Determinants of Profitability in Private Commercial Banks of Pakistan (original) (raw)
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Determinants of Commercial Banks Profitability: Empirical Evidence from Pakistan
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Factors impacting profitability of commercial banks in Pakistan for the period of (2009-2012)
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A significant constituent of the micro-prudential analysis is the study of banking sector profitability. Using bank level data this paper analyzes the profitability of commercial banks in Pakistan over the period from 2006 to 2009 using an empirical framework. To account for profit perseverance, this paper has applied multivariate regression analysis by formulating two regression models. The estimation results show that Gearing ratio, NPLs ratio and asset management are found to have significant affect on the profitability of commercial banks in both models. While size of the banks is a significant indicator for profitability where return of assets is used as proxy for measuring bank's profitability and insignificant relation where return on equity is used as proxy to measure the profitability of commercial banks.
ANALYSIS OF THE DETERMINENTS OF COMMERCIAL BANKS' PROFITABILITY IN PAKISTAN
Global Journal of Management, Social Sciences and Humanities, 2020
The objective of this study is to investigate the determinants of profitability of commercial banks in Pakistan. For this purpose, we used secondary data collected from annual reports of selected banks. The period of the study was 2014-2018. In the sample of study five commercial banks were selected to determine their profitability. Different statistical techniques such as Correlation Analysis, Regression Analysis and Analysis of Variance (ANOVA) were used to draw the results. We found that net interest income and provisioning against infected advances have negative relationship with profitability while non-markup income and number of employees (human capital) have positive association with the profitability of selected commercial banks. The most influential variable in our study is human capital which increases about 40 percent profitability of selected banks.
Banks plays vital role in capitalist economy. During the period of financial turmoil, it has been viewed that banks lost a huge capital due to non-recovery of loans from customers. Since there are two type of banks working in Pakistan therefore this thesis analyze which banks performance was better during the financial crunch between 2008 and 2012. The objective of this thesis is to determine the factor affecting the profitability of Islamic and Conventional banks in Pakistan during the period 2008 – 2012. Data was collected through financial books of seventeen conventional and five Islamic banks. Two dependent variables i.e. Return on Asset and Return on Equity were used to determine the profitability of Islamic and conventional banks in Pakistan. Whereas Liquidity, Credit Risk, Capitalization, Efficiency, Bank Size, Economic Performance, Inflation and a dummy variable were used as Independent variables. Panel Data analysis is used to find out the result of secondary data. Initially the analysis was conducted on whole industry, which then applied on Islamic and Conventional banks separately.