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Comparative Analysis of Commercial Banks of Bhutan Based on Efficiency and Profitability

Abstract

Bhutan is a small country and its financial sector is still growing financial soundness of the banking sector has a huge impact on the economy of a country and for investors, financial soundness of bank has an impact not only on owners but also on other stakeholders like investors, creditors, shareholders and the economy as well. A number of authors and researchers have done work on profitability, performances of banks and the main motivation to conduct this research is to predict the bankruptcy of financial institution that is private and public-sector banks. In Bhutan, there are four commercial banks and this study tried to explore the financial soundness of banks by using Altman’s model. This examination investigated the significance and outcomes of the financial soundness of commercial banks and distinguishing the key inner and external elements influencing the profitability of banks. BOBL for a considerable period of time from 2011 to 2015, Z score test shown in the middle of bankruptcy and hazy area. BNBL Z score esteem demonstrated bank is in a solid position and while DPNB isn't in a great position. Private Tashi banks Z score shown secured zone It means the indicators used in the Altman model for Tashi reflecting better performance than other banks.

Alka Rathore

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