Bridging the Rate Gap: Unraveling its Impact on Bank Profitability in Bangladesh

This study investigates the effect of interest rate spread (IRS) on the profitability of commercial banks in Bangladesh. The net interest margin (NIM) measures IRS; return on equity (ROE) and return on assets (ROA) are measures of profitability, net of bank size (SIZE); capital adequacy ratio (CAR); non-performing loans (NPL); and customer deposit growth (CDG). The panel data estimation method used for this study is Feasible Generalized Least Squares (FGLS), applied to panel data on conventional commercial banks for 135 bank-year observations from 2019 to 2023, with heteroskedasticity and first-order autocorrelation addressed.