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Paper Title
Effect of Asset and Equity Structures on Financial Distress: A Study on Private Commercial Banks in Bangladesh


Md. Amin Mia, Md. Ibrahim Khalil, Md. Abud Darda


A bank is an institution with operations directly related to the public. Banking operations are so affected by the faith of the customers or the general public. A sound banking system is highly required for a stable financial system in a country. As of now, banks are facing a critical situation in Bangladesh. This research aims to examine the impact of asset and equity structures on commercial banks' financial difficulty based on the eight-year annual data set (2014 to 2021) of selected commercial banks of Bangladesh. Partial Least Square (PLS) regression has been utilized in order to perform data analysis. Overall, the result reveals that the average Z-score of selected commercial banks is .4659, which falls in the distress zone. So, it is argued that, with the increase in external equity capital and more investment in fixed assets, commercial banks are falling into a risk of financial distress. Commercial banks face financial distress with decreasing internal equity capital and current assets.


Equity structure, Asset structure, Financial distress, Altman Z model, Partial Least Square.

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