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This study examines the correlation between industry-specific loan disbursement and profitability in the banking sector of Bangladesh, with a particular focus on the influence of targeted lending on profitability. The study examines the impact of different variables such as total assets, total revenue, non-performing loans, and sector-specific loans (agricultural, transportation, construction, textile, pharmaceuticals, and food procurement), on profit after tax (PAT) by analyzing data from 41 commercial banks between 2009 and 2022. By employing various techniques such as Pooled Ordinary Least Squares (POLS), Two-Stage Least Squares (2SLS), and the Generalized Method of Moments (GMM), we have determined that total assets have a noteworthy adverse effect on PAT in both POLS and 2SLS models. Conversely, construction loans have a positive influence on PAT in these models. The total revenue consistently has a favorable effect on the profit after tax (PAT) in all models. In the GMM model, transportation loans and textile loans have a notable adverse effect on PAT, but pharmaceutical loans have a slight favorable effect. The presence of non-performing loans, total loans, agricultural loans, and food procurement loans does not have a substantial impact on the profitability after tax (PAT) in any of the models. So overall total revenue, construction loan and pharmaceutical loan have a positive impact on PAT and total assets, transportation loan and textile loan have a negative impact on PAT. This study emphasizes the significance of strategic lending in underdeveloped industries and provides practical implications for banking professionals and regulators to identify high-risk lending sectors and devise measures to improve long-term profitability. 

This study investigates the impact of some variables such as total revenue, total assets, total liabilities, total deposits, total unclassified loans, total classified loans, standard loans, special mention account loans, sub-standard loans, doubtful loans, and bad and loss loans on profit before tax. Unbalanced Panel Data were collected from the website of 45Commercial Bank of Bangladesh from the year 2010 to 2018. Ordinary Least Square (OLS), Pooled Ordinary Least Square (POLS), Driscoll-Kraay (DK), Second Stage Least square (2SLS), Generalized Methods of Moments (GMM) methods are used in this study. This research found that total revenue had a significant positive relationship with profit before tax in all the models except DK and GMM models. Total unclassified loans had a significant positive relationship and total liabilities had a significant negative relationship with profit before tax in all the models. Special mention account loans had a significant positive relationship with profit before tax in OLS and DK models and total classified loans had a significant positive relationship with profit before tax in GMM model.