THE EFFECT OF CSR ON BANK FINANCIAL PERFORMANCE: EVIDENCE FROM BANGLADESH

Abstract

Corporate social responsibility (CSR) become a global sensation in recent years. For the developed countries CSR concept were present in their business activity but for Bangladesh the concept was new. In Bangladesh, CSR is not mandatory for business but companies get different benefit from government by doing CSR activities. For banks, central bank issued guideline for CSR activities. The main objective of this report is to analysis relationship between CSR and bank profitability. To achieve the objective, at first this report explores concept of CSR, its history, why business involve in CSR and how it can be measure to compare it with profitability. After collecting all necessary information, all data were analyzed and from those analysis, it is documented that debt equity ratio has significant negative effect on ROA where growth has significant reverse relation. Another analysis shows that % of classified loans, loan to provision and growth have significant negative influence on firm performance in terms of Tobin's Q. However, there is no significant influence of CSR disclosure index and CSR expenditure index on ROA and Tobin's Q.