but most of the banks are offering higher loan against the total amount of deposit by borrowing liquid from other sources that put depositors at high risk. Besides, the higher amount of loan couldn’t generate a higher amount of net interest income where most of the banks generate only 1% to 2% interest income due to failing to make effective credit analysis, weak & lengthy juridical system and improper supervision of the management that also result in a higher non-performing loan. However, to ensure sustainable growth in the corporate banking sector & to protect the interest of depositors’ bank must take effective decisions & actions to mitigate the number of non-performing loans and the risk of loan default.