Analysis of Some Inner Factors Affecting the Lending Rate and Commercial Bank Behavior (original) (raw)
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This study is focused on investigating the collision of leverage and liquidity on banks’ profitability of the conventional banking sector of Pakistan. The major indicators of the financial performance of corporate entities are liquidity, leverage and profitability. Two independent variables i.e. leverage and liquidity were taken into consideration to find out the impact on dependent variable, i.e. bank’s profitability. The sample chosen for this certain study is the three famous Pakistani conventional banks. The 10 years data was collected from the “Annual Reports and Accounts†of the 3 banks, i.e. Faysal Bank, Alfalah and MCB. Regression, correlation and tstatistics are used for the examination of hypothesis. The research results states that liquidity is insignificantly positively related with profitability and leverage is significantly negatively correlated with profitability. Focusing on liquidity and profitability will help banks to enhance their growth.
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The impact of credit risk (CR) on bank-specific factors (BSF’s) and banks in the event of conventional and Islamic banks of Pakistan is an essential motivation behind this learning. These banks are chosen by their value commitment. The financial explanation investigation of chosen Islamic and conventional banks is contemplated from 2007 to 2017. Relapse examination of non-performing loan (NPL) proportion and Z-Score is utilized to discover the connections of BSF’s on chosen banks. The Islamic banking system consists of (return on equity (ROE), ROA, liquidity, spread and bank size) having a significant relationship toward credit risk. Therefore, the impact of the Z-score is less for Islamic banks relatively compared to conventional banks. The increased risk of bank debt reflects a strong NPL. In this examination bank, certain factors, for instance, efficiency, return on assets (ROA) and bank dimension, have a significant liaison through credit card risk in the conventional selected b...