5.

2LinierRegression Definition:
A regression is a statistical analysis assessing the association between two variables. It is used
to find the relationship between two variables.
The Formula is

DV ( NPM )= 0 + 1 ( ITDR ) + 2 (TBIIR ) + 3 ( TBIR )+ 4 ( PB ) + 5 SLC + 6 (SULC)+ 7 ( LA ) + 8 ( OD ) +

Where,
Dependent Variable=net profit margin (NPM)
Independent Variable= Investment to Total Deposit Ratio (ITDR), Treasury Bills to
Investment Ratio (TBIIR), Treasury Bond to Investment Ratio (TBIR), Prize Bond to
Investment Ratio (PB), Share in Unlisted Company to Investment Ratio (SULC), Loan and
Advances to Total Deposit Ratio (LA), Overdraft to Loan and Advances Ratio (OD),
Agricultural Loan to Loan and Advances Ratio (Agro), Small Medium Enterprise to Loan
And Advances Ratio (SME), Unclassified Loan to Loan And Advances Ratio (UCL),
Classified Loan to Loan and Advances Ratio (CL)

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Adj R-squared = 0.328

PR

Coef.

Interce
pt
Investm
ent
TBIIR
TBIR
PB
SLC
SULC
LA
OD
Agro
SME
UCL
CL

Std.Err.

P>|t|

0.358

0.112

3.192

0.003

0.052
-0.106
-0.270
216.26
4
0.521
1.407
-0.129
0.098
-0.889
0.000
0.045
0.013

0.351
0.090
0.089

0.148
-1.178
-3.010

0.883
0.246
0.005

196.83
4
0.264
0.918
0.094
0.375
0.592
0.289
0.065
0.094

-1.099
1.970
1.531
-1.369
0.260
-1.500
0.001
0.689
0.139

0.279
0.056
0.134
0.179
0.796
0.142
0.999
0.495
0.890

In this analysis I find out that the adjusted R-squared is 27%. This means that the
independents variables are describe the 27% of the dependent variable and the other
73% data cover by the other independents variables.

From the table researcher can see that the Net Profit Margin and the Investment to
Total Deposit Ratio has a positive relationship. It means that if the Investment to Total
Deposit Ratio is increased then the net profit margin will also increase. The
significant level which is 88%. So it means that it is cross the bench level of 5%
significant level and the result is insignificant.

From the table researcher can see that the Net Profit Margin and the Treasury Bills to
Investment Ratio has a negative relationship. It means that if the Treasury Bills to
Investment Ratio is increased then the net profit margin will decrease. The significant
level which is 24%. So it means that it is cross the bench level of 5% significant level
and the result is insignificant.

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From the table researcher can see that the Net Profit Margin and the Treasury Bond to
Investment Ratio has a negative relationship. It means that if the Treasury Bond to
Investment Ratio is increased then the net profit margin will decrease. The significant
level which is 0.5%. So it means that it is not cross the bench level of 5% significant
level and the result is insignificant.

From the table researcher can see that the Net Profit Margin and the Prize Bond to
Investment Ratio has a negative relationship. It means that if the Investment to Prize
Bond to Investment Ratio is increased then the net profit margin will decrease. The
significant level which is 28%. So it means that it is cross the bench level of 5%
significant level and the result is insignificant.

From the table researcher can see that the Net Profit Margin and the Share in Listed
Company to Investment Ratio has a positive relationship. It means that if the Share in
Listed Company to Investment Ratio is increased then the net profit margin will also
increase. The significant level which is 6%. So it means that it is cross the bench level
of 5% significant level and the result is insignificant.

From the table researcher can see that the Net Profit Margin and the Share in Unlisted
Company to Investment Ratio has a positive relationship. It means that if the Share in
Unlisted Company to Investment Ratio is increased then the net profit margin will
also increase. The significant level which is 13%. So it means that it is cross the
bench level of 5% significant level and the result is insignificant.

From the table researcher can see that the Net Profit Margin and the Loan and
Advances to Total Deposit Ratio has a negative relationship. It means that if the Loan
and Advances to Total Deposit Ratio is increased then the net profit margin will
decrease. The significant level which is 18%. So it means that it is cross the bench
level of 5% significant level and the result is insignificant.

From the table researcher can see that the Net Profit Margin and the Overdraft to
Loan and Advances Ratio has a positive relationship. It means that if the Investment
to Total Deposit Ratio is increased then the net profit margin will also increase. The
significant level which is 80%. So it means that it is cross the bench level of 5%
significant level and the result is insignificant.

From the table researcher can see that the Net Profit Margin and the Agricultural
Loan to Loan and Advances Ratio has a negative relationship. It means that if the

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Agricultural Loan to Loan and Advances Ratio is increased then the net profit margin
will decrease. The significant level which is 14%. So it means that it is cross the
bench level of 5% significant level and the result is insignificant.

From the table researcher can see that the Net Profit Margin and the Small Medium
Enterprise to Loan and Advances Ratio has no relationship. It means that the Small
Medium Enterprise to Loan and Advances Ratio has no effect on the net profit
margin. The significant level which is 100%. So it means that it is cross the bench
level of 5% significant level and the result is insignificant.

From the table researcher can see that the Net Profit Margin and the Unclassified
Loan to Loan and Advances Ratio has a positive relationship. It means that if the
Unclassified Loan to Loan and Advances Ratio is increased then the net profit margin
will also increase. The significant level which is 50%. So it means that it is cross the
bench level of 5% significant level and the result is insignificant.

From the table researcher can see that the Net Profit Margin and the Classified Loan
to Loan and Advances Ratio has a positive relationship. It means that if the
Investment to Total Deposit Ratio is increased then the net profit margin will also
increase. The significant level which is 89%. So it means that it is cross the bench
level of 5% significant level and the result is insignificant.

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CHAPTER 6.0: CONCLUSION

6.1 Conclusion:
Generally we see that investment reflect the net profit of the company. It is essential for
companies to declare profit as it provide certainty about the company's financial well-being
and are also attractive for investors looking to secure current income. Therefore, a investment
should be maintained to determine how profitable its invested capital will be for investors and
how stable the income which may in turn impact on investors and perceptions of the company
in the deposit mix. A good deposit mix policy decision will enable the company to create
positive image among its investors.
The paper has estimated Yearly investment for 10 out of 32 private commercial banks of
Bangladesh over the period of 2010 to 2014. The strength of the relationship between the
investment and the estimated profitability on the yearly of the different skim date is
examined. Though there is a strong positive relationship between ___ and ___ variables, __
has small negative relationship with ___ and medium positive relationship with __ and __,
and there is some negative and less significant relationship with few variables. This proves
that variables other than __ and __ are not gaining momentum in influencing profitability in
the Investment policy in the privet banks of Bangladesh. Further studies could be done to
identify these variables and to measure their effects on profitability so that the private
commercial banks in Bangladesh are able to control their deposit mix policy and thus
contribute to the building of a more efficient banking in Bangladesh, which in turn, will help
build up a growing healthy economy.

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Page 6