Capital Adequacy and Affiliation to the Performance of Banks in Bangladesh.

Purpose- The purpose of this study is to explore the affiliation between banks' performance and the capital adequacy in Bangladesh. Design/methodology/approach- A total of 20 conventional banks were selected as a sample period of 2010-2020. Two stages of analysis were conducted for this study. First Pearson product moment correlation used to assess the association between variables. Last but not least, regression analysis (fixed effect model) is used to examine how the capital adequacy ratio, the credit deposit ratio, and the cost income ratio significantly influence the performance of banks, including return on assets (model 1) and return on equity (model-2). Findings- The researcher concluded by studying regression model 1, capital adequacy ratio and cost income ratio had a substantial impact on return on assets; however, credit deposit ratio had no significant impact. Return on equity had a significant impact on capital adequacy, credit deposit, and cost income ratio in model 2. The study concluded that capital adequacy and return on assets, as well as capital adequacy and return on equity had a significant association. Thus, capital adequacy and banks performance are significantly correlated. Originality/value- The significance of the association between capital adequacy and Bangladeshi banks performance in provides novelty to the study. Previous studies were inconsistent in numerous ways. The researcher attempts to examine the data using a sufficient sample size and a novel statistical method. Corona epidemic is currently significantly affecting banks' overall performance, which is an intriguing issue for research.