CSR Expenditure and Bank's Financial Performance: A Comparative Study on Islamic Banks of Bangladesh

The aim of this study is to examine the relationship between corporate social responsibility (CSR) expenditure and Islamic banks’ financial performance in Bangladesh and also try to find out have any significant difference among the Islamic banks regarding CSR expenditure and financial performance. The return on equity, investment, deposit, ROI, ROA, Net profit, EPS and P/E ratios are selected as bank’s financial performance variables for this study. The data of CSR expenditure and the performance variables are collected from randomly selected six Islamic banks for the period 2010-2014. Apply the ANOVA for testing the significant difference and stability of CSR expenditure and financial performance variables. The Pearson correlation analysis is also applied to examine the significance relationship between CSR expenditure and the bank’s financial performance. The results show that there is a significant positive impact of CSR expenditure on Islamic banks’ deposit and investment. Other six variables: ROE, ROA, ROI, net profit EPS and P/E ratio are not significantly correlated with CSR expenditure. We conclude that two of the six banks proportion of CSR expenses to net income is moderate level while other four banks proportion of CSR are performing very poorly.