COVID-19 Pandemic, Profitability, and Adaptability: Empirical Evidence from the South Asian Economy

Journal of Commerce and Accounting Research, 12 (2) 2023, 27-37

11 Pages Posted: 1 Mar 2023

Date Written: February 24, 2023

Abstract

This paper has tried to assess the impact of the COVID-19 pandemic on profitability and how organisations can adapt to the pandemic to lessen its impact, based on a South Asian economy, Bangladesh. To determine the impact, profitability measures (both book- and market-based) of 30 listed banks are compared between pre-COVID and COVID lockdown periods. An in-depth interview is conducted to understand the effects and adaptation process. It is found that COVID-19 has a significant negative impact on profitability, evidenced by the decrease in average NIM, ROE, ROA, and share price by 151%, 67%, 71%, and 7.42%, respectively. All (100%) of the interviewees have mentioned that the pandemic hurts profitability. The underlying reasons for the decrease in profitability are – economic downturn, interest rate ceiling, less investment opportunity, liquidity crisis, high medical expenditure, and fewer savings. To adapt to the pandemic, banks are integrating market, technology, knowledge, and management system adaptability.

Keywords: COVID-19 Pandemic, Profitability, Adaptability, Banking Sector, South Asian Economy

JEL Classification: F62, G01, G21, N25

Suggested Citation

Karim, Md. Rezaul and Shetu, Samia Afrin, COVID-19 Pandemic, Profitability, and Adaptability: Empirical Evidence from the South Asian Economy (February 24, 2023). Journal of Commerce and Accounting Research, 12 (2) 2023, 27-37, Available at SSRN: https://ssrn.com/abstract=4368385

Md. Rezaul Karim (Contact Author)

University of Dhaka ( email )

Department of Accounting & Information Systems,
University of Dhaka
Dhaka, 1000
Bangladesh

Samia Afrin Shetu

University of Dhaka ( email )

Department of Tourism and Hospitality Management
University of Dhaka
Dhaka, 1000
Bangladesh

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