Financial Health of Bangladesh’s State-Owned Commercial Banks: An Empirical Study on Profitability and Solvency

This study examines the financial health of Bangladesh’s state-owned commercial banks (SOCBs) with a specific focus on profitability and solvency during the period 2018–2023. Using trend analysis, ratio analysis, and comparative evaluation, the research investigates four major banks—Sonali, Janata, Agrani, and Rupali—to assess their performance before, during, and after the COVID-19 pandemic. The findings reveal that Sonali Bank demonstrated the most stable and consistent growth, marked by increasing returns on assets and equity, along with a balanced solvency position. Janata Bank showed occasional profit surges, particularly in 2021, but struggled to sustain its performance. Agrani Bank exhibited fluctuations with declining profitability in recent years, while Rupali Bank consistently underperformed with low profitability and excessive leverage, signaling significant solvency risks. Overall, the study highlights varying degrees of financial resilience among SOCBs and underscores the need for improved debt-equity management, stable profitability margins, and stronger risk mitigation strategies. These insights contribute to understanding the financial sustainability of Bangladesh’s SOCBs and provide guidance for policymakers and banking regulators in enhancing their long-term stability.