Abstract
Purpose: The study aims to measure the financial performance of Islami Bank Bangladesh Limited (IBBL) from three different perspectives, such as the bank management perspective, market perspective, and shareholder perspective.
Design/Methodology/Approach: A range of financial ratios/indicators are used, include activity ratios, short-term solvency ratios, asset quality ratios, and management capability ratios, to illustrate the performance of the bank in several operational areas. Subsequently, accounting return-based, market-based, and value-based performance measures are used to assess the financial performance of the bank. All data are collected from the publicly available annual reports of the bank over the period 2012-2017.
Findings: The study finds that the bank has not faced liquidity problem and it has enhanced its efficiency throughout the study period. However, it has experienced poor management capability in the collection of deposits. Overall, the study finds that the financial performance of the bank from all perspectives is satisfactory with a little variation throughout the study period.
Research Limitations: The results, however, are subject to several limitations, such as it uses short-term performance measures and fails to assess the causal relationship between financial performance and other financial factors.
Originality/Value: Unlike prior studies, the study assesses the financial performance of IBBL using market-based and value-based performance measures along with accounting return-based performance measures. The outcomes of the study are important for different stakeholders of the bank, particularly employees, depositors, and shareholders. The current bank management also requires the same outcomes, as they require improving the management capability area to achieve its vision.